How Healthy Is Our VFX Industry?
This might be the toughest, most complicated blog I've ever written. I've been concerned for some time now that something serious is ailing the VFX industry. Too many vintage and new VFX houses are going under, and not just here but overseas as well. From all I can discover, there is more VFX work then ever before in features, TV and commercials. I've been chronicling this industry from the very beginning and I've developed a theory: The VFX industry is suffering massive evolution pain.
In the beginning there wasn't much work because we didn't really know what could be done or how to properly use VFX. The cost for those original Cray super computers needed to do the simplest work was so high, that it limited the number of houses doing the work, and kept the output cost very high. But then the debt structure on those multimillion dollar machines alone killed several houses. In those days practical FX were much cheaper to create and we knew better how to do them. Then along came the less expensive, powerful Silicon Graphics Computers and that both saved the industry and caused it to expand rapidly.
Originally there were very few people with the combination of technical and artistic skills needed to produce VFX watchable in movies even despite the fact that standards and expectations were lower then. Slowly, software became available—sometimes bootlegged—and a farm team of 3D animators began to develop among young computer geeks and artists and early intersections of the two. Slowly the field began to take shape and with the advent of low-priced Apple and PC computers with some speed and power, more and more people became interested in this exciting and passionate potential career.
VFX studios grew into major contenders led by great special effects pioneers like John Hughes, Doug Trumbull, Scott Ross, Carlo Rambaldi (who passed away last month), Ray Feeney and so many others pushing the envelope as the computer technology grew up around them. The excitement spread. Dozens, even hundreds of very small studios started popping up to do local TV motion graphics, compositing, and even feature work. They, too, began to grow as more and more work became available. The smaller houses were dependent on off-the-shelf software from Softimage, Alias-Wavefront, Autodesk and eventually Adobe. The big houses started to pay very nice salaries to keep their best people around. They developed enormous overhead, and built posh, extensive facilities. Pioneer studio, Rhythm and Hues, provided Herman Miller Aeron desk chairs, built and stocked kitchens, provided recreational facilities, and sometimes provided comfy beds in some offices so people could work all hours. R&H even developed their own kind of innovative medical insurance that would pay for the alternate medical services that many of their artists wanted covered. All in all, it was a great time with plenty of work, limited competition at the highest levels and serious technical innovation. R&H and other pioneer studios like RFX used their own very sophisticated software and had a development team to modify it as needed to create unique VFX.
In those days VFX was a wide open, exciting new field of discovery. The new, fantastic VFX fired people's imaginations and the excitement began to feed on itself. Young people poured into the industry in droves. Practical special effects people saw the writing on the wall and began to retrain in digital VFX. Aerospace people, engineers and simulation artists, were getting laid off and looked to digital effects as an alternate survival route. I trained some of these guys at Silicon Studios in Santa Monica, CA. The supply of talented VFX artists and technical people began to expand rapidly.
For a while the increase in work vaguely matched the increase in workers and a precarious balance held for a while, but the field of VFX was and is evolving at what appears to be an exponential rate. In fact, I've never seen a field evolve so quickly. I'd even venture to say that Ray Kurzweil's double exponential acceleration of progress might be in effect here. Today, there are so many trained VFX artists and VFX houses, both large and small, that even with the enormous increase in the number of VFX shots being distributed, there isn't enough to go around. The field is over populated, clear and simple.
But the crux of the problem isn't that simple; it's way more complicated than that. The work is flowing out worldwide. Houses that used to get jobs with enough overhead and profit to survive can no longer do that. Their people are too expensive, their overhead is too high, and in many cases their management team has little or no training in business. Look at what's sadly happened to the venerable Digital Domain.
There is another problem that makes running a VFX house difficult: normal film production cycles. The work is sporadic. It's hard to maintain a full-time, year-round staff of top people when the work comes in torrents and drabs. Nearly impossible. So the vast majority of houses go through cycles of project hiring and layoffs; it's part of their business plan, but it takes a toll. As things have evolved, VFX artists have become nomads travailing from studio to studio, city to city, country to country, in search of work. That makes it hard to have a family and a normal life.
Studios have also discovered that fabulous VFX can be more important to a film's success than big name, expensive actors. We all know the top 20 grossing films of all time are built around sophisticated VFX. But alas, the studios are responsible to their stock holders and must turn a profit—they go where the money is. That's tough when a VFX feature costs far north of $150 million these days and there's no way to tell how well it will do at the box office. So they have to get the biggest bang for their buck. That means getting more and ever more amazing effects for less money per shot. Where 30 shots used to be a lot, now it's not unusual to have upwards of a thousand shots in a single major FX film. To meet demand, those shots are farmed out to many houses, large and small, across the world. What does that mean? To hit deadlines, each house gets a very small and less profitable piece of the big pie. That forces facilities to do things they regret later. The bidding process has become insanely competitive with some houses take work they know they will loose money on, just to keep the doors open, in hopes of nabbing some profit down the road.
The result of all this is an entire field that is caving in on itself. Even the biggest, most venerable houses are in trouble, turning little, if any profit, sustaining massive losses and closing down or selling off chunks. But amid all this seeming chaos there is hope. There are shining examples of healthy cells. It turns out there are ways to not only survive, but thrive in the current environment and I'll begin talking about that in my next post.