Variety:F/x biz in throes of the Walmart effect:(The Studios talk about their side)


Well, I think the issues related to the financial sustainability of the industry are universal internationally. Are there VFX studios in other countries making profits hand over fist? It’s unlikely as there have been many studio closures in various locales worldwide. Whether your company is located in London, Los Angeles, Singapore, Vancouver or Mumbai the goal of the major movie studios is to steer the bidding process, taking into account all relative labor costs, government subsidies, taxes, etc towards an acceptable level of work with little to no profit margin for the VFX studio doing the work. The cost of labor may vary greatly, the government subsidies may differ, but the profits are the same.

There really isn’t much room for nationalism when discussing this problem. Whether or not artists based in countries can compete with Americans isn’t even up for debate as we have seen world class work being done all over the globe for the better part of a decade now. So yeah, it’s a global industry and it’s globally unsustainable as well. The profits (or lack thereof) are unsustainable, the government subsidies are unsustainable, the forced migration of labor is unsustainable. If you think these issues will be contained only in the American VFX industry I think you may be mistaken.


Yes. This is the worst time to get into film vfx unless you’re living in India or China. Find another sector or something different entirely.


No, I honestly did not know the answer to my question until other artists on here answered it. I live in Los Angeles, not London, so I did not know the state of the London VFX industry. I enjoy watching British productions like Doctor Who, Red Dwarf, Sarah Jane Adventures, Primeval and the legendary Walking with Dinosaurs. All of those shows have a ton of VFX in them, so for all I knew that’s what provided work for most of the British VFX industry.

However, you suggest that Hollywood provides most of the work for London VFX artists. I did not know that. I thought London’s VFX industry was self-sufficient.

In that case, you should pay attention to how Hollywood treats Los Angeles VFX artists. Just because your working conditions are wonderful now does not guarantee that they will remain wonderful. As mingbling pointed out upthread, Los Angeles VFX working conditions used to be as good or better than London VFX working conditions, and now they are worse.

Ask yourself what will protect London VFX artists from sharing the same fate as Los Angeles VFX artists.


De Faria might not have been the ideal choice for that article. He’s actually one of the easier and more understanding of the process big honchos between the various heads of the big six hydra.

It’s a bit like doing an article on dictatorships and interviewing the only real enlightened dictator of the last 200 years, and conclude that Stalin, Hitler, Pinochet and everybody wlese were, therefore, not a problem :slight_smile:

It’s true that WB has been, in my experience, one of the better studios managing a VFX project, and most of what I heard about De Faria, for someone that swims in a shark tank for a living, were definitely above par. This doesn’t, however, represent people’s experience with some other studios, heads and EPs that will remain unnamed.

Just saying.


This was my point precisely.

For the people who don’t care OR think that it will ultimately affect them… think again. If/when all of the major VFX shops close up here in the states, then Canada and the UK will end up with more work. And that will be great, for a time - but the movie studios will not stop continuing to SQUEEZE these VFX houses just like they’ve squeezed out the US VFX houses. More and more work will go to India and China and the UK and other places will see their working conditions deteriorate. It’s inevitable as long as the big studios want more for less.

The tipping point will only come when audiences stop going to see big blockbusters because the VFX are just not up to it. When you keep slashing the budgets for FX to line the pockets of the studios, something will end up suffering - that’s usually the VFX artist from what I’ve seen.

To paraphrase an old story… “They came for the VFX artists in that country, and I did nothing because it did not affect me… then they came for the VFX artists in another country, and I did nothing because it did not affect me… and then they came for the VFX artists in my country… I should have stood up for the VFX artists to begin with, because it ultimately affected us all.”


Apologies, I misinterpreted your tone, and funnily enough, you’ve misinterpreted my post too - I’m by no means saying that the industry is great outside the US; on the contrary, I’m saying that the problems faced by US artists are increasingly being faced by those of us abroad too, which is why the constant focus on US artists only is so frustrating. Studios are facing an increasingly bleak outlook here in London, for example, with loads of artists currently out of work because problems faced by the big VFX vendors in LA are being faced here too.

