Motion Design Business Practices

Motion design is a very rapidly growing creative field. Motion components—both high-end and low-end—are being integrated into online projects, television programs and commercials, feature films, games, applications and content for mobile phones and tablets, as well as three-dimensional installations and kinetic displays in public places.

This diversity of projects has led to confusion about and inconsistency within motion design business practices and contract terms. To add to the confusion, the work is being done by people who come from very different professional backgrounds, bringing with them different industry expectations.

Film and television industry

For years, it was the norm in film studios and television networks for motion design to be created by staff members. Employees were trained to use specialized equipment (for example, the Quantel Paintbox in the 1980s), and many of them were members of entertainment unions. These unions negotiate and enforce collective bargaining agreements that govern the hours, working conditions, minimum wages and benefits for members employed at companies that have accepted the agreements (usually referred to as “signatories”). Because motion design has not had its own union, practitioners have often been members of related organizations such as IATSE Local 839 (The Animation Guild) or IATSE Local 16 (which represents a variety of stagehands and technicians, including many who create computer graphics). However, a labor organizing effort is currently underway by IATSE with the objective of forming a new union specifically for motion design and visual effects (VFX).

On film and television projects, a clear distinction is usually made between the production and post-production phases. The production phase includes preparation of all live action footage, whether it’s shot on location or in a studio. Action that will later be combined (composited) with motion design is usually shot in front of a green screen. The post-production phase includes all editing and the addition of computer-generated graphics, animations and VFX. Post-production also includes preparation of the soundtrack and the addition of title sequences and end credits.

In the past, it was typical for major studios to do much of their own post-production. In recent years, however, most post-production work has shifted from in-house staff members to outside specialists. There is now an ecosystem of specialized post-production companies providing various services to the film and television industry, and it must be noted that some of the smaller companies involved in motion design blur the line between production and post-production. Creative boutiques often say that they can shoot and edit, as well as design.

Advertising and games

The skills required for making feature films and television programs are directly applicable to the making of television commercials. The traditional approach in the advertising industry has been for agency staff to develop concepts for campaigns, and then buy production and post-production from the outside. More recently, though, as the overall creative process has become primarily digital, the trend is to do more of the work in-house. For strategic reasons, digital services are becoming more fully integrated into the agency itself—exactly the opposite of the predominant trend in film and television.

Lastly, motion design skills are also in great demand in the game industry. Most game development studios and publishing companies divide their workload between employees and a network of outside talent. Projects include major releases for consoles as well as the rapidly expanding category of casual games for smart phones.

Common ground

With so many people doing so many different things, we have to ask ourselves what, if anything do all of them have in common? For the most part, this boils down to two important things. First, motion designers rely on a shared set of digital tools. Although there are still some higher-end systems—such as Autodesk’s Flame, for compositing—technical advancements over the last twenty years have brought many motion design capabilities to the desktop. The current tool set includes applications like Adobe’s Flash and After Effects, as well as Apple’s Motion and Final Cut Pro. The steadily decreasing cost of equipment and software has made motion design affordable enough for more people to incorporate it into more projects.

Second, motion designers have in common the important legal issue of “work made for hire,” sometimes shortened to “work for hire”. This phrase comes from U.S. copyright law. In most instances, “work made for hire” refers to original work made by an employee within the scope of his or her job, in which copyright ownership automatically belongs to the employer. However, it can also refer to original work made by an independent contractor or an outside firm, in which copyright ownership might automatically belong to the client. This is only true if the work meets very specific criteria: it must be specially ordered or commissioned; it must fit within certain categories of work (motion design fits into a category which covers work that is “part of a motion picture or other audiovisual work”); and a written agreement to that effect must be signed by both parties. We’ll talk more about written agreements in just a moment.

Key differences

On the flip side, there are important things that all motion designers do not have in common. Sometimes work is provided directly to the end client, while other times it’s done behind the scenes on a subcontract basis. Secondly, many motion designers bring with them general business practices and expectations from the entertainment industry, while others follow business practices from the design community. Let’s take a moment to look at each of these essential differences more closely.

Subcontractors

If you’re doing motion design as a subcontractor, it means that you’re not selling your work directly to the end client. You’ve been brought in behind the scenes to help someone else—for example, a post-production company—with their project. In the entertainment world, the chain of relationships looks like this: The actual client is usually a film or television studio, or perhaps an independent production company. They own the project, and they will receive gross percentages of all revenue that it eventually generates. This client buys specific services from post-production companies, such as VFX houses, usually on the basis of a fixed-fee contract. Many post-production companies then farm out portions of the project to independent contractors. These subcontractors are paid an hourly rate or a daily rate. Typically, subcontracted work goes to individuals, but it can also be done by small firms. In either case, holding the last position in this chain of relationships does not give the subcontractor much clout or bargaining power.

When subcontractors are self-employed individuals, it’s important for them to protect their legal status as independent contractors. In the U.S., there are many differences at both the federal and state levels between employees who are on the payroll and outside contractors who are not. To clarify the situation and prevent confusion, an independent contractor agreement should always be negotiated and signed. This document is usually provided by the company buying the services. It specifies the hourly rate or daily rate to be paid, and it indicates that all services provided will be considered work for hire under U.S. copyright law. The agreement is accompanied by a statement of work (usually abbreviated as “SOW”)—an addendum that contains detailed specifications for the project. As a reference, a sample independent contractor agreement is included in my book Talent Is Not Enough: Business Secrets For Designers. Another sample can be found in the book Consultant and Independent Contractor Agreements, by attorney Stephen Fishman.

