Visual special effects industry in trouble

I didn’t watch the Oscars. I never watch these awards shows as they seem to me to be incredibly boring. But I did read about the fact that the company Rhythm & Hues that won the Academy Award for special effects for their work on the film Life of Pi had filed for bankruptcy, making the occasion bittersweet for them.

Life of PiRhythm & Hues was also behind films like Babe, The Golden Compass and Snow White and the Huntsman. Another visual special effects (or VFX) outfit Digital Domain Media Group had also filed for bankruptcy before being bought by another company.

Over 400 animators demonstrated against this state of affairs at the Oscars ceremony.

The reason I was alert to that piece of news was that reader Gordon had sent me a link earlier telling me that although special effects are playing such a large role in films these days, the companies that make them are struggling to stay in business. I don’t understand at all the economics of the film industry but Gordon, who works in visual special effects, gives some insight into what is causing this state of affairs, and it is the usual story of putting the squeeze on the people who do the actual work, while the companies make huge profits.

Basically, the visual effects studio responsible for Life of Pi is filing for bankruptcy today and it’s another in a long list of studios that have been shutting down lately due to international subsidies and market pressures from movie studios to produce work as cheaply as possible with no regard for quality.

Most of the visual effects work is being outsourced to Canada these days, since British Columbia offers the studios a major tax incentive without any requirement that the movie be filmed there – it’s all being done by the same people, they’re just being forced to move to Vancouver to do the same jobs – all of the major visual effects houses are being forced to cut costs so they’re all chasing subsidies and forcing their employees to follow them.

It also seems that the movie productions are also very poorly run these days – it’s not uncommon for movies to go on hiatus for 4-6 months while they get their shit together and the vfx houses that have staffed up to handle it just have to eat the cost or risk losing artists to other studios. Then there’s the usual problem of a client failing to hand over plates to the fx house on time (again, 4-6 month delays aren’t uncommon) but the movie’s release date remains fixed, so everything has to get done in half the time – then people complain about how crappy the cg looks and we get the blame again.

A friend made the analogy that it’s like forcing a contractor to rebuild a wall 5 times and expecting them not to charge you for it.

It’s a pretty sad state of affairs that while the movies are so heavily reliant on visual effects and make hundreds of millions of dollars for the movie studios, the companies that supply those effects are basically getting the shaft.

It’s also a pretty sad state of affairs when you can win every visual effects award the industry has to offer … and go out of business two months later – that has to be a sign that the industry is completely messed up.

It is true that these kinds of effects that make the films look so unbelievably realistic are extremely difficult to create and thus expensive. Life of Pi required 600 animators to do the tiger. But studios presumably make a lot of money on these films so why should not those subsidiaries that play such a large role in their success also benefit from it?


  1. says

    But studios presumably make a lot of money on these films so why should not those subsidiaries that play such a large role in their success also benefit from it?

    Because that -- workers profiting from the fruits of their labour -- is socialism(*)!

    (*) SOCIALISM!!!!


  2. kyoseki says

    It really is a ridiculous state of affairs.

    Vancouver is realizing that they’re directly subsidizing the US film industry, so they’re probably going to start scaling back subsidies, meanwhile Ontario and Quebec have, for reasons best known to themselves, decided they want in on the act, so now the FX houses are having to open satellite offices there and make their workforce relocate again.

  3. brianwestley says

    “But studios presumably make a lot of money on these films”

    Google “hollywood accounting”. Films almost never make a profit on paper.

  4. says

    I’ve been a fan of special effects my whole life, and used to devour Cinefex magazine whenever it came out (simply because I love the sheer creativity that the special effects guys demonstrated in figuring out how to do things) Now it seems that Cinefex has become the “which digital art company rendered what part of which movie.” Computer graphics is fascinating in its own way but ultimately boring once you’ve got the model, the motion capture or physics computation or crowd-engine, textures and artwork. I suppose it’d be interesting to hear about how to build a big server farm but that’s just map/reduce algorithms and building a big data bus.

    I still watch the Harryhausen stop motion effects work and think it’s pretty darned cool. But a couple months ago I was showing one of the Sinbad movies to a young lady who asked me why the animation was so jerky. Ow.

  5. says

    Oh, and one of the other reasons for the transition is that there are now slave art factories in N Korea and other parts of the world, where you can have your cells drawn by underpaid labor. It’s much cheaper than having artists in Hollywood do the animating.

