The animation and visual effects artists who helped made Hollywood what it is may need to move to Ch...

1. Hollywood visual effects producers fight their industry's
migration to China
The animation and visual effects artists who helped made Hollywood what it is may need to move to
China if they want to keep working. (AP)
From left, Guillaume Rocheron, Bill Westenhofer, Erik-Jan De Boer and Donald R. Elliott with their
Oscar for visual effects for "Life of Pi." (Reuters)

2. LOS ANGELES - Your Hollywood blockbuster 3D movies may all soon come with a "Made in China"
sticker, as more and more major studios take their animation and visual effects (VFX) business - and
the jobs associated with them - abroad.
"I'm not sure what I'm going to do in a few years, I've started exploring other career options," one
well-placed, senior animation professional at a major studio told FOX411's Pop Tarts column. "The
industry might all be moving to China, but I won't be."
VFX company Rhythm & Hues - which won the Oscar for Visual Effects on Sunday night for its work
on Ang Lee's "Life of Pi" - just filed for Chapter 11 bankruptcy protection after laying off more than
250 employees. Universal Pictures and 20th Century Fox have since agreed to lend the company up
to $17 million so it can complete its work on the big-budget "R.I.P.D." and "Percy Jackson: Sea of
Monsters."
The Rhythm and Hues team tried to draw attention to their plight during their acceptance speech,
but were cut off by the Academy's trademark "Jaws" music designed to usher recipients off the
stage.
"At a time when visual effects movies are dominating the box office, [the] visual effects companies
are struggling," Rhythm and Hues Oscar winner Bill Westenhofer explained, uninterrupted,
backstage. "We're artists, and if we don't find a way to fix the business model, we start to lose the
artistry."
Indeed the industry's professionals are not going
down without a fight. Before the Oscars started,
hundreds rallied outside the Dolby Theater
demanding better treatment for VFX artists. They
even chartered a plane to fly overhead trailing the
protest slogan "Box Office + Bankrupt = Visual
Effects vfxunion.com" over the red carpet.
In addition, a number of anonymous professionals
in the animation/visual effects arena recently
launched an IndieGoGo campaign to end overseas
subsidies in their industry, encouraging
anonymous donors to help them obtain legal counsel to stop subsidies that may violate international
trade agreements.
"Big Hollywood studios receive huge amounts of taxpayer dollars for sending visual effects work
away. It's time to put a stop to it," reads the campaign introduction. "While the U.S. studios are
making billions on these films and there is a huge boom in VFX, you'd be surprised to learn that
many VFX facilities lose money and many talented VFX professionals constantly lose their jobs as
they globe-trot around the world chasing the next project to work on. The reason for much of this is
that subsidies are being offered to U.S. studios by various international and state and local
governments."
The campaign also claims this has led to some studios requiring VFX facilities to open satellite
studios in subsidized regions and moving the work there, igniting massive costs and huge debt for
facility owners.

3. "Many have not been able to make the jump and have gone out of business," continued the
campaign. "Many professionals who are unable to move are laid off, leading to bankruptcy and often
foreclosure if they own a home."
Eric Roth, Executive Director of the Visual Effects Society, echoed the dismay many in the industry
are experiencing.
"Many visual effects artists are worried about losing their jobs, or trying to figure out which country
they'll need to live in to have a job," he told FOX411's Pop Tarts column. "The issue of globalization,
worldwide tax incentives and hard financial reality truly rules the day as to who gets work and
where it will go. Even if you try to stay ahead of the curve there is no way to guarantee a sufficient
cash flow during the (in-between movies) time."
The week before Rhythm & Hues' bankruptcy filing, it was also reported that DreamWorks
Animation would be letting go of at least a few hundred of its employees due to holiday season
losses. Meanwhile, the Jeffrey Katzenberg-headed company is in-production with China for the 2016
release "Kung Fu Panda 3."
Given that production/labor costs are far cheaper in China, we're told studios will likely send their
senior level supervisors and top talent overseas to head production and train Chinese workers.
"Currently China is not capable of producing the level of quality that we are accustomed to when we
visit the theaters, but this can easily change with time as Chinese artists will be changed by the best
of the best. They'll be able to do the same level of work at a much more cost-effective price,"
explained our insider. "The relationship between studios and China will only strengthen in time. As
trust builds and the business model proves itself, it will only further encourage studios to do more
business there."
But David Williams, the President and CEO of FilmCrest a film finance and marketing company
noted that taking production to China is merely "the easy route" to follow where the money can be
saved and made.
"The by-product is that it will build a bigger and stronger infrastructure in China. This does not help
Hollywood. We've already lost 71 percent of California's film industry to runaway production," he
explained.
Williams also said the VFX migration to China may be short-lived.
"The continuation of low payment for labor and on production will eventually create a pool of factory
workers, without innovation and the creativity that a very spoiled worldwide media audience will
demand," he said. "I believe there will be an evolution over time, where the quality and pricing in
Hollywood will revive itself and exceed anything that can be produced in China for a similar price."

4. So if American animators want to keep the work within our borders, they must consistently produce
a much more creative and technologically superior product.
"The U.S. must not only produce higher quality product but bring it in at a more competitive price or
they will face extinction through competition," Williams added. "We have to remember, China's
current main resources are manpower and capital. The U.S. still dominates the world in a more
valuable resource, the technological and sheer imagination of filmmaking, something we cannot
afford to lose."
Robert Cain, a leading producer who has been connecting Chinese and American productions for
several years, concurred.
"Chinese animation companies have had some success -- but not a lot -- in their home country. They
have so far failed to make a single animated film that has succeeded outside of China," he said.
"Whether that work comes back to the U.S. will depend entirely on the value that U.S. animators
provide."