The 3 legged stool, a plan to save Visual Effects Studios

by jorgesanchez3d

Saving VFX

 The three legged stool, a plan to save Visual Effects Studios



In the middle of the Visual Effects crisis sometimes is hard to form an strategy to get out. Comprehensive solutions are sought but those usually require lots of time and compromise, which are the two things that are more scarce. Both Napoleon and Patton they both stated that any plan goes as far as the beginning of the battle at which time battles get a mind of their own.

 In the meantime we see visual effects studios falling down, houses underbidding, artists loosing their jobs and movies with heavy VFX content being filled with ketchup effects and flopping on the box office, in summary a complete meltdown. Because of the desperate situation, all actions seem to do little to actually solve something. There is a big movement to create a union that represents the artists and ensures a minimum job security, I think that creating an union is a great idea but I believe that it doesn’t solve the core problems of the visual effects industry.

That is where my plan goes, it is an idea for a visual effects industry to not only survive but also thrive without stopping doing what they love most. t is also to be doable now within the current state of the industry. This plan is mainly based on what I have read and watched on the auto industry, its enormous crash and its resurgence, particularly in the ideas of Bob Lutz former auto executive at GM, Ford, Chrysler, BMW and others. The other great influence -perhaps the greatest is what Steve Jobs did at Apple. In 1997, Apple was dead, by 2011 it was the most valuable company in the world. During an interview, Jobs described Apple as a 3 legged company: the Mac, the iPhone and the iPod (which was later replaced by the iPad, as the iPhone replaced most of the iPod’s purchases). So after combining everything that I learned by these two success stories I came up with a plan that is not based on numbers but on creating content. General Motors understood that in order to succeed they had to build the best cars that they could, and Apple rebuilt itself on creating the best electronic products in the world, they rightfully thought that if they built great stuff, the products will sell and money will come. They saw money as a byproduct of the product success. As a side note Apple has around 140 billion dollars in cash reserve, just saying…


Abstract of the current situation

As we see through the crisis, visual effects houses share a business model. Bid for jobs doing the visual effects in movies. Sometime ago a company backed by a cash filled owner decided to underbid the relatively stable business forcing competitors to also underbid their work in order to win the contracts. Then came the idea of settling satellite studios on countries were labor laws would allow cheaper costs. The idea was fueled by governments who see in the multi-billion film industry a way to make money and decided to create subsidies in order to attract those studios into their countries. And so a war of moving studios, jobs in limbo, underbidding, projects were VFX houses don’t get a dime for their work which results in artists working for free is destroying the industry. This is also seen in movies were the quality of visual effects is falling rapidly and could potentially break the whole movie industry.


The Plan, Own the Content.

The plan is because VFX houses transformed into providers no different to the company that rents the cameras, provides catering, or rents the film sets for a production. As such they are obliged to get the contract because otherwise they will disappear since its their sole income (for more on this read my first essay, It is also the fault of VFX studios). the solution to this is to get part of the profits that a movie makes. For example if a movie makes a profit of 500 million and the Visual Effects House gets 50 million of these profits and continue to get revenues from streaming/DVDs sales and rentals, an studio will have the financial capacity to risk working on a movie with a low bid. But that doesn’t happen and I don’t see studios wanting to share their money.

So of course, the solution is to make your own stuff. That means creating your own movies. That way your investment will return to you. This idea has been floating around many Visual Effects Houses for a long time. For a while there was a Frankenstein movie project on ILM, Weta toyed with doing a live action adaptation on Evangelion (a Japanese Manga and Anime series) and Digital Domain was preparing an animated movie before its collapse.  As far as I know, the only big project that came from a Visual Effects Studio was ILM’s Rango (2011), which did OK. However, everything changed at Lucasfilm now that they are part of Disney; that totally changes the equation for them.

Creating content has its problems, the biggest one being the cost of making a movie. Here a studio has to find investors, put a lot of time and people, get a distribution deal and then hope for the best. Even if its’ a small project completely made in-house, it is an enormous gamble for a small company (which Visual Effects Houses are) with shallow pockets. Another proposed solution is to make animated movies, like Pixar did who abandoned VFX and focused on animation but they had the pockets of a guy named Steve Jobs who saw the future and provided the economic backing for the company to transform. That luxury does not exist anymore.


1st Leg.  Make your own content.

What I propose is a plan to create content in small steps without letting go of potentially money making derivatives of the core product. My idea centers in animation but that is because it is what I love the most, but it doesn’t mean its the only way.

A. Get an idea for a story or better yet a set up a world where stories happen (like the idea of a sitcom or TV drama). Develop the core of the idea.

