Visual FX shops to face tough times

By Paul Martin May 31st, 2001, in Miscellaneous

Visual FX shops to experience quiet times ahead? This is pretty bad news considering the surge in schools offering computer animation as a degree program. The amount of jobs in the industry will lower and the state of the economy won’t help the situation any. We can only hope and pray that the general public will take to effects heavy movies on a more regular basis.

Anyways, here is what MARC GRASER of Variety is reporting:

Hollywood’s creative communities may be relieved now that it appears labor peace is assured.

Yet there’s a forgotten victim in this strike-warped landscape: the post-production biz.

Even if an expected Screen Actors Guild settlement follows the Writers Guild accord, industryites forecast an unwanted calm after the perfect storm. The scarcity of work could last from winter through the beginning of summer.

In the first quarter of 2001, as SAG and WGA threatened walkouts, more than 80 films went into production, up from 35 in the same period of 2000.

Deadline pressure has been so fierce that facilities had adopted new tactics. In the sound biz, that has included completing looping and dialogue replacement during a film’s shoot, adding tens of thousands to a pic’s production budget.

A rapid slowdown could be disastrous for a biz already plagued by slim 7% profit margins.

The typical 18- to 22-week post production schedules — involving everything from digitizing dailies to developing and printing film — will still come after a pic’s 100-day shoot has been completed. So post houses are waiting eagerly for studio greenlighting machines to rev back up again toward the end of the year.

“The ramifications are delayed for the post-production industry because we’re post production,” says Patty Blau, senior veep of feature production at Industrial Light and Magic. “We come last in the filmmaking process.”

One of the hardest hit will be the f/x community, which will suffer for months before seeing more big-budget blockbusters greenlit. And even then, those pics will go to f/x powerhouses such as Industrial Light & Magic and Sony Pictures Imageworks, for example, or overseas to London shop the Mill.

This year, ILM is tackling its biggest slate ever, but creating visuals for “A.I. Artificial Intelligence,” “Harry Potter and the Sorcerer’s Stone,” “Jurassic Park 3,” “Pearl Harbor,” “Planet of the Apes,” “Star Wars, Episode II” and “Time Machine,” to name a few. But next year, the facility’s slate includes only “Minority Report” and some final shots for “Star Wars II.” It has little else (see accompanying chart, above).

Meanwhile Sony next year continues finishing major f/x sequences on “Spider-Man” and “Stuart Little 2,” after tackling this year’s “Charlie’s Angels,” “Harry Potter” and “What Lies Beneath.”

If large companies like ILM and Sony Imageworks are facing quieter times, what does that mean for the smaller f/x shops and boutiques?

Worst case scenario: a price war, massive layoffs, shutterings and a round of consolidations. The fallout could prompt the formation of another Liberty Livewire (the folding together of Todd-AO, Soundelux and Four Media Co., among other smaller shops) in an industry that was supposed to implode many times before.

“If the studios don’t have enough to keep the smaller shops afloat, it might be a major problem,” Blau says. “There are enough facilities that struggle. The amount of work you have can make or break you. This period could be extremely damaging to the smaller shops. It doesn’t help anybody.”

But companies aren’t going into panic mode just yet. Many predict that there may be enough work to go around. With tentpoles such as “Men in Black 2,” the next two installments of “The Matrix,” “The Incredible Hulk,” “Harry Potter” sequels and possible spillover shots from “The Lord of the Rings” trilogy still up for grabs, there may be enough work to stave off the dire predictions.

Other post-house execs see a future made up of work on lower-budget pics that still require post work. At least that’s the hope.

But there are already signs that less activity is expected in the lower-budget, independent film sector in spring 2002 than is normally on the production schedule during that season.

The effects of an actors strike could be harder felt in the area of sound editing than picture editing. Where the f/x biz can at least create shots without the need of a pic’s actors, sound editors are thespian-dependent.

And the long-term fallout from measures taken to soften the effect of a strike also is changing the dynamics of the biz.

With producers scrambling to meet SAG’s June 30 strike deadline, sound facilities aren’t experiencing their typical summer slowdown. Instead, they’re expected to feel the chill of spring and summer, along with their f/x counterparts.

For example, Skywalker Sound is booked solid through the holiday season, working on 12 films. But afterwards things are expected to quiet down tremendously.

“We’re feeling the pressure right now,” says Glenn Kiser, Skywalker general manager of Skywalker Sound. “Traditionally, this is our big period of time, but we’re 30% busier than normally.”

One headache is devoting time and resources to perfecting dailies, much of which will never make it off the cutting-room floor.

“Normally you want to wait as long as possible so you only work with the footage you’re going to use,” Kiser says. “Now, producers are overcovering themselves. We’re doing things that we never do.”

Those less likely to be affected are companies such as Laser Pacific and Liberty Livewire, which derive much of their revenues from the production of television shows. The safety net comes from the 2001-2002 TV season proceeding as planned in September, and TV production picking up again in July. But the future isn’t necessarily filled with storm clouds.

With all the prior rumblings about the potential strikes, post houses have kept themselves busy gearing up for the worst, cutting back on buying expensive equipment, hiring additional staff and deferring payments. Others have been building side businesses — launching DVD production arms, high-definition editing facilities and even their own film production arms, to make sure enough work exists to stay afloat.

“There was enough warning that something might happen,” says one high-level exec at a Hollywood-based post house. “It allowed us to look at cost issues to conserve resources and plan our lives and purchases around this impending event. We had enough of an opportunity to address this issue.”

Industryites are also left to study the effects of a strike that did happen.

Production houses are still reeling from the commercial actors strike last year. But even eight months after it ended, the ramifications are still being felt. While projects are again flooding facilities, major advertisers realized that they can lengthen the run of spots, requiring fewer production dollars during a souring economy.

And things could be worse. “The SAG strike could still happen and last a long time,” Blau says. “It was more stressful when the Writers Guild hadn’t come to an agreement with the producers, because if there had been a double strike, things could have been disastrous.”

Tags: , ,

Leave a Reply