The VFX industry is trapped in a downward spiral

Wining the 2013 Oscar for best visual effects should have been a highlight of Bill Westenhofer’s career. Instead, the special effects supervisor for Life of Pi was infamously played off stage.

His crime? Using the platform to bring up the dire state of the VFX industry.

“Visual effects is not just a commodity that’s being done by people pushing buttons,” Westenhofer said backstage later that night. “We’re artists, and if we don’t find a way to fix the business model, we start to lose the artistry.”

Life of Pi director Ang Lee later said he wished VFX was “cheaper.”

Just days before winning cinema's most prestigious award, the studio where Westenhofer worked, Rhythm & Hues, filed for bankruptcy. The short documentary Life After Pi, which details the demise, claims over 20 VFX vendors closed or filed for bankruptcy in the decade prior to Life of Pi’s release.

They’re still closing today.

After working on the almost-billion-dollar hit Bohemian Rhapsody, London VFX vendor Halo went under in 2019, leaving four freelancers owed $70,500. The same year, Moving Picture Company's Vancouver office was shuttered not long after pulling out all the stops to redesign the animated hero of Sonic the Hedgehog in response to the widespread derision that met the original trailer. And Technicolor, the century-old motion picture processing company, filed for bankruptcy in 2020.

How could so many high-profile companies regularly working on movies that bring in billions of dollars fail? It’s simple: the VFX industry, engaged in a lose-lose race to the bottom, is fundamentally broken.

Even as a series of recent mergers and acquisitions inject a glimmer of hope into the VFX business, its workers are still struggling to get by — let alone produce great work. Speaking to Inverse, four visual effects veterans describe an industry marred by brutal deadlines, slashed budgets, mass layoffs, and industry-wide burnout.

“Maybe they just don’t get it”

Todd Sheridan Perry has seen this all before.

A freelance VFX supervisor with the looks of Patton Oswalt and the voice of a mild-mannered science teacher, Perry got his start in 1997 on a film you’ve probably never heard of called The Midas Touch. Since then, he’s worked on everything from Michael Mann’s Public Enemies and the Wachowskis’ Speed Racer to Marvel juggernauts like Doctor Strange and Black Panther.

He’s seen the industry go through ups and downs. Now, after surviving one of the worst eras in VFX history, Perry remains cautiously optimistic as struggling special effects studios get bought up by deep-pocketed internet companies like Netflix.

‘They’re a new player,” Perry says about Netflix. “They weren’t around for the last time the industry went through this. Maybe they just don’t get it.”

The VFX industry has been in trouble for a very long time.

In November 2021, Netflix bought Scanline, the German VFX outfit behind Stranger Things, Cowboy Bebop, and various superhero movies from Marvel and DC. That same month, Unity Technologies (maker of the ubiquitous Unity game engine) announced plans to acquire Weta Digital, the iconic VFX company co-founded by Peter Jackson.

The industry has gone through multiple phases where big studios buy up smaller VFX companies, and the only reason Perry thinks Netflix would want to own a VFX studio is bragging rights.

“It looks good on the surface,” he says, “but Netflix creates so much content, Scanline isn’t big enough to handle the workload. Netflix could keep Scanline busy for as long as they want to, but they’re not saving money doing it.”

But for Perry, even Netflix cash reserves may not be enough to fix his industry. Because there’s no doubt the VFX industry has been in trouble for a very long time.

Making Black Panther

1993’s Jurassic Park had 63 VFX shots. In 1997, Starship Troopers made headlines for having almost 500. Today’s blockbusters routinely have over 2,000 VFX shots — and far less time to complete them.

“Jurassic Park was in postproduction for three years, with seven months for principal photography,” Perry says. “Now we have shows with thousands of VFX shots and they need to be done in six months."

The pressure comes from the top. "It falls squarely on the shoulders of studios that set a release date and then work backward from there,” Perry says. “The time isn’t enough to live up to the ambition of the project."

Nowhere is this more obvious than the climactic set piece of Marvel's Black Panther. While the film was critically acclaimed, fans and critics found the final battle’s VFX decidedly shoddy, particularly a fight scene between T’Challah (Chadwick Boseman) and Killmonger (Michael B. Jordan) in the vibranium mines beneath Wakanda.

Despite having worked on those special effects, Perry agrees they were lacking.

“It does fail at some point,” he says.

So what happened? The short answer is that a late studio decision created too much work for the predetermined deadline.

