“I think the only possibility of survival for (VFX) facilities is to be a content producer,” asserted VFX industry vet Scott Ross, during his keynote address Tuesday at the Society of Motion Picture Engineers Technical Conference and Exhibition at the Renaissance Hollywood Hotel.

Ross — who is a co-founder and former CEO of Digital Domain and served as the general manager of George Lucas’ Industrial Light + Magic and as senior vp of LucasArts — attracted a standing room only crowd as he shared some frank talk about the dire state of the visual effects business.

Ross looked back at the formation of VFX and computer animation facilities, and how the business has led to the
demise of so many of them. Said Ross: “Studios continue to ask for lower prices, higher quality, and more work in shorter periods of time.” 

The Visual Effects Society -- which has been aiming to raises awareness of the current state of affairs--suggests that this business climate is contributing to problems in areas such as working conditions, facility profit margins, overtime, credits, and change fees.

Ross pointed out that even models that work today might change. “Weta is doing really well — as long as Peter Jackson continues to make movies,” Ross said. “In my humble opinion, when Peter stops making those movies … I predict at some point they will face some
problems as well, even though they won multiple Academy Awards.”

With many countries now offering financial incentives, Ross noted that US companies are at a particular disadvantage at a time when outsourcing has become a common practice. “(US)
facility owners are looking for ways to pull their heads above water so they
too are opening facilities where there are tax credits, subsidies or a lower
cost of labor. … To me, doing that is swimming to the bottom.”

Highlighting the role of VFX, Ross noted that VFX and/or computer animation has played key roles in the top 40 films of all time—which he pointed out is a more consistent record than that of any movie star or director. “If these companies continue to go out of business,
who is making the money (from these movies)? VFX companies sure are not.”

Citing businesses such as Pixar Animation Studios and Blue Sky Studios, he suggested that many of the companies that are successful have distribution, marketing, licensing and content ownership.

As to the current state of the VFX business, Ross suggested that the industry might be helped by the formation of a trade association that could set industry wide standards and practices.

While the subject of unions have been discussed in the community, Ross pointed out that it might serve to drive more work offshore. “The problem is we are looking at competing in places where there are no unions. But if (a union) increase the cost of doing business and
increases cost to the facilities, who is going to bear that cost? I will tell
you that the motion picture studios, in my opinion, will not. They are trying
to maximize profitability.”

The Visual Effects Society — which doesn’t have collective bargaining power — recently released a VES Bill of Rights and aims to prompt industry discussion that it hopes will lead to
addressing its concerns.

Source: Hollywood Reporter