back to article Why are all the visual special effects studios going bust?

An interesting read popped up on Motherboard recently: if all and every movie now uses ever more visual effects, then why the heck are all the visual effects (VFX) studios going bust? The answer given was apparently that Avatar didn't win the right Oscars. This is both amusing and wrong. The actual answer is that this is how …

  1. Doctor Syntax Silver badge

    there's plenty of people willing to see ads

    Spot the wrong word.

    1. FartingHippo
      Headmaster

      Re: there's plenty of people willing to see ads

      there's

      What do I win?

      1. Anonymous Coward
        Thumb Down

        Re: there's plenty of people willing to see ads

        there's plenty of people willing to see ads

        I don't think that's true at all.

        I reckon if the corporations behind most brands really understood how at best people don't care about any of their ads, and how at worst, consumers actively dislike ads then there would be mass panic and a large number of people who have fooled their employers that they really do 'add value' will be exposed as the parasites they really are.

        There's too much money and inertia at stake to ever let that happen. So marketers keep fooling themselves, and people who pay for marketing keep fooling themselves, although I expect the clever and self-aware ones know just how pointless and ineffectual the vast majority of advertising really is. Still they all believe they're 'fooling the public'. They aren't: we just don't care enough to disabuse them of their ingrained idiocy and mental blindness.

        1. Stella Duvel

          Re: there's plenty of people willing to see ads

          Isn't this in part the Law of Hidden Competence coming up?

          "As I don't work in discipline 'X' it looks to me as if they are incompetent"

          Whereas from inside, they do know what they're doing (see, Accountancy for examples)

          1. ratfox Silver badge
            Paris Hilton

            Re: there's plenty of people willing to see ads

            The surprising thing is that considering Google mostly only makes money when somebody clicks on an ad, and since Google makes money hand over fist, then indeed there must be plenty of people willing, not only to see, but also to click on ads.

            No, I don't know who these people are either.

            1. Hans 1 Silver badge
              Happy

              Re: there's plenty of people willing to see ads

              I am one, I like clicking on ads for companies or services which I truly dislike, such as Microsoft, or our competitors. I then know they pay google/theregister/whoever (depending on which site I am on).

              So that is one of those.

              PS: No I do not care about the actual ads.

              1. Stu 18

                Re: there's plenty of people willing to see ads

                Awesome, you bring your mighty resources down to punish and hurt that evil company a mighty $1 or less at a time.

                How many of these can you get through in an hour? Has their stock price been influenced yet?

            2. Vic

              Re: there's plenty of people willing to see ads

              there must be plenty of people willing, not only to see, but also to click on ads.

              I've clicked on quite a few ads.

              I have a rather faulty touchpad on this laptop. Accidental clicks are not uncommon :-(

              Vic.

        2. Vic

          Re: there's plenty of people willing to see ads

          at best people don't care about any of their ads

          For many products, that's not true. Soap powder manufacturers learnt long ago that sales were directly proportional to exposure. That just is the case - however much we'd like it not to be.

          I suspect there are certain ads that are a massive turn-off, though - the old Intel "bong bing bong bing" in every fucking advert that mentioned their processors was exceptionally jarring, and I actually went out of my way not to buy Intel just ion the back of that. I doubt I was alone.

          My suspicion, therefore, is that ads that manage to be "smooth with a capital smoo" will cause consumers to buy the product. Adverts that are simply "in your face" will cause the product to be remembered, but not necessarily with the right connotations...

          Vic.

          1. Yet Another Anonymous coward Silver badge

            Re: there's plenty of people willing to see ads

            > I actually went out of my way not to buy Intel just ion the back of that.

            I avoided United Airlines for years because they had to put "fly the freindly skies" into every fscking announcement - it was like being in a cult.

            Hint to all the marketing people out there; your regular customers, the ones who fly several times a week, are very valuable - they are the ones who get pissed off at this sort of thing.

            1. DougS Silver badge

              Re: there's plenty of people willing to see ads

              Advertising is as much about brand and product recognition as anything else. If you've never heard of Hyundai, what are the odds you will buy one of their cars? If you've been hearing about them for years you may at least consider them if you think they might meet your needs.