My earlier posts about certain things that I felt we exaggerated weren’t meant to paint a rosy picture, but just about keeping things in perspective as we all try to move forward.


I’ve worked in both L.A. and London.
In London I worked on a Nike/Big 5 Commercial.
Big 5 is a U.S. Western regional sports store. The ad was shot in L.A. with U.S. actors. The agency was out of New York, all post production was done in London with a crew of
3 Frenchman, 1 Italian and 1 Bulgarian and 1 very confused American.

I’ve also recently worked in L.A. in a studio where they sent a U.S. supervisor to London to over see shooting on shots for Dr.Who that were going to be done in Vancouver so the production company could take advantage the tax breaks.
Don’t ask me how that works though.

For UK TV shows most of the work still seems to be done in London though.
Keep in mind a UK TV series is usually only 13 episodes. So smaller shops can still handle most of the work load.

If the Studios stopped making major VFX movies the big 4 London studios, MPC, Double Negative, Cinesite, Frame store, would have a major problem. There already seems to be a slow down happening in London but you’ll have to ask the locals how bad.


Why cant penalties work both ways? why wasnt there a more robust contract? Theres plenty of talk about how the vfx house will incur penalties for every day late they are on delivering, but why doesnt it work both ways, with the studio being penalised for not getting the shots to the vfx house in a timely manner, and having to pay extra if the shots need to be rushed.

I expect the answer is that they dont want to lose the work and that the studio wont sign it, but so long as theyre willing to put themselves in a position where they have to ask their staff to work unreasonable hours, they have to take responsibility.

This sort of behaviour is the reason I stopped working at one particular studio a few years back; the boss would agree to produce work to impossible deadlines, then pass it onto us expecting silly work hours just because he didnt have the balls to stand up for himself or us during negotiations.


Studios / Producers have the vfx vendors by the balls so to speak. I can name plenty of occasions where vfx vendors have been forced to rebid on work and have increased costs due to the changes. The vfx vendor then asks for more money and gets told well if you cannot do it for the same amount of money we will take the job elsewhere. Right now an interesting trend is for the large vfx vendors to bid for the entire job, they then farm out the low profit shots to mid sized firms. Who fall over themselves to win 50 shot packages from the likes of Sony and ILM .



If you honestly didn’t know then my apologise too, although it is strange as the hot topic for a long while has been how the UK are ‘taking’ the work because of sudsidies.

Regardless, yes the same effect will most likely happen here (UK), as the confidence in more high level work happens further East. When and if it does, the wages for staff there will increase, companies will want more profit and it won’t be as cost effective. The same is happening for manufacturing in China. The GDP has gone up so much that companies are now looking at other countries, even there own for manufacturing. So with VFX, the work for US based studios will start moving back West, where it is more convinient (language barriers, time difference etc…)

it’s also not as simple as if its cheaper then thats where it will go. I worked in Asia for three years, and there are so many issues above cost that do start to outweigh the benefit of saving some cash.

Out of interest, I do frequently see jobs posted for LA, Luma Pictures seem to post on the jobs board here, so I presume there still is some industry there?


It’s funny when people bring up China/India in terms of VFX outsourcing. My experience living and working in China (2yrs as of last month) suggests that very little Hollywood feature work actually goes through here. Maintaining quality is difficult, there’s political issues, costs are increasing and the expectation for bids is that they’ll be cheaper than elsewhere. There’s only really two shops in China that handle that level of work and both are connected to companies running out of LA.

I believe subsidies have a much stronger impact on the market than the rise of VFX houses in the east. And the problem with subsidies from an artists point of view is that they change and throw entire facilities into disarray. That’s your migratory issue right there.

With regards to Luma I know they’ve been hiring for their Melbourne facility which brings up the Australian angle again. With Australia it’s worth noting the tolling bell for Fuel earlier this year and Dr.D before that (yes different circumstances I know). Either way I think calling out the Australian VFX industry as being one which is prospering is a very contentious statement.

