The Visual Effects Industry

In 2015, the six movies that took in the most money worldwide were Star Wars: The Force Awakens, Jurassic World, Furious 7, Avengers: Age of Ultron, Minions, and Spectre. Each movie was an entry into an existing franchise and—with the exception of Minions—each movie cost at least $150 million to produce and required extensive visual effects work.

As studios become growingly reliant on “tentpole” films and extended universes with enormous visual spectacle, the visual effects industry has taken on an incredibly important role in Hollywood. And yet headlines like this one keep popping up:

Rhythm and Hues was an independent visual effects studio with a staff of over five hundred people. And their problem wasn’t that they had a lack of high-profile clients or were producing sub-par work. One of their last projects was The Life of Pi, for which they did virtually all of the visual effects work. It was a film that was almost entirely digital. It was primarily shot in front of a green screen, and a main character (the tiger, Richard Parker) was a computer-generated visual effect.

Rhythm and Hues actually won the best visual effects oscar several weeks after it announced its own bankruptcy. The acceptance speech is cringeworthy.

I’m not sure whose idea it was to play the Jaws theme for that musical interstitial, but it’s pretty damn fitting because the movie industry killed Rhythm and Hues. They also killed a number of other independent visual effects firms.

It’s a weird situation because the movie industry also supplied Rhythm and Hues with a stream of work every year. The problem was forced competition from other firms both inside and, more woundingly, outside of the United States. Sometime in the last two decades, the studios invented a system whereby they took advantage of the huge number of visual effects firms (about 500) and let the studios underbid each other for work. This was especially tough for US companies who were competing with firms in countries with lower wages and far more government subsidies for film work. As a result, even Rhythm and Hues—a huge visual effects firm—made an incredibly slim profit margin. When they received a comparatively smaller number of films after Life of Pi, they were crippled by debt and had to close their operations in the US.

There have been a lot of propositions about how to help fix this situation, including prompting the government to create subsidies for visual effects. Still, this is difficult. The visual effects industry’s only representation is the Visual Effects Society. There is no union, and in fact, unionization could harm independent visual effects firms in the short term. Additionally, government subsidies could not dissuade studios from looking for work in countries with far lower wages, like India and China (Curtin and Vanderhoef).

There are still major visual effects companies in the United States that are going strong, like ILM and Sony Pictures Imageworks. It’s important to note though that ILM is owned by Disney and Imageworks is owned by Sony. They can afford fluctuations in income. For companies like Rhythm and Hues, vying for studio money can actually weaken and break them.

For more info, please look at: 

Curtin, Michael, and John Vanderhoef. “A Vanishing Piece of the Pi The Globalization of Visual Effects Labor.”      Television & New Media 16.3 (2015): 219–239. tvn.sagepub.com.libproxy2.usc.edu. Web.