              If you are looking for a big ass pickup or a sleek sports car you probably don't consider them, because you wouldn't recall seeing those products advertised. If you are looking for a basic sedan or minivan you might decide to visit the local dealer if you want to check all the options rather than just saying "I bought a Toyota last time and I was happy with it, so I'm doing that again".

              Marketing people don't believe you are going to remember their ad after one viewing. Well, maybe their Super Bowl ads, or so they hope. They want it to enter your subconscious through being exposed to it over and over again. No matter how "immune" someone claims they are to advertising, they can't help that any more than they can avoid picturing a bright yellow elephant when they read this sentence.

              This is why they push interstitial and pop up ads, because those enter your subconscious in a manner in which ads on the top/bottom/sides of the content you are interested in do not.

        3. Anonymous Coward
          Big Brother

          Re: there's plenty of people willing to see ads

          "So marketers keep fooling themselves, and people who pay for marketing keep fooling themselves, although I expect the clever and self-aware ones know just how pointless and ineffectual the vast majority of advertising really is. Still they all believe they're 'fooling the public'. They aren't: we just don't care enough to disabuse them of their ingrained idiocy and mental blindness."

          If only that were so, then the ad biz would wither away and we would all live in bliss anon. Alas, it's not true; The advertising industry isn't a bunch of hucksters, at least as far as the paying clients are concerned. Those clients want to see increased sales in return for their ad bucks, and if they don't, they will switch agencies in a heartbeat.

          Nothing in our culture is more highly scrutinized than the results of a given ad campaign. Nothing.

          It's true that a majority of ads don't produce revenue, but a goodly percentage do, and that's what counts. And now we have targeted ads courtesy of Google et al, so all those 'impressions' being pushed into your brain are much less pointless than before. That's progress, ain't it?

          1. Anonymous Coward
            Anonymous Coward

            Re: there's plenty of people willing to see ads

            Nothing in our culture is more highly scrutinized than the results of a given ad campaign. Nothing.

            In this world, generally correlation != causation. In the world of advertising, the admen pretend otherwise; so high scrutiny != decent analysis of outcomes.

            1. Anonymous Coward
              Anonymous Coward

              Re: there's plenty of people willing to see ads

              The admen beg to differ. They have DECADES of experience to back up their work. What do YOU have? Also note precisely why a particular genre of show is known as the soap opera.

              1. Captain DaFt

                Re: there's plenty of people willing to see ads

                "They have DECADES of experience to back up their work."

                And yet they just keep cramming the same loud annoying ads in everywhere they can find or intrude, decade after decade, with no discernible improvement on them.

                Are they just that stupid? Insane? Don't give a fuck as long as they get paid?

                1. Kye Macdonald

                  Re: there's plenty of people willing to see ads

                  It is because they work. Harvey Norman is horrendously over-priced, and staffed by morons. But when people think about buying a fridge or a new computer Harvey Norman is on their list of places to consider. Their ads are the epitome of "yell at you" advertising.

                  You with your tech background will probably never buy anything from them because you can find the same product cheaper elsewhere. But the 80% of the population that find turning a computer on hard WILL go there.

                  1. sms123

                    Re: there's plenty of people willing to see ads

                    Not necessarily. I purchased a computer there for my mother and after a bit of bargaining they actually were the cheapest place to get it. You just won't get anything cheap there if you're doing the xx months interest free thing.

              2. Captain DaFt

                Re: there's plenty of people willing to see ads

                "Also note precisely why a particular genre of show is known as the soap opera."

                Uh, because they were the only genre not totally swamped with cigarette ads at the time?

                (Ladies didn't smoke back in the 50's, according to Madison Avenue.)

            2. FutureShock999

              Re: there's plenty of people willing to see ads

              Screw the "Admen" terminology.

              The people that do this are Customer Analytics experts, who mainly have degrees in Statistics and Mathematics, and can manipulate SAS statistical models like wizards - or SPSS models if the company is smaller, or R models if the company is cooler. Basically, the guys that DO this stuff really DO know their stuff statistically, usually have degrees in it, and tons and tons of practice. These guys know how to do A/B comparisons, multivariate analysis, test groups, hold-out groups, control groups, etc. They probably know a lot more about this than you ever will...because they are NOT admen, they are mathematicians. They just happen to work for admen.