“There were multiple things going on in act three,” Perry says. “There’s Black Panther and Killmonger mano a mano. There's a vehicle chase through the canyons. There's a big battle on the fields above.”

However, he also refutes claims that the sequence was completed in just six weeks. “The Black Panther/Killmonger fight was always planned and had been through previz, but the tribal battle up above didn't feel big enough. Marvel said they wanted it to be epic like there were hundreds of people fighting.”

Method Studio, where Perry was working at the time, had been assigned both the vibranium mine fight and the Wakanda plains battle. More resources put towards the latter meant less for the former.

“Marvel and Method had a meeting and they said, ‘We think you have too much work,’” Perry recalls. He and his team agreed, and the answer was to assign the remaining work for the mine battle to another studio, DNEG.

“The time isn’t enough to live up to the ambition of the project."

The only problem? The different software each company uses meant sharing CGI environments or character rigs “isn’t a trivial task.”

Functions that are handled differently between computer and software systems had to be reprogrammed at DNEG, and Perry says the studio had to catch up from scratch in “weeks or day.”

“We'd already done tons of development work on the vibranium mines and it all had to be packaged up and sent over to DNEG,” he says. “Even if you're in the same company and sending it to a different department, packaging all that up and having it work requires a lot of elbow grease.”

"DNEG didn't have the time to polish their shots as much as other companies who'd been working on the film for seven or eight months, and they were caught at a disadvantage. I'm not saying DNEG is a bad company – they have a closet full of Oscars. They thankfully took it on and it actually got done. We wouldn't have been able to accomplish it otherwise."

Avoiding the next Cats

If there’s one person who saw this problem coming, it’s probably Kerry Conran. Conran wrote and directed ​​2004’s Sky Captain and the World of Tomorrow, the first Hollywood movie where almost everything besides the actors was animated using special effects. 18 years later, he has a pretty pessimistic view of the industry he helped build up.

“It’s that cliche: Fast, cheap, and good. Pick two,” Conran tells Inverse. “Productions expect you to deliver on all three, but that doesn't exist."

You can probably guess where Black Panther falls in that Venn diagram, but as rough as the Marvel movie’s climactic scrap was, it wasn’t enough to detract from the movie’s success.

“Most people have no idea they're watching VFX.”

However, we've already seen the results when the race to the bottom literally breaks a movie.

“The worst example is Cats,” Conran says. "Cats didn't just suffer from bad CG, but missing CG. And it’s for all the reasons we've talked about."

Such visible failures are rare. The VFX industry has a seemingly endless ability to absorb unplanned work.

“Vendors today definitely have their share of misfires, but 80 percent of the time they deliver miracles under very adverse conditions,” Conran says. “Most people have no idea they're watching VFX.”

“The type of stuff we do all the time is almost imperceptible,” agrees Perry, noting that Parasite and Little Women have “absolutely invisible” VFX work.

The industry’s just-in-time culture has left Conran surprised the worst doesn't happen more often. “Even the Marvel films, which have all the resources in the world, play this dangerous game. Avengers: Endgame had 1,000 VFX shots delivered one week before the film was in theaters.”

For Keith Goldfarb, founder and former creative director of Life of Pi VFX company Rhythm & Hues, the ultimate arbiter is what moviegoers will accept.

“As long as the finished results are good enough, there'll be no incentive to change,” he says. “The income from these movies goes far beyond the box office. They’re part of a huge ecosystem of merchandise, spinoff material, and theme park revenue. To what degree does the quality of the CG impact these markets? If the answer's not much, there's no reason for the studios to change anything.”

“Or worse, a VFX artist will die driving home after working 48 hours straight to meet an unreasonable deadline.”

Perry sees a couple of worst-case scenarios that might force a change. “If a Dune or a Star Wars doesn't come out on its release date and a studio loses a potential $500 million opening weekend because the film is pushed to compete with another $500 million movie, Hollywood will be blanketed with lawsuits.”

“Or worse, a VFX artist will die driving home after working 48 hours straight to meet an unreasonable deadline.”

Perry says he and his colleagues all know someone who’s dozed off driving home after a long day. And he says he and his team have continued to work crushing deadlines even after a movie’s premiere to finish shots for further rollout.

“We'll fix it in post”

Even though ideas change throughout production, the deadline rarely does. This leads to a major issue in the VFX industry known as scope creep.

