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Race to the bottom and other misconceptions

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  • #16
    Re: Race to the bottom and other misconceptions

    'Race to bottom' is a fairly well known term. It usually refers to markets or industry where there is oversupply that is competing entirely on price. When that happens there will always somebody to do it for less than the next guy to win the business, and prices decline slowly, sometimes approaching zero, unlimited, or free. Sometimes it's an oversupply in people competing as in coding, sometimes technology improvements have lowered the cost, such as unlimited calling in the telecom sector.

    In Retail specifically, but most other businesses you can compete along three dimensions: price, selection (or offering), and customer service. The magic of online retail is that they can always win on price and selection due to their business model, so physical retail has to focus on customer service to survive. Many don't.

    In the fashion industry we have moved everything to Asia to the point where there were no spinners left in the US, and other parts of the industry became next to non-extinct. All on price. Slowly people are learning that the lot sizes, the turn-around, and the overhead in communication, lack of contextual knowledge has a real price that is a counterpoint, and some of it is moving back onshore. The same is true in the IT industry.

    There will be some retouching jobs where not much skill is required, close coordination isn't as critical, and price matters. They will be served out of Asia. But there are many retouching jobs that require a higher touch, better collaboration, someone who understands the market and can be a partner not just a body. And those don't compete on price, they compete on offering and service.

    The key is understanding which clients are which, to fine tune your service and your marketing to target those clients.

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    • #17
      Re: Race to the bottom and other misconceptions

      Originally posted by jklier View Post
      There will be some retouching jobs where not much skill is required, close coordination isn't as critical, and price matters. They will be served out of Asia. But there are many retouching jobs that require a higher touch, better collaboration, someone who understands the market and can be a partner not just a body. And those don't compete on price, they compete on offering and service.

      The key is understanding which clients are which, to fine tune your service and your marketing to target those clients.
      Exactly! It's a kind of service that it's more likely that the whole companies with the entire staff will move rather then things being outsourced. Some staff moving to open a new field office etc simply because production is there is not uncommon.

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      • #18
        Re: Race to the bottom and other misconceptions

        Originally posted by Flashtones View Post
        In 2013, Rhythm & Hues Studios won the Academy Award in visual effects for “Life of Pi”... eleven days after declaring bankruptcy:

        https://www.youtube.com/watch?v=9lcB9u-9mVE

        Could be parallels.
        That's not really a simple problem, but most VFX shops produce material for other companies, yet have to absorb the cost of continued research apart from artist salaries. I would never want to work in that industry.

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        • #19
          Re: Race to the bottom and other misconceptions

          I've been looking around at sallaries at these places, and 100K is minimum. Poor them, I feel so sorry for them, working at a job you love for only 100K.

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          • #20
            Re: Race to the bottom and other misconceptions

            Originally posted by skoobey View Post
            I've been looking around at sallaries at these places, and 100K is minimum. Poor them, I feel so sorry for them, working at a job you love for only 100K.
            You saw supposed salary data, and you didn't mention the source. Apart from that high salaries would support my point more than your own. I referred to the issue of balancing cash flow with things such as R&D costs.

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            • #21
              Re: Race to the bottom and other misconceptions

              Different employment agencies, add sites and direct company adds. I'm just saying that business model may be flawed because the team is getting paid, but investors aren't. It's not like everyone is just working for free.

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              • #22
                Re: Race to the bottom and other misconceptions

                Even artists should work in a businesslike way. R&H's income didn't match their expenditure and the inevitable happened, which is not surprising, given the flaky open ended contracts they signed up to. With the amount of freelancers and short term contract workers working in the industry the VFX community will find it tough to force change in working practices.

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                • #23
                  Re: Race to the bottom and other misconceptions

                  Bubble has to burst before things start improving. And if things really are as bad as they say, this is going to be soon. I guess either studios will hire artists themselves in the end.