              And I know, because I used to run the CRM Analytics department for a major credit card company, and my current job is head of Insights and Data for an international consultancy, and much of our client work is marketing analytics (with Risk and Fraud as the other legs of the practice).

              Marketing works, period. And if you DON'T believe it, all you have to do is look at how much money is spent on elections in the US, especially on TV and radio advertising. That money isn't spent because it _might_ work...that money is spent because it absolutely works, over and over again.

              BTW - I don't LIKE the fact that people are so easily persuaded by marketing. I hate it, in fact. The fact that it works so well really is a reflection of our frailties and shortage of logic as humans. But the technology and maths ARE pretty cool, and every now and then marketing does some good..like let you know of an event you would have missed, or a product that you really find useful. But it IS easily abused.

              1. Ian 55

                US elections

                .. are only expensive because of the fear that if the other side spend lot$ and you don't, you'll lose. So both sides spend billions of their supporters' money.

                If they had some regulation on campaign spending, the results would be the same and it wouldn't be the ad industry - including its outlets - that was richer.

        4. Anonymous Coward
          Anonymous Coward

          Re: there's plenty of people willing to see ads

          ah, two thumbs down from admen. Well done for finding your way here.

        5. Captain DaFt

          Re: there's plenty of people willing to see ads

          "So marketers keep fooling themselves, and people who pay for marketing keep fooling themselves"

          To quote:

          “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” ― Upton Sinclair

        6. This post has been deleted by its author

        7. BillG
          Happy

          Re: there's plenty of people willing to see ads

          there's plenty of people willing to see click ads.

          I win. Sadly, for those of us with websites, the sentence was only true before my correction.

      2. Michael Wojcik Silver badge

        Re: there's plenty of people willing to see ads

        there's

        I fear FartingHippo and his or her 21 followers are succumbing to false pedantry.1

        In the phrase "there's plenty of people", a copula of either number - singular or plural - is widely-accepted usage. The plural noun "people" is the object of the preposition "of", forming an adjectival prepositional phrase; it has no direct relationship to the copula and thus no influence on its grammatical number.

        The predicate of the copula is the mass noun "plenty". Like many other mass nouns in English, whether it is treated as grammatically singular or plural is a matter of dialect.

        1"Fear" is a bit strong. Actually I rather enjoy it.

    2. Lionel Baden

      Re: there's plenty of people willing to see ads

      no its "willing" !!!

      Should be Unwilling

      1. Michael Strorm

        no its becky

        No, it's "it's". (^_^)

        (Or was that meant to be the joke and I just heard something go "whooosh"....?)

    3. Anonymous Coward
      Anonymous Coward

      Re: there's plenty of people willing to see ads

      the wrong word is ads... it should be boobs.

  2. Charles 9 Silver badge

    You can extend this line of thinking to utility companies as well, which is why you see a tendency toward natural monopolies there. Utilities have the same situation: high capital cost, low marginal cost. Plus they have the NIMBY issue: people will tolerate the necessary evil of ONE utility, but once more crop up their infrastructure can become an eyesore.

  3. Michael Jennings

    Nobody knows anything

    William Goldman - author of The Princess Bride and screenwriter of many famous movies including Butch Cassidy and the Sundance Kid, and All the President's Men - not William Golding (author of Lord of the Flies and winner of the Nobel Prize for literature). He said it grammatically correctly, too, in his 1983 book "Adventures in the Screen Trade".`

    I think you could argue that there are no stars who can open a movie on 3000 screens any more. Everything is franchises and sequels these days. And occasional hits that come from left field, yes.

    1. TheOtherHobbes

      Re: Nobody knows anything

      Not really a surprise that Worstall gets the author of Lord of the Flies confused with the writer of The Princess Bride.

      For a more thoughtful and informative view of why the industry is having problems - written by someone who actually knows something about what's been going on and isn't just pontificating from ignorant distance because they have a column to write - see here:

      SIGGRAPH - what's wrong with the VFX industry.

      The real reasons are distorting tax breaks, short-term management thinking, a certain amount of art for art's sake, and poor negotiating skills.

      Hand-wavey supply and demand innit is neither a sufficient nor a required cause.

      1. Anonymous Coward
        Anonymous Coward

        Re: Nobody knows anything

        I've heard that there's a return to physical effects in the films too. Obviously won't affect the animated film industry directly.