I think over all the state of the industry is relatively simple to summarise:

  1. VFX films as a product are very desirable both financially and socially, so the subsidy game will continue to be played internationally in a world where international transitions are easier than they’ve every been.

  2. In addition there are a lot more studios capable of doing the work and also still wanting to get more of this work, which means it’s a lopsided market and the studios have the control.

Those things will more-or-less work themselves out:

  1. Governments will realise it’s a losing game to provide incentives to people who can just up-and-leave when the next cheapest offer comes along

  2. Some studios will die, some will merge, others will expand to incorporate other revenue streams. Economic Darwinism will continue it’s heartless and methodical dance.

What does this all mean? Well … until things balance out and stabilise the short-term outlook is probably going to be filled with pain, tears, the occasional awesome set piece and lots of threads about how we should unionise.

Just my thoughts :slight_smile:


Agreed. Although my time spent out in China I worked on both domestic and International features. There are more than two places in China I know of working on outsourced work, including my own. So yes! there is alot of hollywood work being done out there, perhaps not in the faciity you are at though.


Well I guess it depends what you mean by outsourced work? Lets say ‘shots for blockbuster features’ (and everything that entails rather than just roto/mm) and I think the list gets very short very quickly :smiley:

I’d agree it’s probably more than two (that would be just Beijing) but yeah, I think the threat from the east is much less scary than many people imagine for the next 3-5 years. After that, well the trick is getting into the Chinese internal market - lots of new cinemas every year here :wink:


Absolutely, couldn’t agree more. It is definitely much less of a threat than people think, and it is funny when people make a fuss on it. Getting the domestic work from China will be all the rage soon enough. Exciting times!


That analogy is seriously flawed but perhaps you intended it to be silly?


I disagree.

It’s not so much as a threat FROM China and other countries in the area, but FROM the studios looking to cut costs more and more. They’ve been slowly cutting out the US VFX houses and will continue to do so with Canada and the UK. It’s only natural that SLOWLY the VFX houses in China improve and take on more of the VFX work. While the cost of doing so will also rise - it still won’t be anything like the costs in the US, Canada and Britain. VFX houses in China and India will end up gaining more and more of the VFX business simply because their quality will improve and they won’t cost as much. If the studios don’t care about destroying American VFX houses, they certainly won’t care about doing the same in Canada and Britain in order to make more and more money.

I’m not saying this WILL happen, but IIMO it’s where it’s heading.


I’m usually the last to know anything. That’s why I have to ask these questions.

Out of interest, I do frequently see jobs posted for LA, Luma Pictures seem to post on the jobs board here, so I presume there still is some industry there?

Yes. We still have the Local 839 studios, at least two major video game studios (Blizzard, EA), and a number of VFX shops ranging in size from freelancers to larger entities (R&H, Digital Domain, Sony Imageworks). There’s also government/corporate visualization work going on here and there (ex: Jet Propulsion Laboratory). Los Angeles employs artists from all around the world.

However, things could change.


This is also my gut-reaction (but from another industry)… Because you do see people who handle “partners” differently.

With the same transaction framework you will have people who use it properly, and those who use it in an exploitative way.

I think I can understand now where guys like mrcain are coming from with how “It’s not too bad…” Yes things will kind of level out. But it’s people who are like De Faria and who are not like De Faria who will probably decide in specific cases if the leveling out globally is balanced or not.

Deciding whether or not you would want to allow your WB, Fox, Universal, or Sony Columbia to decide what happens in that scenario… is where one can make a decision about doing your own content. Again… the results of that would be very specific.

De Faria’s reaction (“What’s the problem?”) is also very typical of companies that do things properly most of the time. Learning that around their sphere there is all sorts of insanity going on sounds unreal to them.


I don’t think you disagree with either of us as a read of the entire discussion will probably attest :slight_smile:

Also costs of good VFX work in China are already getting high enough so that there is little to be gained by shipping non-roto/mm work here.


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