VFX Go Bust

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What does the collapse of America’s VFX (visual effects) industry mean for artists?

If you have any friends in the film or visual effects industries, you may have noticed their Facebook profile pictures are now bright green following February’s Oscars. No, their profiles haven’t been hacked – they are showing their solidarity with visual effects artists who are taking part in what has been dubbed the “Piece of Pi Protests.”

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Photo by Flickr user neonmarg
Photo by Flickr user neonmarg

While director Ang Lee’s Life of Pi was being honored for Best Achievement in Visual Effects at the Oscars, hundreds of protestors stood outside of the Dolby Theatre holding signs with slogans such as “We want a piece of the Pi,” and “Respect for VFX,” and “My Job has been Outsourced.”

The film, which was one of Hollywood’s biggest successes of 2012, grossing more than $500 million worldwide, featured visual effects from effects house Rhythm & Hues Studios. Several weeks before the Oscars, Rhythm & Hues laid off several hundred employees and filed for Chapter 11 bankruptcy protection, sending shockwaves through the visual effects industry.

“My friends who were [at Rhythm & Hues] said that they heard rumors about it a week before, but it was a big shock when it actually happened,” says a former employee at Rhythm & Hues who worked on Life of Pi until April of 2012 who wished to remain nameless. “Some employees got phone calls on Sunday night telling them not to come in on Monday, and that they wouldn’t be paid for their last four weeks of work,” says the former Rhythm & Hues employee. “By ‘some’ I mean almost 300 [people.]”

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There are several factors that have lead to this situation, where a visual effects company responsible for a film that brought in over half-a-billion dollars is forced to lay off workers and file for bankruptcy, but fundamentally, given the current market, Hollywood studios are unwilling to pay enough to make the domestic industry profitable or even sustainable. As a result, effects houses must increasingly outsource to foreign countries like Singapore, Taiwan and India to keep costs down.

A scene from Life Of Pi before visual effects have been added.
A scene from Life Of Pi
before visual effects have been added

Phillip Broste, lead compositor for visual effects house Zoic Studios wrote in an open letter to Life of Pi director Ang Lee, “Our employers scramble to chase illegal film subsidies across the globe at the behest of the film studios. Those same subsidies raise overhead, distort the market, and cause wage stagnation in what are already trying economic times.”

According to the former Rhythm & Hues employee, “it’s unbelievable that the actors get paid millions of dollars to work a few hours a day, while visual effects artists for Oscar-winning films work 60-90 hour weeks and can still end up unemployed and struggling to feed their families.”

Another problem faced by visual effects companies is that Hollywood studios often place unreasonable demands on these companies because they do not fully understand the changes in efficiency that digital effects can bring if used properly.

“In my humble opinion, if digital technology were used as efficiently as possible the average studio budget would be about 25-35 [rather than 100] million dollars. A good example of what can be achieved at that budget level is Looper,” says Justin Eugene Evans, director of A Lonely Place for Dying, a Hollywood-class film made for about a quarter of a million dollars.

“But when studio executives don’t understand visual effects, they don’t understand how to budget for them. The result is a system that simultaneously exploits visual effects artists, puts smaller studios in a position to go bankrupt and overpays name-brand FX houses to ensure VFX are done on time…even when that means infinite iterations on shots that have nothing to do with the story simply because the director likes to tinker,” says Evans.

With the bankruptcy of Rhythym & Hues, what does the future hold for the visual effects industry?

A scene from Life of Pi featuring visual effects from Rhythm & Hues Studios.
A scene from Life of Pi featuring visual effects from Rhythm & Hues Studios

“The recent closures of some VFX companies will temporarily reduce the production capacity of the industry, and potentially create upward pressure on prices and schedules. However, the strategic position of VFX companies remains fundamentally weak,” says Dan Maas, owner of Maas Digital LLC, a visual effects company. “Talented artists at the top of their game will still find their skills in high demand. But they will likely have to stay mobile, as the companies that employ them continue to form and disband according to changing market conditions and tax rules.”

Understanding the challenges faced by the visual effects industry, Maas made the decision to move away from visual effects and use his talents in an industry that does not face these problems, the video game industry.

“The gaming industry is an interesting ‘escape hatch.’ Games require much of the same skill set as film VFX to build, yet gaming companies are in a stronger strategic position than their VFX counterparts. Game studios usually own the intellectual property they create, and their products are less commoditized than big-budget film VFX,” says Maas.

But most visual effects artists may not be able to switch to careers in the more lucrative gaming industry. And regardless, visual effects will continue to be an important ingredient in film.

“Thanks to advancements in computer hardware and software, eye-popping visual effects are becoming easier to create day by day,” says Maas. “We’ll continue to see a steady stream of Hollywood releases with impressive visuals, but they will be created more and more by interchangeable companies staffed by less-experienced artists working in tax-advantaged locations. The ‘golden age’ of VFX, in which highly specialized, proprietary techniques were required to make anything look good, has come to a close.”

“Right now, there are tons of talented, highly experienced artists who are out of work, so there will be a lot of competition for the few remaining positions, and studios are outsourcing to countries that offer them tax incentives, so the future does look pretty bleak,” says the former Rhythm & Hues employee. “But now, at least people are starting the conversation about whether anything can be done to make it better.”

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Trained as an aerospace engineer, writer/director Jesse Veverka was a financial analyst on Wall Street before co-founding his own media production company, Veverka Bros. Productions LLC, with his brother Jeremy. He has worked and lived throughout Asia, including Japan, Korea, Indonesia and China, where he has produced a number of award-winning films. His articles have appeared in various publications including CNN Travel, Japan’s Metropolis Magazine and China’s Global Times. He was born in Ithaca, NY. Jeremy Veverka is a media professional with specialties in documentary filmmaking, photojournalism, cinematography, sound design, and commercial work. His award-winning films, including the feature documentary China: The Rebirth of an Empire, cover a range of geopolitical issues and have been screened at dozens of film festivals worldwide. With a degree in English from Cornell University and extensive travel experience throughout Asia and the Middle East, Jeremy brings his background in storytelling and international journalism to each of his projects and strives to give a voice to historically underrepresented groups. To learn more, visit www.jeremyveverka.com or follow Jeremy on Twitter: @JeremyVeverka.