      2. h4rm0ny

        Re: Nobody knows anything

        >>"Not really a surprise that Worstall gets the author of Lord of the Flies confused with the writer of The Princess Bride."

        I don't know much about the VFX industry, but I do know that every time Worstall has blundered into an area that I do know about with one of his polemics, his analysis has been shallow, misguided and above all, setting out to prove his desired conclusion. So I can well believe your post. Honestly, there's always that difficult choice when I see a Worstall article as to whether to read it and reward him with clicks but have the opportunity to correct the worst of his excesses, or play the long game and hope not reading will eventually mean he goes away.

        VFX studios keep going bust because they run below capacity, do they? That might harm some investors yet somehow doesn't seem to be harming the market as VFX continues to become ever cheaper and more commonplace. That is likely the greater reason - IT investments depreciate quickly and with the rate of progress in VFX by the time you are set up and ready, you have a very limited window because your next competitor springs up without the weight of investment in legacy technology holding them down. You spend ten million dollars on your hardware and software (and to some extent staff as skills also depreciate in a fast-moving sector), and six years later whilst you're still paying that off, someone else spends ten million dollars on hardware and software and new hires and they're better equipped than you are.

        Normally start-up costs are significant barrier to entry. But when your investment depreciates with time, that offsets it to a surprising extent. A second factor is staff retention. In a growing market, staff have supreme mobility. And the VFX market is growing and healthy.

      3. Vic
        Joke

        Re: Nobody knows anything

        SIGGRAPH - what's wrong with the VFX industry

        Are they misinterpreting it as SIGKILL?

        Vic.

        1. phil dude
          Coat

          Re: Nobody knows anything

          @Vic:

          SIGTER would be funnier for VFX folks...;-)

          P.

      4. ChrisCoco

        Re: Nobody knows anything

        Yes. Exactly.

        The opinions on offer in the article are some I've heard way too many times - It's abstract high-brow economics talk that has little ACTUAL correlation with the business. You have to have actually worked in the business or understand how it operates to see why the sky is falling. It's not about equipment and capital outlay - it's about scope creep and time spent (and I say time, because this is realistically the only way to quote and charge for work, because we don't get to itemise 'equipment' like the shoot people do). In the end, people costs will always dwarf equipment costs and nobody chooses your VFX company for the job because the equipment you have is two years newer than another company.

        The visual effects business like MOST creative/media/content businesses don't submit to these simplistic economic 'rules' because none of these businesses make widgets - these businesses are a mix of services and products - services and products that are never standardised. Each job is highly variational and each job is usually conducted on a project basis: there are almost never retainers or long-term contracts that span multiple projects. Quoting and cost-estimation is notoriously difficult - the end product is only very loosely defined by the client, meaning, amongst other things, that quotations can vary wildly from supplier to supplier and scope-creep is rampant.

        When is a shot 'finished'? Who decides? How many times must you re-do an effect before it can get ticked off the list of deliverables? The entire process and end result is built largely on individual opinions - and can't be accurately spec'd beforehand. This makes for extremely volatile accounting for time(money) spent on a job - the potential for a loss is very, very high. These factors would cripple other service-based industries like law, consulting etc IF they didn't have objectives that were easier to define or outcomes that were easier to agree on.

        This is partly why it's so hard to grow creative businesses - the lack of reusable 'recipes' in multiple business dimensions mean they are extremely difficult to scale.

        The VFX industry works with uncertainties and changing scope to a degree that would terrify most people in other lines of work. But they do it because they're in the business for LOVE first, not money. And thus, in the end, their powers of negotiation are usually underdeveloped and the studios have all the leverage in the relationship.

        Tax breaks, that allow studios to shop their work around the world, are a major factor in the situation, but that has been better laid out elsewhere. I think the factors that don't get enough discussion though is simply the broken relationship between client(studios) and VFX producers, the lack of accountability by studios in their project scopes and ultimately the lack of strong industry representation (negotiating bodies and standards enforcement) and perhaps even unionisation.

        In its simplest form, many of the above issues could be solved by simply specifying how many hours/days each shot would be assigned - OR how many change requests are allowed for in the budget per shot. This is how many graphic design jobs work, to limit the endless change-cycle that could creep in to every project. Good luck getting studios to agree to this system without every single VFX house getting on board at once though...

