As many of you know, Rhythm & Hues, the company responsible for the incredible visual effects work in Life of Pi, filed for bankruptcy just weeks before the film took home multiple Academy Awards, including best visual effects. Outside of the theater, during the Oscars ceremony, hundreds of local VFX artists were protesting the dismal state of the industry. Matters only worsened when VFX Supervisor Bill Westenhofer's acceptance speech, in which he attempted to shed light on the financial troubles of Rhythm & Hues, was cut prematurely. Clearly the VFX industry was in a state of turmoil. Life After Pi, a short documentary focused on the downfall of Rhythm & Hues, looks to examine the underlying issues that are causing the VFX industry to become less and less economically viable.
This film is a segment from a larger upcoming documentary called Hollywood Ending that explores the many complex challenges facing the film industry in the United States. It was directed by Scott Leberecht, an employee of Rhythm & Hues, and it clocks in at half and hour. Here's Life After Pi in its entirety:
The issues that plagued Rhythm & Hues, and the majority of the Hollywood VFX industry, are twofold. The first issue has to do with tax subsidies from various local and foreign governments. Essentially, governments can choose to subsidize production costs for the studios, which in theory, creates jobs in that region. So for every production dollar spent in that locality, the production receives a portion back on their return. Currently, places like Vancouver and London offer the best production tax incentives, so naturally, the studios will go out of their way to shoot and post-produce films there. It's all about following the money.
Unfortunately, companies such as Rhythm & Hues are then forced to build new facilities in these subsidized regions if they want to win the major studio contracts. Not only is this wildly expensive, but because tax law is fluid, what might be the most cost-effective place to shoot one year might be a production desert the next year. This state of affairs means that visual effects artists have to effectively become migrant workers in order to survive.
Next is the issue of "fixed bidding," a system in which studios accept bids from competing visual effects companies for work on their major films. This system presents several problems for VFX companies. Firstly, for the local companies in LA, they often have to vastly underbid so that they can compete with the companies that are bidding in the areas with higher subsidies.
Also, due to the nature of the work itself, which is fluid and ever-changing, the visual effects of a major film can very easily go over time and over budget. After the initial funds from the studios are gone (funds which often aren't sufficient to begin with), the costs of finishing a project fall squarely on the VFX companies instead of the studios.
These two issues of tax subsidies and fixed bidding have created an atmosphere that is not only extremely cutthroat for the VFX companies, but it has made the business model of the VFX industry (which is largely dictated by the studios) an incredibly unsustainable one. It's definitely a sad state of affairs.
What do you guys think about Life After Pi and its dismal portrayal of an industry in turmoil? Can the VFX industry adapt to these practices and remain a profitable industry? Or do the studios have to adjust their business practices to make VFX a viable industry once again? Let us know down in the comments!