Where is this business heading for western areas?

[Jon Berntsen]

Lately I have felt that we need to lower our prices so much that it is no longer possible to make good images with a story. And not even finishing the last 20% that really makes the image good. So the products that we are forced to deliver is far away from what we can do. Everything needs to be stock and if only one thing is not going as planned, the time spent gets more than what the client has agreed to pay for. That happens all the time. The competiton from china is no longer a threat, but east european people is charging one fifth of what we do, and they probably have tree times as much hours to put into it. We are not even the most expensive ones in our country. We already have to finish up a single house illustration from A to Z on under 1,5 day, in direct competition from high class imagery from ukraine. I drive home from work every day now with a bad feeling. I am sure this can't hold much longer.

 

What do you american and western european people do to counteract this? I am sure you must be facing the same issues? I would like to double the times spent, from 1,3 days to 3. But I am not sure if a doubling in price would be accepted by any client as long as they can get it almost for free from elsewhere. These people are in desperate situations and sending out offers to litterally anyone these days, so don't think your customers arent thinking about this.

 

I read somewhere that creative positions are least prone to automation. But I am not sure...

Edited September 19, 2015 by chroma

[MarcellusW]

I am curious, how are Eastern Europeans able to charge 1/5 of what you do for the same quality? Is their cost of living truly that much less or are their labor laws different that let them underpay their employees?

[Jon Berntsen]

I am curious, how are Eastern Europeans able to charge 1/5 of what you do for the same quality? Is their cost of living truly that much less or are their labor laws different that let them underpay their employees?

 

Yes, cost of living. Or maybe overall wage rules are non-existing. Dunno. A median monthly wage is around what we, americans and western/northern europeans earn in 2 working days. So of course it is a problem when we are competing with these different terms. Luckily, our economy is worsening these days, maybe we will one day be able to cut our price by 80%...

 

So really, how long time are you calculating, say for a hi end exterior of one house daytime? and what if you took a night shot? I am really curious because if you do spend three days on it, I must be really fast working.

Edited September 19, 2015 by chroma

[Nicolai Bongard]

When you say "I have felt that we need to lower our prices", do you mean that is just a feeling youve had that your prices are too high or have you actually lost work to someplace else because of your pricing? When the differences are as vast as they are, you cannot compete against the eastern european/asian prices. What you can offer that they cannot is that you are local (to norway im guessing) and thus there will be minimal communication errors. So your client can get what he wants with minimal fuss and revisions. You also have a firm set up that has everything in order (not stolen software etc). You will also be more up to speed regarding the local "look" and what is expected of you. It is my experience that if a client goes elsewhere "because it is so cheap", he later returns when he has another project because it turns out it wasnt so cheap after all, and nothing went smoothly. So to conclude if you have a client telling you he wants to go somewhere else because it is so cheap, remind him of the communication part.

[munlyleong]

yeah exactly. I feel like the thread I just made will give you some insight. http://forums.cgarchitect.com/79223-race-bottom-regardless-country-does-no-one-any-good-former-bizdev.html

 

Those Eastern Euros might end up killing things for everyone and after my experience there with this industry, I feel like there will be a wealth transfer from first to third world as cost of time becomes the biggest factor in evening the odds (and finding a new median) now that internet basically evens the playing field in terms of communications and knowledge. First world countries are now the ones at the disadvantage.

[Jon Berntsen]

yeah exactly. I feel like the thread I just made will give you some insight. http://forums.cgarchitect.com/79223-race-bottom-regardless-country-does-no-one-any-good-former-bizdev.html

 

Those Eastern Euros might end up killing things for everyone and after my experience there with this industry, I feel like there will be a wealth transfer from first to third world as cost of time becomes the biggest factor in evening the odds (and finding a new median) now that internet basically evens the playing field in terms of communications and knowledge. First world countries are now the ones at the disadvantage.

 

Got an email from these guys today. They inform that the average price for an image is €200. http://sun-world.wix.com/sun-world

Who in here doesnt have customers who wouldnt think this quality is sufficient? Just another sign that it would be smart to have other job options at hand...

[Scott Schroeder]

You are missing one thing, quality is only 1/2 the battle. It's a massive pain in the arse to work with those el-cheapo companies. First off, you deal with people who can barely grasp the concept of design, so you won't get a very good image back unless you spoon feed them 1000% of everything you want them to do. Secondly, you have language barriers (just read their descriptions on their "website") so working with them in asking for changes is a complete waste of time as the guy you deal with probably isn't translating your directions very well to the team (example; move vase with great haste very well left of center top down purple monkey dishwasher). Then you have time differences. Then you have guys that leave the company every other week since they are paid crap wages, so you are constantly dealing with new staff. Then you deal with the fact that they pirate everything so they are on old software. So yeah, save a few hundred bucks on a render only to spend thousands more in headaches and delays. Seems like a good business decision to me.