  4. Joseph Eoff

    Ah, No.

    "there's plenty of people willing to see ads, plenty willing to sell them, only a few who can intermediate between the two."

    No. There's plenty of people able to see ads, but in comparison very few people willing to see ads.

    Seriously. Does anyone really believe that people visit web sites, read magazines, or watch TV with the intent to watch the ads. Really? "Oh, I watched a truly marvelous series of ads last night on the TV. Such a pity they kept being interrupted by that damn movie."

    1. dogged
      1. Anonymous Coward
        Anonymous Coward

        Re: Ah, No.

        "In fact, advertising used to be an art."

        Most Classic FM adverts often make me cringe and change channel to Radio 4 ...but once in a while they have an advert which really is amusing even on repetition.

        It is probably very subjective - possibly generational. After all the words "Radio 4 humour" are an oxymoron to me.

      2. Squander Two

        Re: Ah, No.

        Advertising still is an art. And, like all art, it is occasionally done beautifully but there's a hell of a lot of dross out there.

      3. Anonymous Coward
        Anonymous Coward

        In fact, advertising used to be an art.

        So did film making and SFX come to think of it.

      4. Joseph Eoff

        Re: Ah, No.

        Exceptions granted, though I will note that that kind of thing is funny and entertaining despite being an ad.

    2. fandom

      Re: Ah, No.

      "willing to" != "delighted to"

      If you have ever watched an ad without being physically forced to do it, then you were willing.

    3. A Non e-mouse Silver badge

      Re: Ah, No.

      I watched a truly marvelous series of ads last night on the TV. Such a pity they kept being interrupted by that damn movie

      Someone once described ITV programs as the filler between the adverts. And it was true: The programs were just there to keep your attention so you'd be around to see the adverts. The TV companies have a fine line to tread between forcing as many adverts on you as possible and you getting p***ed off and changing channels.

      But this was before some bright spark realised that: A) You can make a lot of money from premium rate phone voting, and B) Your program can actually just be one massive hype-gasm advert for your final product. And if your hype-gasm advert includes premium rate voting, you're getting your customers to pay for your advert. Win/Win!!

      1. Anonymous Coward
        Anonymous Coward

        Re: Ah, No.

        Win/Win = Won.

        1. Anonymous Coward
          Anonymous Coward

          Re: Ah, No.

          Win/Win = One

      2. This post has been deleted by its author

  5. PleebSmash
    Paris Hilton

    diminishing returns

    A well-versed YouTube uploader can do a lot with no budget, and a lot more with a high-end camera or better animation software. GPUs are improving much faster than CPUs, and will reap the benefits of Moore's law right to the "end" at 1 to 5 nanometeres in 2020-2025, before cores start being stacked and we get Moore decades.

    For comparison, Big Hero 6 used a cluster with somewhere between 500 teraflops to 2 petaflops of performance, 589+ TB of RAM, 690+ TB of storage, and used their Hyperion software to create diverse, realistic feeling background crowds with loads of ray tracing. It's not Earth-shatteringly difficult to obtain 128 GB of RAM, a couple dozen terabytes of storage, and a few teraflops of performance now, and although there may be a similar gap between what hardware Disney/Pixar and amateurs can buy in 10 or 20 years, the capability gap will shrink. The software will get better to the point where Disney will sing "Let It Go" as it lays off extra animators. Such improvements will trickle down to the lone animator.

    Computer animation will allow for small filmmakers to create expansive greenscreen worlds (decent CG is well within the reach of TV shows now), and eventually, virtual actors, perhaps based on famous dead ones. You can expect speech synthesis to advance too. Input an actor's filmography, press "Go". Personality rights may become as big of a battle as copyright in this scenario.

    1. Squander Two

      Animation

      > The software will get better to the point where Disney will sing "Let It Go" as it lays off extra animators. Such improvements will trickle down to the lone animator.

      Nonsense. Computers don't make animation easier. A modern Pixar film requires more animators than an old hand-drawn Disney effort, not less. There is also the fact that no two animators have the same style, so you always give each main character to a different animator so that those characters act differently -- it's not an efficiency measure.