  6. kyoseki says

    I think this attitude is what’s crippling our industry, the belief that we just slap things together with off the shelf software. Cinefex does nothing to help this point of view since it really never has enough space to go into the details, a year long R&D project involving a dozen people across multiple disciplines gets reduced to “we developed a new wave tool..”

    We, as VFX artists, have become our own worst enemy, we make it appear that the technology to do this stuff just sort of magically appears, whereas the simple fact of the matter is that we drive the development of this stuff and in no small number of cases, the tools we develop in the studio find their way back into the release software.

    Models, textures, skies, all of this artwork is done by hand, along with all of the animation, of which there is a HUGE amount -- there was no motion capture in Pi, for the very obvious reason that tigers, fish and whales don’t like having tracking balls stuck to them and won’t take direction even if they did -- the open ocean, similarly is rather difficult to motion capture.

    Motion capture itself is also notoriously crap to work with, especially if the director decides he wants a different performance after it’s been shot.

    As for the crowd system, in Life of Pi, the vast majority of the meerkats, for example, were all animated individually BY HAND, no different to how Harryhausen animated the skeletons in Jason & the Argonauts. Certainly in the cases of heavy interaction with the principle actor, crowd systems simply do not have the level of control necessary for feature film work and if they did, building a fully functional meerkat AI is going to take a lot longer than having an artist create realistic animation.

    Procedural crowd animation works for the background and wide-angle stuff, but never for the hero characters. Even within the crowd system, the brains that control the meerkats had to be developed to handle very specific art direction; there is no “meerkat” preset in Massive, and even if there were, it wouldn’t do what the director wanted because presets never do.

    Then, of course, even once you have the animation, you have to perform physical simulations to handle muscle jiggle, weight transfer and grooming the fur, followed by another team of artists who will take all of that, light it believably and get it rendered, then ANOTHER team of artists picks that up and has to integrate it into the original plate which also may or may not require a great deal more finagling -- a task made even more difficult on Life of Pi because it was a true stereo movie, so a lot of the 2d cheats that we can use no longer apply.

    Even in the physical simulation realm, most of the tools are reinvented constantly, the fluid simulation software we use today didn’t exist 12 months ago, it’s constantly getting more complex and more powerful, because we’re driving the development of it, but we ALWAYS have to break open the software and rewrite it to handle specific cases, which is what ultimately results in a great looking film -- assuming we’re given the time to do it.

    Believe me, there’s nothing “boring” or trivial about any of this, if it were, we wouldn’t be working 120 hours a week trying to get movies delivered, we’d just hit the tiger/dinosaur/ocean/explosion button and go home.

  7. kyoseki says

    Even in traditional animation, the keyframing is done here, it’s only the tweening that’s done overseas (I dated a Simpsons animator for a while).

    In digital art (there’s nothing “computer generated” about it), the computers make doing the tweening automatic, but you still need an experienced artist to direct it and you wouldn’t believe how involved that job gets.

    Cheap labor is only an option for what’s considered the grunt work, the labor intensive stuff that doesn’t require a great deal of experience or creativity. What were considered entry level jobs a few years ago, namely things like rotoscoping and matchmoving are now farmed out to satellite offices overseas.

    We are completely ok competing on a level playing field with India or China, even the UK and Canada, but the playing field isn’t level -- the UK and Canada are subsidizing the vfx industries there to the point where the vfx studios open satellite offices and the same person, and believe me, it is THE SAME PERSON, ends up doing the job, they’re just getting forced to move to Vancouver or Montreal to do it.

    … all because the movie studios regard VFX as a disposable resource to be obtained as cheaply as possible -- which is why we invariably come after even the fucking caterers in any movie credits.

  8. leni says

    Why are FX studios agreeing to this insane demands? Is it just all a part of the low-ball bidding to get the jobs?

    I mean, actors have contracts with clauses about their weight and hair styles. Surely the FX studios can have clauses about timely submissions and who’s going to pay the overtime when the work has to be done in half the time originally agreed to. Can’t they?

  9. Dunc says

    A friend made the analogy that it’s like forcing a contractor to rebuild a wall 5 times and expecting them not to charge you for it.

    Sounds a lot like the software industry then… I usually say it’s like getting 3/4 of the way through a building project, and then the client turns around and says “Oh, and we’d like a basement. And it should face the other direction.”

    It’s like people think that just because you do it on computers, it’s not real work.

    Why are FX studios agreeing to this insane demands?