 

Let your client deal with one of these 2 cent render sweatbox studios, just once. They'll come back to you in a heartbeat because you can offer them so much better service. If they don't come back? Screw 'em in the ear, then screw 'em in the other ear. They weren't the client to be keeping around in the first place. (I just realized how this sounds like relationship advice)

 

It's the internet. I can show you all the awesome images in the world. Is that what you actually get? Probably not. I mean, for Christ sakes, they can't even afford to pay for a Pro Wix account! The only thing worse is if they were on Weebly.

 

I grow tired of these topics. Can't we just sit around and speculate when Autodesk is going to kill Max in favor of Maya? Those are less depressing. The Western sky is not falling what so ever. Now just stay calm, and render on.

[lasse1309]

i feel your pain, but:

 

In EVERY industry prices drop when the pioneers are caught up by the crowd.

the task then: pioneer on or die.

This is what drives innovation and is the core of our system.

 

so stop complaining and hit the render button either faster or better.

 

jokes aside: as Scott says correctly quality of output is only one thing - and has not much to do with quality of process, taste etc.

But in the end it boils down to the thing that if you can't sell your product you would have to change it.

 

all the best

Lasse

[RyderSK]

"Eastern" european reporting in :- ) [well geographically middle, but who will I fool, mentally it's right there]

 

I find no issue charging 10-15 times the amount per image as mentioned in post above. Actually the only few times I lost bid ( not counting those who won't even reply again] it was surprisingly to UK companies.

 

It's global market, yet, most people hardly work internationally, so most of the cheap competition wage wars, still happen within country. I would have no issue finding you 20 companies who charge 200 euro both in Norway and in London. I would just write to bunch of people I see on networks.

 

So what good is this endless blame placing on outsiders ? If you live in one of the strongest economies in world, everyone will charge less than you, it's quite simple nature of market. Doesn't mean you have to compromise, I don't see Swiss people charging less for their watches and bank service.

 

If I wanted to be stereotyping as well, I would add little bit to what Scott said. The value in cheap work simply isn't there. Good CGI hardly suffices for those who are actually willing to pay. Those require service. And that service isn't done by guys who barely speak English with design understanding of 5 minute google search.

 

Those Eastern Euros might end up killing things for everyone and after my experience there with this industry, I feel like there will be a wealth transfer from first to third world

 

After you're done with your continuing hysteria (you're 20 years late on this), I suggest learning the difference between economic terms "developed" vs "developing" economies before using the term"1st/3rd" world countries. You will appear less ignorant ;- )

[Scott Schroeder]

The Eastern Europeans are coming right at us!

 

Price competition is everywhere and it is in no way just related to our industry. If you are in fear of the pennies on the rendering competition, act on it. Stand up and try to force some change. One of the big reasons why it's becoming an issue for some of us is because we are allowing it to happen.

 

A really good article by Noah Bradley.

https://medium.com/@noahbradley/minimum-wage-artists-4f8e00024a4

 

We fear to lose the jobs that don’t even pay us enough to live.

[Jonathan Fantucchio]

yeah exactly. I feel like the thread I just made will give you some insight. http://forums.cgarchitect.com/79223-race-bottom-regardless-country-does-no-one-any-good-former-bizdev.html

 

Those Eastern Euros might end up killing things for everyone and after my experience there with this industry, I feel like there will be a wealth transfer from first to third world as cost of time becomes the biggest factor in evening the odds (and finding a new median) now that internet basically evens the playing field in terms of communications and knowledge. First world countries are now the ones at the disadvantage.

 

Munly, I read your thread. I'm a Biz Dev Professional and I am very curious. Are you located in the States and if so what state, and did you conduct in person meetings or phone calls? I'm curious as I often wondered if my sales experience and success can be applied to rendering.

 

Also I don't comment much but I hope I can add to the discussion as it is somewhat of a common topic here.

 

All anecdotal. I'm in NYC and my last recent job was working in house at a small visualisation firm. I remember when I was hired my boss said to me "Rendering is still a good business". This is coming from a dude who has been doing this since the 70's by hand and has seen a lot of ups and downs. When he said that, I thought he was crazy, especially after reading these boards. After working for him I quickly saw the light. We would get calls everyday for new jobs and had tons of jobs well under way. Once every two weeks we would get some shady developer or enigmatic middle eastern dude who would come to the office and would need a crazy animation project that my boss would have to turn down. I would always ask him why and he would just dismiss it.

 

My last job was for a model apt in Harlem. I went to the site, took photos, modeled and rendered previews and after a week or so the developer bailed on us without paying. My boss didn't even care as he had too many other projects going on. It was just a throwaway job for him and the client was a sketchy cheapo that he had no time for.

 

When I got a hold of the pricing for jobs I was floored at what he was charging. It was way higher than what is being discussed here. And that's in one of the most competitive markets out there. The work we did was competent, some of it borderlining on great, albeit a bit old fashion. The key was the excellent service they would receive.

 

If you're not elite like Juraj, rendering is basically a who you know reputation business. All of my old bosses clients were referrals who knew he could deliver quality work on time! He just kept building off it.