B. Create an All Star Cast. You might say this animation project. Well a big problem with animation, visual effects and video games are having is that their characters all look the same. You want to make a story successful, you have to cast appealing characters and today very few animation, games and CG show them. Just as actors with charisma and that x factor succeed where others do not, characters should also have them. Just remember the classic Disney movies. Until this day, Snow White continues to produce money for them thanks in big part to their iconoclastic characters.

C. Do not begin with trying to make a movie, start small. Create 5-minute short stories with your characters. They are long enough to say something without using all of your resources. Risks are minimal.

D. Use new media to market your new show. I can think of the self-called Nerd community and all of their sites to promote your content. You do not need lots of people just a couple if very savvy PR workers who know their stuff and have lots of imagination. BTW, make those shorts free.  If your idea does not pan out, start a new series. Learn from Network TV, something does not work cut it and start all over. The advantage that you have is that you are filled with a gigantic amount of artists and talented people and a lot of them can bring up new stuff. Their pay for the extra work, if the idea succeeds they can become producers of the show and get a par of the profits.

E. Now, if your ‘series’ is successful and goes viral, start to look for ways to expand and distributing. Plan a season of the standard 20 minutes show. You can sell it through iTunes, Amazon, Netflix or perhaps you have created interest in a big studio and they offer a deal to put the show on a channel (Disney Channel, Cartoon Network, etc.). but no matter what, learn from George Lucas and keep owning the rights to the content in other media, specially the rights to its interactive content.


2nd Leg. Develop interactive content.

A.Fucking Innovate! Do not copy every game you play or think its popular. You will not create a more realistic shooter than the big guys. Dare to play around, Shigeru Miyammoto creator of Mario explains that all his games are based on playing in a garden, a very magical and crazy garden. Look for inspiration elsewhere. Do not use other games and comics as your sole inspiration. Look in art, nature, science, music. Other places where most people do not look and connect the dots in ways that other have not seen. Remember that focus groups are useless because most of the time people do not know what they want (just ask my ex!). Show them instead of the other way around!

B. What I mean develop your stuff is actually develop your game inside out. Since skills are almost the same between a game developer and a VFX guy, it is very easy to assign people to the project. As with the videos, do not pay Microsoft Nintendo or Sony a gigantic amount of money to develop a console game. Pay Apple a hundred dollars and release your game for iPhone and iPad. The advantage of this is that you will be working on the most popular platform out there with the whole infrastructure there for you. If you know how to get the word about your product, (read 1D) you can make a lot of money.

C. Learn more from George Lucas and milk that cow until the very end, but have a new ‘Franchise’ ready to go after. Just remember that what gets you money is by owning the stuff. Learn from Apple and Lucasfilm, vertical integration seems so old economy but it has worked for them and have make them more money than what you can imagine in your head. Lucasfilm was sold for 4 billion dollars that is more money than all of the VFX houses combined.


3rd. Leg. Visual Effects.

Of course, if you invent the next Spiderman series, you will be making a movie and since you own the rights, you are producing it and making the VFX and thus all the money from the Box Office. Until that happens though, here is what I propose.

A. Get more involve in the movie that it try to get part of the art direction to be done by you. Dare to present your artistic ideas to the director based on your experience. Just remember what happened with Jurassic Park when Spielberg saw the work made by Williams and Dipée. You would not be here if t wasn’t for them.

B. Learn to sell yourself. Like a wrote in my old essay, It is also the fault of the VFX Houses you are seen as a service provider of technical stuff that can be hired anywhere for less money. However if you sell yourselves as artists and your contribution as equivalent of actors, designer and so on, you will be more respected by directors, actors and other colleagues which…

C. Will make you powerful friends, wouldn’t it be nice that the cause of VFX was promoted by George Clooney, Ron Howard, etc? How about actors and other unions pushing studios to only work with VFX houses that a, are not technicians but artists and b, have a worldwide union that is friends with SAG, Writers Guild, etc. That will make a difference in being able to negotiate better contracts for movies.



So in the end your VFX studio will have 3 sources of revenue, two of which you completely own. In addition, there will be tons of extras such as merchandise; publicity deals and a following that will help you get through if one of the legs falters from time to time. You can grow knowing that all the people you train will be with you and thus not having to give them all to your competition after all of your hard work. Owning your destiny will means that you can choose projects that make financial sense so you won’t have to be in a perpetual bidding war with subsidies and studios in places where workers have no rights. In addition, you will give your employees extra incentives. You give them a path into a directorial or producing career that can take them into the major leagues. This also means that you will attract more talented people into your house, which in turn assures you a broader specter of ideas.

With the way things are now, I do not believe that there is anything to loose from carrying out this plan. Going as you are, will most likely bring you to a collapse sooner than later. It will also protect you from the 200 million dollar movie destruction that so many people are predicting. All in all this is like asking a girl or guy out, you never know what you are missing into you try!


Thank you for your attention


Jorge Sanchez – 3d Artist