Thoughts on the VFX Crisis

If you’ve been on Facebook or Twitter lately, you’ve probably seen a number of users who have replaced their pictures with green backgrounds. These people, normally used to being invisible, are trying to give a little extra visibility to a crisis that isn’t getting much attention in the media. While almost every industry is being affected by today’s global recession, a disproportionate number of visual effects studios are shutting down even as their own films set box-office records at home and abroad.

90% of the background and 50% of the Avengers will be added in post.

This year, Bill Westenhofer accepted the Oscar for Best Visual Effects while his employer, Rhythm & Hues, was filing for bankruptcy. To add insult to injury, the Academy organizers cut his mic when he tried to mention that his team of award-winning effects artists were now unemployed. This was a painful snub, since on most of today’s films, visual effects artists put in the majority of the man-hours, represent the largest chunk of the crew, and often create the vast majority of what the audience actually sees on screen.

For example, 2012’s Disney’s Marvel’s Joss Whedon’s Avengers’ climactic battle took place in an entirely digital New York City, was fought against entirely digital alien invaders, and usually involved digital stuntmen protecting digital extras from digital explosions. For Life of Pi, most of Claudio Miranda’s Oscar-winning cinematography was actually shots of flat blue walls that were replaced with completely original renders from the Rhythm & Hues team.


So, if more and more of today’s blockbuster filmmaking is done in post, why are post’s mightiest unsung heroes closing their doors? The two biggest reasons are that Hollywood studios aren’t sharing their profits, and that foreign animators are willing to work cheaper. Every year, more effects work is being outsourced to Canada, eastern Europe, and Asia.

This situation is kind of personal for me, since I’ve worn most of the hats in the effects and animation business, and over the years I’ve gotten to meet Bill Kroyer and other members of the Rhythm & Hues team. I’ve also worked for a New Zealand animation studio that picked up a lot of outsourced work from American and Canadian productions, some of which we further outsourced to Malaysia.

Outsourcing is an inevitable part of free market economics. If high-quality workmanship can be purchased cheaper overseas, the buyers of that workmanship will go there. In 2008, James Cameron employed Weta Digital to create the effects for Avatar, rather than Digital Domain, the effects company he co-founded in 1993. Last year, Digital Domain filed for bankruptcy, and is now owned by Chinese and Canadian investment companies.


The problem is that the basic economics of outsourcing are confused by the complicated tax subsidies that various nations have set up to attract international productions. Yes, Digital Domain and Rhythm & Hues did lose valuable movie contracts to foreign effects houses, but they were also financially weak after building their own foreign branches in an attempt to get those subsidies themselves.

Today, protesting animators are blaming studios, bankers, and foreign and domestic governments. It’s not a very coherent message, since some are demanding an end to foreign film subsidies while others insist that California and the U.S. must fully incentivize their businesses and their art. To be fair, most of us effects artists are pretty inexperienced when it comes to politics and business, but this situation is nothing new.

Several years ago I watched as a number of Australian effects studio startups dove deep into debt while preparing for the giant Hollywood films they presumed would come to Sydney after the Star Wars and Matrix trilogies. These big-budget co-productions never came, and most of those companies disappeared in a cloud of liquidated computer hardware.


Ultimately, the “free money” that other counties are handing out to buy movie productions is costing them a lot, and it’s unwise to bank on incentives that could change at any time. Besides, a government forcing taxpayers to support art only gets you bad art, and a state-patronized industry is never industrious for long.

The other solution that’s been bandied about is an effects artists union, designed to compete with all the other guilds and unions that have a stranglehold on Hollywood. A union, after all, would enable American animators to demand bigger contracts and make it harder for them to compete with each other. On the other hand, those bigger contracts would make it impossible for them to compete with the cheaper international companies that are already undercutting them… and now they’d have to pay union dues.

Besides, the absence of a rigid, innovation-stifling union is part of why the VFX industry has developed so fast in the first place. The whole reason that the early ILM wizards were able to be such creative problem-solvers was a freedom from big Hollywood studio compartmentalization. Optical printer techs could invent new cameras. Makeup guys could build hydraulic rigs. Matte painters could create Photoshop. Any person could wear any hat and do any job.


I realize that an effects artists’ guild might not be as restrictive as, say, the Teamsters union, but now is a time when the industry desperately needs flexibility. Entertainment markets are changing in almost every conceivable way, and we have technical breakthroughs turning our workflows upside-down every few years. Perhaps a simpler guild or trade organization could help standardize processes and streamline adaptation without the rigidity of a typical Hollywood-style union.

And if it turns out that big-box effects and animation companies can’t be competitive in the 21st century, let’s not feel compelled to try and build a bunch of artificial walls to prop them up. Those walls will only get in the way if we actually need to be smaller and more agile. If it takes fewer artists to do specific jobs, then we need to accept that now, rather than overextend ourselves to maintain yesterday’s system, and be unprepared for tomorrow.

When ink and paint departments started to be replaced by Xerox machines and computers, some people complained about the jobs that would be lost. And eventually, hundreds of diligent painters who had spent thousands of hours putting tons of paint on millions of cels did lose their jobs. But in traditional 2D animation today, we no longer think of those countless menial hours of mind-numbing drudgery that we don’t have to do as time lost, but as time saved.


The big Hollywood studios should definitely demonstrate more respect toward to the men and women who are creating 80% of their motion pictures, and the directors who are honored for those animation-dependent films could show a little more gratitude to their animators. The effects companies themselves, however, will need to share part of the blame for financial failure.

If we have underbid on too many projects or signed bad contracts, that’s really our problem. In the same way that we can’t blame it on other governments or the big studios, we’re also not going to solve the problem by making it the responsibility of our own government or some union officials.

The effects and animation industry, as a whole, is famous for being flexible and innovative, and for being able to solve problems and create solutions for any movie challenge. Now is the time for individual artists to be responsible and creative – and to use that creativity off the screen as well as they do on it.

Images sourced from BeforeVFX

  1. Hi Mr. Botkin,

    Very good article and analysis of the industry’s problem. It sounds like smaller, cheaper, and more agile teams are going to be winning the contracts these days.

    God Bless,

  2. Thanks for this. I read it in Feedly without knowing the source and was surprised by the humility of the recommendations. Now I see the source and it makes sense

  3. Thank you for this very informative article…it’s good for folks to realize that there are entire workforces of very talented artists. Beyond the Douglass Trumballs, Stan Winstons, Rob Bottins, and Dennis Murens that movie fans hear from on DVD extras, there are so many talented, yet unknown and tirelessly working artists that create these special effects. I just saw Life of Pi and the amazing and beautiful imagery in that film weren’t created by studio executives. These very talented artists should gain some sort of protection for themselves, whether that becomes an Effects Artists Guild, or whether artists will start to relocate outside the US as California’s ridiculous taxes continue to drive film production out of Hollywood.

    Thanks for informing us about these deserving and hard working artists.

    - Jon Kapp

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