April 15th, 2014
Dr. D James
VFX Studio Financial Difficulties and Woes of the VFX Artist
Rhythm and Hues was a well-known visual effects studio, has been around since 1987. This studio did the special effects for movies such as The Golden Compass, and more recently for the award-winning Life of Pi, which won an Oscar for it’s visual effects. This studio has had much success, but despite this the studio was forced to file bankruptcy only a couple of weeks prior to winning an Oscar. This signifies a red flag for the VFX industry as a whole. If a successful studio is able to fall under so easily, what will happen to the smaller, less successful studios? How is this affecting those working in the VFX industry? The VFX industry is struggling because of their poor business model which had led to heartache for studios and visual effects artists everywhere. In my analysis of the VFX industry, I have discovered that the financial difficulties of the studios have negatively affected worker’s lives and the lives of their families because of the unstable nature of the business.
VFX studios follow a fixed-bid business model. This means that they will bid on different projects for a certain amount and they will get no more or less for working on that project even if extra hours are spent on it. This means that VFX studios have to try to estimate how much it will cost them to make certain scenes in order to avoid losing substantial amounts of money. This sort of guessing-game is difficult to get right, especially if the director does not know what they want. In order to get an estimate without knowing exactly what the project entails, the VFX studio will have to multiply the amount of potential scenes by the potential length of the scenes and multiply that by the average amount it takes to produce similar scenes. If an estimate is off it could mean losing thousands upon thousands in revenue. There is also the issue of competition between studios. In order to win bids, studios may have to bid lower than they would like in order to get the job at all. Movie studios want to make their movies for the lowest price possible so they will often contract with the lowest bidding VFX studios. This fixed bid system makes it difficult for VFX studios to make decent sized profit margins, and sometimes VFX studios actually lose money on their deals.
In order to compensate for the lack of income, VFX studios have to cut jobs, which means many VFX artists will lose their jobs. The VFX artists who remain often have to work long hours in order to meet deadlines, sometimes even over 60 hours per week. The pay grade also isn’t what one would expect. On average in Los Angelos the average salary for a VFX worker is $89,000, which isn’t much given the living costs of the area and the amount of work done.(7 Curtin) Often times, these workers don’t have access to health insurance and are not paid over time, since they are not paid based on hours but on...