      Computers have taken over the work of inbetweening in hand-drawn stuff, but that was always tedious grunt work anyway.

      If Disney require far fewer computers in the future, they will presumably require fewer IT support staff.

      1. PleebSmash

        Re: Animation

        > Nonsense. Computers don't make animation easier. A modern Pixar film requires more animators than an old hand-drawn Disney effort, not less.

        A modern Dreamworks/Disney/Pixar film is a blockbuster. More budget, more animators, more chest hair on Shrek.

        They are also doing much more on computers than traditional animators could have ever attempted. You can't ray trace in near real-time by hand. But eventually, there will be diminishing returns as the animation will look good enough to match any style you need for your story/vision.

        1. Squander Two

          Re: Animation

          > They are also doing much more on computers than traditional animators could have ever attempted.

          Yes, exactly: computers haven't made being an animator easier; they've made the output better.

        2. Anonymous Coward
          Anonymous Coward

          Re: Animation

          "They are also doing much more on computers than traditional animators could have ever attempted. You can't ray trace in near real-time by hand. But eventually, there will be diminishing returns as the animation will look good enough to match any style you need for your story/vision."

          I don't think so because the animators are aware of Uncanny Valley. Sure, increased computational power has allowed more things to be 3D animated properly (for example, doing Tangled required being able to really good hair, which is something that took time since Shrek and Toy Story to pull off). But in the end, artistic style has fewer limitations than those attempting realism like with Beowulf.

          The whole argument reminds me of the time Capcom switched from cels to modeling for Street FIghter IV. Since their target was HD with higher resolutions and frame rates, Capcom figured the end result would be better with modeling, and they had a rival against which to compare: SNK's latest King of Fighters, who stuck to their guns and used hand-drawn cels. Based on the numbers since that point, it seems Capcom picked the winning horse.

      2. Adam T

        Re: Animation

        Speaking as an old-ish animator...

        Animation was simple 30 years ago. It was getting complicated 15 years ago. It's bloody complicated today.

        There are so many disciplines, and more are being added all the time as we (and pioneering clever people) discover new things to do and ways to do them. The things that used to be time consuming are made easier for sure, but this is an industry obsessed with doing more for the same price (just like the chip industry), and where you just needed artistry 20+ years ago to be among the best, today you need a degree in mathematics. Well you don't, but it helps a bunch depending on your chosen field.

        There will always be work for those who invest themselves, but it won't always pay well. But apparently there won't be enough food to feed the whole world sometime in the future too...that's progress for you.

    2. IrishFella

      Re: diminishing returns

      Like that GOD AWFUL film - The Congress, Jeasus it was great till it all went mentally animated.

  6. Graham Marsden

    "Money flows to whoever it is that has the rare thing."

    Unfortunately sometimes that "rare thing" is huge pots of money and the willingness to use it to achieve one's aims no matter what...

    "this also explains why competitive markets work so well. If all the stages in the production chain are in good supply, with no-one having a lock on any rare part of it, then the only rarity left is in our consumer desire to have that thing, good or service. Which means that the gains accrue to us,"

    This also explains why markets *need* to be regulated by people who are outside them, because otherwise the player with the big money can afford to either buy out their competitors and establish a monopoly position or copy their competition's product and sell it at a loss, knowing that they can afford to do so until their competitor goes bust trying to compete (or paying for lawyers) or sells up to them.

    Once that's happened, they can get a lock on that product, whatever it may be, and ensure that nobody else gets a look in to the market. At which point the consumer starts losing out because choice is stifled, competition is non-existent, the price goes up and it's trebles all round!

    See Rockefeller, JP Morgan, Carnegie, Google, Amazon, eBay...

    1. Anonymous Coward
      Anonymous Coward

      Re: "Money flows to whoever it is that has the rare thing."

      "This also explains why markets *need* to be regulated by people who are outside them"

      Problem is, without the knowledge of how the market actually runs, outside regulators can make bad decisions, poisoning the market for everyone. Based on your reasoning, you can't win: an unregulated market naturally gravitates towards a winner, an inside regulator can cheat the system, and an outside regulator can poison it.

      1. h4rm0ny

        Re: "Money flows to whoever it is that has the rare thing."

        >>"an inside regulator can cheat the system, and an outside regulator can poison it."

