UK VFX going above and beyond

Screen Daily

UK facilities have grown on the back of rising demand for visual effects but pressure to meet deadlines is impacting business models and employees.

http://www.screendaily.com/features/uk-vfx-industry-going-above-and-beyond/5099978.article?blocktitle=Features&contentID=1423

As the complexity and scale of visual effects productions has rocketed, VFX post production shops have morphed from cottage industry to multi-national enterprise.

As a gauge, the films which ushered in the era of computer generated imagery, Terminator 2: Judgement Day (1991) and Jurassic Park (1993), each contained around 50 VFX shots. By comparison, 2009's Terminator Salvation used 1250 shots, and 2015's top performing release Jurassic World boasted 2000.

These volumes are becoming routine and in a decade will likely look as insignificant as those from movies of the 1990s.

“Six years ago a large production would carry maybe 1200 shots. Now these are regularly at 2000,” says Fiona Walkinshaw, joint MD, Film, Framestore. “That's a lot of work and data to generate so companies like us need scale even to win partial awards.”

Framestore was founded at the dawn of CGI in 1986 and now spans the Atlantic with 1000 people in London, New York, LA and Montreal.

Double Negative started out as a boutique in 1998 with 30 staff, before merging with Prime Focus World’s creative services subsidiary in June 2014 to create the world's largest visual effects company with around 4,500 employees.

Recently the sector has undergone further consolidation. In July, Cinesite acquired Vancouver’s Image Engine, contributor of shots for Jurassic World; and Technicolor, owner of MPC, paid £190 million ($290m) in September for shortform VFX giant, The Mill.

Cinesite's strategy began with the opening of a animation studio in Montreal in mid-2014, creating 250 jobs and raising its global headcount over 400.

“When you are a mid-range company, as Cinesite was, you are a half-way house where you are not necessarily considered for the really big tentpole movies yet you are too large for those with smaller budgets,” explains MD Antony Hunt.

“With a footprint in Vancouver, Montreal and London we have close to 800 people and we can ramp up production to meet larger VFX tenders,” he says. “There are cost savings too in using similar software tools and pipelines without having to outlay huge new expenditure on equipment.”

The demand for VFX shows no signs of stopping. The top twenty highest grossing films are consistently dominated by VFX-heavy titles. Among them last year: The Hunger Games: Mockingjay - Part 2; Ant Man; Furious 7 and Avengers Age of Ultron.

Marvel's Ultron featured more than 3000 VFX shots, the most for any studio release, yet its in-production titles Dr Strange and Guardians of the Galaxy 2 (the original contained 2750 shots) could soon eclipse it.

VFX software and skills are increasingly integral to many productions outside of summer releases. Cinesite created 138 photoreal environment shots for The Revenant, for example, and Warner Bros. tasked Framestore with completing digital jungle and forests for Jungle Book: Origins to save the expensive of sending a large crew on location to Argentina.

It is rare for a studio to entrust this size of work to a single vendor, (Ultron, for example, featured the work of 12 VFX houses), instead booking multiple shops to achieve not just scale but access to financial rebates.

Dneg's tie-up with Prime Focus gave it overnight access to productions seeking to tap the highly attractive tax credits of Vancouver, where PF had a division.

Canadian cities have been competing with each other to provide the most enticing incentives, luring productions like The Lego Movie sequel from Hollywood. British Colombia has been most aggressive, offering a 17.5% specific digital animation, and VFX rebate on top of the Canadian government's 33% film and TV production credits. Sony Pictures Imageworks relocated to Vancouver from Culver City while ILM, Digital Domain, Cinesite and MPC operate there.

In contrast the UK offers 25% tax relief, boosted last April when the qualification to receive it was reduced to 10% of total production budget.

“We can't control where a studio will go but since all [rival facilities] bid on the same work that means having a foot in key markets,” says Hunt. “A production might shoot 80% physical work in the UK to maximise tax breaks but post produce in Canada to gain financial advantage there.”

“Scale is important if you have severe deadlines and you know they can throw people at it, but talent, reputation, cost and availability are equally valid criteria,” says visual effects producer Barrie Hemsley, who assigned VFX sequences for The Martian to facilities including ILM, MPC and Framestore.

“Having access to rebates may help you get the job done for the money, but a smaller facility specialising in a certain skillset is also worth considering.”

Profit margins are under pressure regardless of size, but as facilities expand, the pressure to win work and pay high numbers of salaried staff rises. “Wages are 50 percent of overheads,” reports Lucy Ainsworth-Taylor, MD and founder, Bluebolt which employs 65 artists. “They all have to be working. We cannot afford to carry any dead wood.”