“It’s not uncommon for vendors to work on shots for weeks or months, only to have those thrown out when a production changes their mind,” Rhythm & Hues founder Keith Goldfarb says. “When that happens, the production rarely accounts for money or time, they just expect the changes in half the time.”

Perry says a good VFX vendor will try to get approvals at each stage. “Animation is time-consuming and subjective. The client must sign off before moving forward because so many things depend on it, like the way hair or cloth moves with the character once the shape and form is agreed upon. You want what you're doing to match what's in the director's head.”

“If we make it green, we can replace it with anything, right?

But by the time a producer or test audience prompts a change that needs new animation, the VFX departments may have already moved forward and incurred costs on work that all gets thrown out. And because VFX jobs are paid for with flat rates, the extra work isn’t covered. Perry says some clients either don’t understand this workflow or intentionally take advantage of it.

Whether daylight’s vanishing or a costume isn’t photographing right, a director throwing their hands in the air and declaring “We'll fix it in post” has become a cliche. But the VFX vendor has already submitted a bid so all the little problems pushed down the line add to a workload that hasn’t been budgeted.

The costliest mindset is indecision, Perry says. “What does this building look like? I dunno, we'll figure it out later, that's why we have greenscreens. Is the character's cape red or blue? We never got around to figuring that out — if we make it green, we can replace it with anything, right?”

VFX has both the means and curse of being able to fix everything.

International competition

If you’ve ever wondered why Marvel films everything in Atlanta or so many TV shows shoot in Toronto, the reason is simple: local governments pay a significant chunk of the production budget, creating tourist attractions and jobs that look good come election time. The same goes for VFX, but once again, this industry gets shafted.

Governments offer rebates on VFX providers to set up shop, and artists upend their lives and families by moving across the world for work. But it can all go wrong fast. Savings trump loyalty, and if a bureaucrat in another government offers a better rebate, your formerly thriving VFX hub can become a ghost town overnight.

That’s what happened in Canada. Aggressive rebates from Quebec caused a shift from the traditional VFX market of Vancouver to Montreal. The Moving Picture Company laid off its employees, allegedly blaming “increasing external market pressures in Vancouver and more attractive opportunities in other locations” in an anonymously leaked letter.

A related issue is the international nature of VFX work. Facilities are found worldwide, including in cities where workers are much cheaper and have fewer rights. According to Perry, that’s actually a feature of the industry, not a bug.

“We bid lower and lower to get the job, then find our burn rate is higher than the budget,” he says. “This is exactly why companies open up facilities overseas – they have to in order to compete.”

Is it time to reboot Hollywood?

So what's the solution? How do you balance financial realities with the vagaries of the creative process? As Rhythm & Hues showed, cash flow is the biggest problem. Any business with thin margins needs constant new work.

Clients paying on time would be a start. Vendors often don't see any money until months after a job is completed and have little leverage to encourage quicker payments. Walt Jones, formerly a VFX Supervisor at Rhythm & Hues, says he’s spent over a year chasing money on some projects.

But unleashing lawyers only “burns bridges with the client and costs money most VFX vendors don't have,” Jones says. “You may spend more in legal fees chasing the final payment than it’s actually worth. Even then, most shops survive on a handful of clients, and losing one could mean the end of the company.”

Can the fixed bid system be replaced with rates based on the amount of work completed?

“You can certainly try,” says Rhythm & Hues founder Keith Goldfarb with a wry smile. “Good luck getting the studios to agree!” If VFX companies charged per megabyte or held back work in lieu of payment, most producers would find countless competitors who would adhere to the status quo, he says.

“VFX is still too mystical, too much of a black box.”

The recent threat of a strike by stage employees raised questions of VFX unionization, but everyone Inverse spoke to agrees it wouldn’t help this industry. The international nature of the business, which includes countries where unionization is difficult or even illegal, would make it impossible to establish and adhere to global standards. And the crippling and unrealistic pressure tends to come from the clients, not the companies themselves.

All of which means that while things are amicable inside VFX companies, it’s the squeeze on cost, time, and quality imposed from upstream that’s stretching the industry and its artists to a breaking point. There’s no magic solution — not even Netflix’s deep pockets — but a good first step would be for producers and directors to take the time to understand the art form.

“VFX is still too mystical, too much of a black box,” Jones says. “A key component of my process has been getting directors and producers up to speed on the minutiae of everything we do. It’s about getting everyone together as a creative team, having responsibility in the process, and knowing that we're all in this together. There has to be mutual trust for everyone to make the best film possible.”