        Well if you accept that anyone without a vested interest must be ignorant to the point that they cannot effectively regulate, maybe. But is that the case? First off, the reason you have regulators outside the market is generally the regulations are for guarding against externalities. People within the market are pretty capable of working out what is most efficient for their goals. You get the regulations to prevent those goals conflicting with the wider society - environmental pollution, anti-trust issues (where one market reaches over into another), defrauding investors, etc. And people outside of a market are often very capable of recognizing where that market is impacting them.

        1. Charles 9 Silver badge

          Re: "Money flows to whoever it is that has the rare thing."

          But just as insiders don't always see how their actions impact outside, so too do outside regulators not always see that their regulations can have a very bad effect on the market they're trying to regulate. Consider this. Why isn't there much of an investment in more modern nuclear reactors? Part of it is capital but the main reason is the recalcitrance of nuclear regulators. Scared as they are by thoughts of Three Mile Island, Chernobyl, and Fukushima, they don't seem to realize that these are exceptions rather than norms (TMI was actually contained--no one died--Chernobyl was a result of a bad experiment combined with poor management, and Fukushima was lack of foresight combined with an unprecedented natural disaster). Have they given thought to the idea that, maybe, we learned our lesson and are now building newer, better reactors that are designed to handle things better than the ones already in existence now? Why is there such reluctance to allow even one or modern reactors in the middle of nowhere, perhaps, when we have no practical alternative to growing energy demands for the forseeable future? Renewable is too fickle and too dependent on rare materials that have to be mined, creating a catch-22 of sorts (you need energy to mine the materials you need to produce energy, etc.), and we can't continue with the status quo.

  7. TRT Silver badge

    Seems to me that a rarity...

    in the film industry is a novel script. They're just pumping out remakes of films that shouldn't be remade at the moment; Total Recall, Robocop, Judge Dredd, Mad Max etc etc.

    1. A Non e-mouse Silver badge

      Re: Seems to me that a rarity...

      I read somewhere that the studios can't afford to make films themselves anymore. Instead, they have to borrow money from the banks who really want their money (with interest!) back from the studios. The way to minimise risk is to re-make or spin-off something that has previously made money,

      1. Squander Two

        Re: Seems to me that a rarity...

        > The way to minimise risk is to re-make or spin-off something that has previously made money,

        Partly true, probably, yes. But the thing about something that has previously made money is that buying the rights to it costs a fortune. Whereas an original -- and unproven -- script is quite cheap. So your point explains the cases where the studio already owns the rights, but not things like Oldboy or The Assassin and Nikita, where they have to buy them first.

        1. Anonymous Coward
          Anonymous Coward

          Re: Seems to me that a rarity...

          "Partly true, probably, yes. But the thing about something that has previously made money is that buying the rights to it costs a fortune. Whereas an original -- and unproven -- script is quite cheap. So your point explains the cases where the studio already owns the rights, but not things like Oldboy or The Assassin and Nikita, where they have to buy them first."

          Perhaps because the sleeper hits don't have a lot of rights attached to them, meaning they're not as big of a gamble as they would seem. Consider The Blair Witch Project, which was a sleeper hit despite the shoestring budget.

    2. Yag
      Trollface

      Re: Seems to me that a rarity...

      Shame on you to complain about the ecological trend of the film industry!

      They should be praised for doing more than their fair share of script recycling.

    3. Gordon 10 Silver badge
      FAIL

      Re: Seems to me that a rarity...

      Wait a cotton picking minute! Are you seriously suggesting the recent Dredd was worse than the Sylvester Stallone travesty? Are you mad? Whilst the 2nd one wasn't amazing (it were good though) it was Dredd and shoulders over the first.

      1. J.G.Harston Silver badge

        Re: Seems to me that a rarity...

        Even Sylvester Stallone has said the the new Dredd movie was better then his Dredd movie.

        1. Vic

          Re: Seems to me that a rarity...

          Even Sylvester Stallone has said the the new Dredd movie was better then his Dredd movie.

          Stallone never made a Dredd movie. It never happened. It just didn't, OK?

          Vic.

        2. cray74

          Re: Seems to me that a rarity...

          "Even Sylvester Stallone has said the the new Dredd movie was better then his Dredd movie."