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                  • #24
                    Re: Race to the bottom and other misconceptions

                    Originally posted by skoobey View Post
                    I guess either studios will hire artists themselves in the end.
                    That makes no sense. Things are brought in house when they become less complex to the point where doing so requires minimal risk. VFX has gone the opposite direction with enormous R&D costs and an increasing number of hours in render time. The studio is in fact mitigating their own risks. The long term survival of specific VFX shops is at best a tertiary concern for a given studio. I'm also not so sure about a bubble there. Salaries may vary, but if they're over the 6 figure mark, they're either amazing artists/engineers or it's a combination of strong ones + crazy hours.

                    You might also look into the cost of living in some of the bigger cities here. A small 1br flat will run you $1400 in the LA area or over $2k in a lot of the regions surrounding SF.

                    Edit : Edit: It may not be perfect, but Glassdoor is typically a more accurate source.

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                    • #25
                      Re: Race to the bottom and other misconceptions

                      Bubble being that so many companies fail at their business model that studios would have no choice but to organize artists themselves or invest into motion graphics studios.

                      Obviously there are A LOT of entry level positions, I wasn't looking at those. I think you're talking about way down the food chain. I doubt that a great visual artist would work for minimum wage at motion graphics house, when top add agencies pay 250K for someone like that.

                      I don't know I tend not to bitch as much as most people, so maybe my standards are off. 10-12 hour days one weekend in a couple of months is fine by me. Most people expect 8 hour days, weekends off and a month or more off for vacations, well I'm sorry, but then they have no right to complain.
                      Last edited by skoobey; 04-27-2015, 01:20 AM.

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                      • #26
                        Re: Race to the bottom and other misconceptions

                        Originally posted by skoobey View Post
                        Bubble being that so many companies fail at their business model that studios would have no choice but to organize artists themselves or invest into motion graphics studios.

                        Obviously there are A LOT of entry level positions, I wasn't looking at those. I think you're talking about way down the food chain. I doubt that a great visual artist would work for minimum wage at motion graphics house, when top add agencies pay 250K for someone like that.
                        What gives you the impression that artists clear that amount? Your numbers are drastically inflated.

                        Originally posted by skoobey View Post
                        I don't know I tend not to bitch as much as most people, so maybe my standards are off. 10-12 hour days one weekend in a couple of months is fine by me. Most people expect 8 hour days, weekends off and a month or more off for vacations, well I'm sorry, but then they have no right to complain.
                        Some of the other creative fields have terrible working hours, at least according to people that have worked in them. A couple software engineers I knew that worked at (the same) video game studio mentioned the amount of times they slept at the office.

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                        • #27
                          Re: Race to the bottom and other misconceptions

                          Ok, so then I must be the luckiest guy in the world. I can't go into these discussions, there are so many levels, and I always wanted to climb as much as I could, obviously we are talking about different things. I am an artist, I work, there are people that work for me that earn much less then I do, but then they do really easy tasks and have a lot of free time.

                          My day:
                          Get up, check all the messengers and respond to the clients, then contact all the assistants.
                          Eat, exercise, take a shower, that kind of thing.
                          Work.
                          Lunch.
                          Work.
                          Again, daily chores.
                          Bed.

                          They had to sleep in their office? Boohoo, poor them, I feel so sorry for them. I sleep in my office every day.
                          Last edited by skoobey; 04-27-2015, 02:36 AM.

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                          • #28
                            Re: Race to the bottom and other misconceptions

                            Originally posted by skoobey View Post

                            They had to sleep in their office? Boohoo, poor them, I feel so sorry for them. I sleep in my office every day.
                            I've done the same thing, but I don't see why you're emotionally attached to this to the point where you feel compelled to misrepresent several things so far. Your rates are off, and I would remind you that we were initially talking about the closure of a business not owned by any of those artists. The shop couldn't pay their bills, because they absorb a lot of the risk from the studios. It's a rather poor business model, but some of your followup statements (bringing things in house) were irrational there. That doesn't typically happen, because the business model is terrible.

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                            • #29
                              Re: Race to the bottom and other misconceptions

                              Because I'm tired of telling people over and over again. If you want to be really good, you need to practice practice practice and that mens hours. Only reason I've gotten so much better is because I practice like a mad person.

                              Their business model no longer works, time to find new one, but I highly doubt people are never getting paid, no ow would work if that were the case.

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