Facilities must also continually update their software and storage systems. UK vendors also bear the burden of Soho's sky high rent.

“You need to be near the post houses doing DI (Digital Intermediate) so you have to be in Soho,” says Ainsworth-Taylor. “But how do you offer value for money with enormous overheads and crippling rent?”

Ainsworth-Taylor intends to keep Bluebolt operating 50/50 between film and TV VFX and to select projects that allows her to maintain the company at its current size.

“The cost, complexity and scale required of post houses for tentpole movies is huge and post production deadlines so narrow that you need big resources to push them through,” agrees Hunt. “The post period is so compressed that studios don't tend to put 1000 shots through one facility. Because of the pressure on post they spread the load accordingly.”

The VFX industry learnt a lesson following the collapse of prestigious LA facility Rhythm & Hues in 2013 after it overstretched itself financially on production of Life of Pi.

“You have to know how to run VFX as a business and you've also go to know when to stand up to a client,” says Ainsworth-Taylor. “Never agree to a deal without checking that everything can be achieved on time or without anticipating last minute changes.”

“The business is very pressurised, driven by deadlines and client's changing their minds at the last minute,” agrees Framestore's Walkinshaw. “The director and the studio are always pushing for what they believe is the best possible cut and VFX can only respond to that. It's always a negotiation but hopefully, after having worked with a client for a year, you can work it through.”

Manning divisions in different time zones, often with less expensive labour, can enable a VFX facility to operate around the clock. MPC has an outpost in Bangalore and Dneg recently established a shop in Mumbai (it already has a facility in Singapore) with work on The Huntsman: Winter's War for Universal inked in there.

“A number of VFX facilities have not run their business well,” asserts Tim Sarnoff, president production services and deputy CEO at Technicolor. “They have fooled people into thinking they can produce good work at less than cost, and it squeezes those of us who know that you can’t maintain a healthy business by slashing budgets. Our philosophy is to create the highest-quality content and we believe that comes with a premium.”

There are concerns that deadline pressures can knock-on to staff, particularly in unpaid overtime. Broadcast and cinema union BECTU launched a campaign targeting this in September and says membership has “rocketed” as a result.

“Our members don’t believe their management are managing them well,” says Paul Evans, BECTU national officer. “Hundreds have joined which is a sign of the strength of feeling.”

BECTU has amassed the 50% of workforce (around 65 members) it says it needs to solicit trade-union recognition at MPC's compositing department. That would mean that legally BECTU could bargain collectively on behalf of those employees on overtime pay.

Evans says membership is rising at facilities including Framestore and Double Negative which could lead to demand for recognition.

“Studios are aware that their actions have consequences but they are not looking to sting people out of pay,” says Hemsley. “They do expect to get what they paid for, in time and at the right quality and they will demand changes to perfect the picture. The problem is that those doing the work will inevitably suffer from unrealistic deadlines. No one is ever asked not to work late to change a shot – they just want to know if it is possible. Ultimately, it is the responsibility of vendors in post to manage this.”

Box this: Facilities seek production stake

UK VFX facilities are diversifying as a strategy for growth, some identifying development of their own IP as a business opportunity.

Cinesite, Double Negative and Framestore have launched animation wings with mixed results. Framestore Feature Animation co-produced The Tale of Despereaux for Universal in 2008 but have not followed this up. Framestore's Wilkinshaw suggest the company's IP lies in projects like Light Box, the LED-lit studio it designed with cinematographer Emmanuel Lubezki to make Gravity.

In April 2014 Dneg simultaneously launched a feature film and feature animation arm. The former was billed as providing VFX support and investment to British-qualifying productions in the £2-10m range in partnership with Apollo Productions. The latter, Locksmith Animation, was described as the UK’s first dedicated high-end CG feature animation studio and backed by Elizabeth Murdoch with former Aardman creative director Sarah Smith at the helm. Neither has announced any projects.

Family skewed Charming, due this year, is the first fruit of a production pact between Cinesite and Shrek producer John Williams' 3QU Media, produced out of Cinesite's Montreal studio.

“This is an important step in Cinesite’s strategy to develop our own creative intellectual property and a slate of original animated films,” says Hunt.

Technicolor is putting its weight behind virtual reality. Its acquisition of The Mill capped a 18-month spending spree in which it bought Toronto film and TV VFX outfit Mr X and Paris animation and VFX specialist Mikros Image.

“No matter how big everyone thinks VR will be is, we believe it will be bigger and VR is exactly the type of business that Technicolor excels in," declares Sarnoff. “The Mill acquisition enables our Research and Innovation teams to lead the industry in the new demands of compelling storytelling.”