 

Also revisions are king, so if a company is charging sub $300 a render they're shooting themselves in the foot, as many revisions are usually needed on a single image if they ever hope to get repeat business. And usually you will have redlines right up to the end, but we all know this.

 

For Interiors I get hand delivered a huge amount of samples that I have to scan manually as they are almost always very unique and not sourceable on the web. Most of those textures on the web are useless for me. I get these delivered sometimes the day before final renders. Sometimes, one single material and how it looks will hold up an entire image and require many revisions. Let's not even talk about the furniture that some of these interior folks pick out that you cannot find on the web and have to model from scratch. If there is someone who can deal with that for $200 an image I say let em do it, cause I surely won't.

 

So if someone from another country is charging $200 per render and a Developer or Architect decides to use them, I say good luck to both parties and hope they enjoy the S**t Show that will surely follow. And if they are "destroying the industry" then the "industry" was dead to begin with Nothing will save it and it will be dead for everyone except the Architects who will eventually be taking control of renderings back in house.

 

The actual industry of rendering I think should be very small as it is within the realm of the Architect or designer to do renderings, and once the technology catches up rendering will be back in the hands of the architect or designer as it should be. I'm saying this with the knowledge that Architects and developers are not the only people who need renderings. The industry needs to correct itself as it is just too saturated. I sometimes think the first step in this correction is to make this not an industry if that makes any sense at all.

 

Anyways I forgot the point I was trying to make so I'll drink another beer and hope it comes back to me.

[munlyleong]

Basically more people need to be acting like Scott and less like the $200 monkeys but it does seem to be like 10 of them for every Scott and the developers know this. That's the point I was making.

 

After you're done with your continuing hysteria (you're 20 years late on this), I suggest learning the difference between economic terms "developed" vs "developing" economies before using the term"1st/3rd" world countries. You will appear less ignorant ;- )

 

I think your'e the one sounding ignorant. That's exactly what I described, wealth transfer from 1st to 3rd with 3rd moving up to 2nd and hopefully 1st world status is the very definition of "developing".

 

Munly, I read your thread. I'm a Biz Dev Professional and I am very curious. Are you located in the States and if so what state, and did you conduct in person meetings or phone calls? I'm curious as I often wondered if my sales experience and success can be applied to rendering.

 

Actually I'm in Australia, very big property bubble that's starting to pop so I showed up a bit too late for the gravy. My impressions generally came from the meetings I had, talking to other developers etc and the ones I did close. The phone calls I had were generally much more in polite but those were mostly the "maybes" or the "we already have someone"s. But it was the feeling and attitudes that came across in-person that were by far the most educational.

 

I should be thanking you for writing about your NYC experience. Good to know that at least some people out there not doing bottom dollar work. Basically though the nail in the coffin was my boss at the time basically wanting to counteract everything I wanted to do and race to the bottom ensuring that neither of us made a living. He also missed revisions being where the real money was at too, which was also my gut feeling at the time. Checking it nearly 6 months later it seems his company is still in neutral/zombieland unsurprisingly.

 

I would love to take another run at it if the opportunity came up with a a company more like the one you're describing but we'd have to be on the same page i.e. not swimming in the kiddie pool but at the same time the sheer level of idiotic competition driving down market value is not a place I'd want to be either.

[lasse1309]

the three world modell is outdated anyway; it stems from the time the world was devided in three blocs which was first world associated with NATO/USA/"the west", second world associated to USSR and third associated to neither of them; had not really anything to do with wealth in the first place - of course the societies in the countries in the "worlds" share certain things among each others..

 

so if you would stay in the three world modell, then a large number of "Eastern Euro" countries would be first world anyway because of being Member/associated with the EU - and the USA (and even the NATO).

 

Ico's point is very fair and correct at a bottom line: Find your niche and grow it from there. The business is always a "who you know thing", best contacts and jobs come from referrals - the internet is a good place to generate awareness and find some initial good contacts (among all the cheapos that ask for 300€ pay for whole project) - the growth and developing happens in the "real" world - whatever first, second, third, fourth, new, old...

[RyderSK]

Munly, last word about topic you should have been paying more attention at school.

 

"3rd world countries", term outdated as Lasse mentioned, are primarily used in derogatory way today towards countries of actual humanitarian needs. Think access to general education and medical needs.

 

If your competition is running bunch of 3k euro i7 workstations, with broadband internet (every eastern european with perhaps exception of Albania has on average 10x faster broadband than whole Australia), they're not "3rd world country". Stop using your broad brush for everything.

 

Pointing fingers at others of any sort is ignorant, you could just as well point fingers at student interns, people doing cheap moonlight freelancing in your own country, etc.

 

Given how some of the Aussie companies are doing (going as far as hiring top talent from Europe because local pool is small), Squint/Binyan/etc.. I would say things are more than good for most.

 

Some good writting from ICO though.

Edited November 4, 2015 by RyderSK