At the beginning of a relationship between a post-production company and a self-employed individual, it’s a good idea to establish some ground rules for how the subcontractor’s time will be reserved. Involved parties should clarify the difference between tentative holds and confirmed bookings, as well as expectations regarding payment for on-call time and any penalties for cancellation of bookings (usually referred to as “kill fees”). An open forum for discussion of such issues can be found at www.motiondesignpractices.org.

Beyond these questions related to scheduling, most self-employed individuals also need guidance on a wide range of general business issues, from marketing through to billing and collecting. This is especially true for young designers who enter the field with very limited business experience. There are two especially useful resources  for young professionals. The first is a paperback available in most bookstores, the Graphic Artists Guild Handbook: Pricing & Ethical Guidelines. The second is the AIGA Center for Practice Management on AIGA.org, which includes many pertinent business articles for independent contractors, such as “Freelancing for Design Firms and Agencies” and “Income Taxes for Freelancers.”

Direct to client

The opposite of subcontracting is to sell your services directly to the end client. Sometimes this is done by individuals, but in the field of motion design it’s more often done by firms that are mid-sized or larger. In general, firms have a broader scale of operations, offer a more comprehensive set of services to clients and have more clout when it comes to bargaining. When invited to bid on a project, a firm is often in a position to submit its own contract in the form of a fixed-fee proposal with attached terms and conditions.

These contract terms and conditions can vary quite a bit, based on the background of the firm submitting the proposal. Different industries have different standard practices. The legal expression for this is “usage of trade”: common business understandings and practices that are well established and regularly observed within a particular category of companies. They are usually written into the contract itself, but even if they are not, they may still be legally enforceable. In the case of motion design, the contrasting sets of practices seen most often are those from the worlds of entertainment and design.

Entertainment contracts

Work on film and television projects tends to be organized into the standard production/post-production pipeline, which is to say that the work tends to be sequential and compartmentalized. Companies providing post-production services such as motion design and VFX usually negotiate their portion of the project on the basis of a fixed-fee contract plus a short list of extra items that will be billed separately if the client later decides to include them, such as extra seconds added to the duration of a shot. All services are provided on a work-for-hire basis. The standard legal language used in these contracts addresses issues related to the use of union labor and the obligations of signatories. For example, there are union requirements and restrictions for the content of title sequences and end credits.

A useful reference for entertainment contract language is available to members of the Association of Independent Commercial Producers (AICP). As the name of the organization indicates, most AICP members are involved, to some extent, in making commercials for ad agencies. They work in both the live and digital production environments, and the board of directors includes professionals from leading companies such as Digital Domain and Brand New School. The “Doing Business” section of AICP’s website has a variety of reference documents available to members, including a standard commercial production agreement, a digital commercial production contract and new media licensing agreements.

Design contracts

A different set of business expectations can be found in graphic and interactive design firms. In general, design firms are accustomed to a more exploratory and iterative process, and prefer to be involved right from the inception of a project. That is to say that design firms tend to take an approach that is more holistic, where the workflow is usually not organized into a tight production/post-production pipeline.

Many of today’s top motion designers began their careers in print, and then gradually shifted from static to kinetic projects. This involved mastering the essential film skills of movement, sequence and narrative, as well as becoming power users of editing software.

In the design community, most contracts are also in the form of fixed-fee proposals. However, if a client later makes substantial changes, those modifications are documented with one or more change orders. A sample set of terms and conditions for design proposals is available here: http://www.aiga.org/standard-agreement/. This document, the AIGA Standard Form of Agreement for Design Services, reflects current usage of trade within the design profession. It has a modular structure. The first two modules, “General Terms and Conditions” and “Schedule A: Intellectual Property Provisions,” are intended for use on all projects. The three additional modules are provided as supplements to be added to the agreement only as needed for print projects, interactive assignments or environmental/3D projects.

This AIGA system is now being updated to accommodate motion design. The existing intellectual property provisions are being expanded to include a work-for-hire option. Previously, the underlying expectation was that projects would not be work for hire. Going forward, that will still be the case for projects unrelated to motion design. For most traditional deliverables, it will remain standard practice for the creative company to be recognized as the copyright holder. Necessary rights are then licensed or assigned (transferred) to the client when full payment for the project has been received.

Lastly, a brand new supplement is being created with some additional provisions that are specific to motion design deliverables, such as a warranty of compliance with the client’s technical requirements and applicable industry standards. This new supplement has two important underlying assumptions: that most AIGA members are not in a union; and they are not involved in projects that require live action or shooting on location.

Sorting it out

If you’re a motion designer negotiating a project, which business practices should you follow? The variety of players and business relationships in the field today means that there is currently no single approach that will match all situations. The above diagram will help you sort out the differences we’ve been discussing and find the contract terms most appropriate to your own particular circumstances.

Keep in mind this is only a snapshot at this point in time, when the field of motion design is still quite fragmented. A certain amount of confusion and inconsistency is unavoidable in the near term. In the long run, however, motion design will continue to mature as a professional service and that evolution will involve the development of shared business practices.