    Because the clients have the money, and they don’t. Also, the clients can afford much better lawyers -- because the clients have the money. Sure, you could try to sue them for breach of contract, but you’ll go bankrupt in the process. Plus the contract would probably go to someone more accommodating anyway…

  10. kyoseki says

    Well remember that US FX companies are competing with international tax subsidies for most of the other countries involved. So a US studio has to REALLY underbid things just to get the work, they end up paying the artists for the current production out of the advance for the next movie.

    As soon as a movie gets delayed or pulled, that’s it, they fold -- this is euphemistically termed a “cash crunch” and it’s what ultimately did in R&H (and most of the numerous other houses that have closed their doors in recent years).

    Even the UK FX houses (who themselves enjoy subsidies) are having to outsource work to Canada to chase subsidies because otherwise they’ll lose the jobs to the VFX houses who do -- I originally moved to the US from the UK in 2004, when the UK industry was suffering from a strong pound, getting work done at even ILM was cheaper than most UK studios, which is why the subsidies came in in the first place.

    There are only about 8 major VFX facilities worldwide (4 in the US, 3 in the UK and 1 in New Zealand), so an international trade organization would seem to be the logical solution, but so far we’ve seen major resistance to that on the part of the various FX houses -- hopefully the recent bankruptcy of R&H (who basically did everything right, high quality work, satellite studios in India for labor intensive work and offices in Vancouver for subsidizing the expensive talent) will show the rest of the industry that nobody is immune.

    Even since R&H filed for bankruptcy, a smaller studio has been forced to close a couple of satellite offices and I’m hearing a lot of rumblings from other facilities that they’re missing paychecks and may shut up shop as well.

    If it was only one or two facilities that were in dire straits, then that would indicate mismanagement, but the entire industry is suffering from this, so hopefully it’ll spur people into action.

    I can say in the nearly 20 years I’ve been working with computer graphics (from military simulation to feature films), I’ve never seen the industry as a whole this pissed off at once.

  11. kyoseki says

    Key frames are the specific poses and timing that a character’s performance (or in fact any visual effect) needs to have; think of them as the key poses in a dance routine, for example. Whereas tweening (shortened from “inbetweening”) is the interpolation between those poses.

    If you were to consider a 2 dimensional graph, the keyframes would be the minimum points necessary to recreate that graph (like the maxima and minima on a sine curve), while the tweens would be the interpolated data points from one keyframe to another to give you a smooth line.

    Computers are great at figuring out the interpolation part of the graph, (although they generally still need some help, simple bicubic interpolation looks very mechanical, so we usually use bezier curves and mess with the handles), but they’re terrible at figuring out what the initial graph should look like, because that requires artistic decision (and constant reworking based on artistic input).

    Tweening makes the animation flow more smoothly, but it’s the keyframes that determine the performance and whether you’re talking computer graphics or traditional cel animation, it takes an experienced animator to set those keyframes.

  12. No One says

    Keyframes are the important poses in animation. If a character sits from a standing position, the standing position and the sitting position are keyframes, the rest of the movement might be considered ‘tweens (in-beteweens). Tweens are considered “grunt work”. Computers can take over some of the tween tasks, but it never looks good the 1st time. You have to go back and tweak, look at the results, tweak, look at the results… I have done animation and VFX in the past. It sucks. After endless rounds of changes I end up working for a dollar an hour. So I am very cautious in accepting that type of work.

  13. kyoseki says

    It’s like people think that just because you do it on computers, it’s not real work.


    “Oh, the computer does that, just rerun it” is the bane of our industry, along with “we’ll fix it in post” which is an inexperienced director half assing things on set and then expecting us to fix it, usually without expecting to pay for it.

    Because the clients have the money, and they don’t. Also, the clients can afford much better lawyers – because the clients have the money.

    Again, you’ve hit the nail on the head.

    There are four major VFX facilities in the US;
    Industrial Light & Magic (now owned by Disney)
    Sony Pictures Imageworks (owned by Sony)
    Digital Domain (independent)
    Rhythm & Hues (independent)

    There are a number of smaller studios that often get less effects heavy sequences, but only those four can handle entire movies, particularly the blockbusters.

    All of them have satellite offices in Canada to take advantage of the tax breaks (which can pay up to 60% of an artists’ salary -- and labor is by far the most expensive part of this industry, which does tend to scupper the idea that the computers do all the work).

    .. and of those, both Digital Domain and Rhythm & Hues filed for bankruptcy protection within the past year.

    The interesting part here is that when a project gets awarded by a movie studio to one of the independents, they’re not directly financing their competitors, but it’s the independents who are going out of business because they don’t have a giant pool of studio money to carry them through the lean times and the studios continue trying to milk them for the maximum amount of work for the lowest possible price.

    Quality, it seems, is secondary to cost, which is why we get really irate when people bemoan “crappy cg” in modern movies -- it’s only crappy because we were forced to cram half a year’s worth of work into 1 month.

  14. says

    Thanks for the schooling! Very interesting and, as you say -- not the kind of thing you read in Cinefex!

    Typical Cinefex quote: “to make the crowd of 10,000 orcs flow around the castle realistically, we turned to frobozz simulations, who write a Maya plug-in for us.” As a programmer from the 80s who worked on databases and never did graphics I have absolutely no idea how much work that is…

  15. kyoseki says

    Yep, as I say, I think Cinefex really isn’t helping us 🙂

    They gloss over the technical stuff because 99% of their audience won’t understand it, so it effectively reduces the technical side of things to “magic” and does a little hand waving to avoid boring people.

    .. but the simple fact of the matter is that the only real difference between what Harryhausen did and what we do for the most part is that the tweening is largely automatic and we have “zoom” and “undo” capabilities -- he was never asked to obsess over the look of a particular tuft of hair or to art direct 1 of the 10,000 Orcs in a battle scene (incidentally, the easiest way is just to delete the offending Orc and do it by hand :))

    … and, of course, Harryhausen was never asked to make an explosive fireball “snap like a dog” or to make billowing smoke “less whimsical” (seriously, I’m not making those up).

  16. leni says

    Because the clients have the money, and they don’t. Also, the clients can afford much better lawyers – because the clients have the money. Sure, you could try to sue them for breach of contract, but you’ll go bankrupt in the process. Plus the contract would probably go to someone more accommodating anyway…

    I suppose, but that’s true of almost any business that has clients, isn’t it?

    For example, I used to work for a contract pharmaceutical lab and many of our clients were large pharma companies whose names you would recognize and we had similar problems. Nevertheless timelines are part of the contracts. You do your best to work around them when there are problems (eg delays in manufacturing) and sometimes you eat the cost to make the client happy, but not so much you put yourself out of business. Baseline cost for X time for Y type of study, they want it done quicker they pay more. Of course, that’s probably an industry with more steady work and government regulations make cutting corners not an option (or at least not if you want to stay in business), so maybe that’s not such a fair comparison.

    It still seems like it would not be so difficult for the big 4 FX companies to just put the hammer down and agree to some industry-wide standards. What they do is important and specialized and not very easy to replace on the fly- it seems like they would definitely have the leverage.

    Anyway, thanks for the info kyoseki, it’s very interesting. I wish you and your colleagues the best of luck. Too bad striking is so hard, really sounds that industry could use it.

  17. kyoseki says

    Anyway, thanks for the info kyoseki, it’s very interesting. I wish you and your colleagues the best of luck. Too bad striking is so hard, really sounds that industry could use it.


    I actually don’t know that striking will be necessary, the studios have managed to cripple the vfx industry so badly that there’s a real possibility that next year’s blockbusters simply won’t get released on time anyway, or they’ll have unbelievably crappy fx because they’ve been farmed out to guys working in their garages (I’m already hearing rumors that the effects for a few of the major tentpoles this year are looking a bit ropy simply because they’ve been farmed out to the smaller studios who have bitten off more than they can chew -- and even then, a few of those are on the brink of bankruptcy too).

    We were talking about this at lunch today and there’s a good 15 or so super VFX heavy movies releasing in the next two years that haven’t been awarded yet, nobody anywhere is actively working on them, which means the VFX houses aren’t getting any money, so they’re laying people off and there’s no guarantee that those people will be available when the shows actually ramp up.

    Hopefully when the studios’ bottom line gets impacted, they may realize they’ve shot themselves in the foot and start questioning how they do things. As for R&H, there’s a pretty strong possibility we’ll get a buyer lined up and come out the other side of bankruptcy, but what form the company will take at that point is anyone’s guess.

    The best solution we can envisage is becoming part of a studio that wants to develop it’s own content, giving us some kind of stability, but it’s all in the hands of the bankruptcy court right now and if they can make more money for creditors by stripping the company for parts, that’s what’ll happen.

    I’m actually tempted to just get the hell out of the industry and do something else -- I make some serious barbecue ribs and food is something that can’t be easily outsourced 🙂

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