          Yep. It had one of the best dystopic cities I've seen. I loved it more for the background (and cute telepath) than Dredd.

      2. TRT Silver badge

        Re: Seems to me that a rarity...

        I tried to watch the new one... got about 10 minutes into it waiting for Judge Dredd to appear, then realised he had already been on screen for the last 9m30. The Stallone outing was terrible: let down by a poor script and poor acting, but Sly himself was the Dredd from my imagination when I read 2000AD as a teenager.

        They shouldn't have made EITHER of the films, to be honest.

        EDIT. Forgot, the whole taking the helmet off thing, just wrong, very wrong.

        1. phil dude
          IT Angle

          Re: Seems to me that a rarity...

          @TRT: "The Stallone outing was terrible: let down by a poor script and poor acting, but Sly himself was the Dredd from my imagination when I read 2000AD as a teenager."

          Spot on.

          P.

      3. julian abbs

        Re: Seems to me that a rarity...

        the recent Dredd was indeed even worse than the sylvester stalone version, two hours of my life that i'm never going to get back.

        which reminds me i still owe a punch in the face to the person who recommended it to me. If you're reading this could you meet me on the terrace...

    4. Androgynous Cupboard Silver badge

      Re: Seems to me that a rarity...

      A friend has an interesting take on this - to paraphrase:

      Fast And Furious 7 (yes, they made 7 of them) has taken $332m in China, more than it's taken in the US (where this festering stinker is inexplicably popular too). Previously China's biggest grosser, in both senses, was Transformers: Age Of Extinction.

      The export market now is typically worth more than the US domestic, and a film with explosions and no meaningful characters, plot or dialog translates universally. So Hollywood is going big on VFX, short on stories.

      Contrast with HBO (amongst others) turning out quality, complex and sometimes fairly challenging stories with decent casts, excellent writers and top budget production. The film and TV market have switched the roles they were 20 years ago, and it's looking to stay that way for some time.

    5. Squander Two

      Re: Seems to me that a rarity...

      It's a myth that Hollywood makes more remakes and sequels than it used to. Half the great films of the Golden Age were remakes of silent films. The Front Page seems to have been remade every few years since it was written, and one of those remakes was His Girl Friday, generally acknowledged as an all-time classic. Some remakes are pointless shite; others -- The Thomas Crowne Affair, The Talented Mr Ripley -- are superb. Same as non-remakes, then.

      Not sure Fury Road counts as a remake, either. Also, it's excellent.

      1. LucreLout Silver badge

        Re: Seems to me that a rarity...

        Not sure Fury Road counts as a remake, either. Also, it's excellent.

        Fury Road is just Mad Max without Mad Mel. His 'views' were never going to sit well with Hollywood, so while they were desperate to cash in on another Mad Max movie, they were more desperate to steer clear of Gibson.

        Hopefully, if the movie is as good as people say, it will be the start of a second generation trilogy.

        1. Squander Two

          Re: Seems to me that a rarity...

          > Fury Road is ...

          > Hopefully, if the movie is ...

          I like the way you claim with absolute confidence what it is, then reveal you've not seen it.

    6. DropBear Silver badge
      Unhappy

      Re: Seems to me that a rarity...

      " Seems to me that a rarity in the film industry is a novel script."

      I was under the impression that the golden age of sci-fi created larger heaps of novel scripts (well, novel to most people today - sci-fi buffs would probably call them old hat) than Hollywood could possibly consume in the next century. Instead, it seems to me the rarity is someone actually willing to take ANY risk on something that isn't proven to be a formerly successful blockbuster, ie. "a sequel".

      Also, I suspect there's a limited number of different ways one can make a movie while ensuring that absolutely, strictly zero need for grey matter is involved (and JJ seems to have used up most of them) - the poor viewing public seems to be easily confused by any moral ambiguity or upset by any challenge to their values or indeed the mere lack of a happy ending or a triumphant hero. There's only so many flavours of anodyne...

      1. Squander Two

        Re: Seems to me that a rarity...

        > it seems to me the rarity is someone actually willing to take ANY risk on something that isn't proven to be a formerly successful blockbuster, ie. "a sequel".

        But this is obviously untrue. For all the whining about how many sequels and remakes there are, by far most films are neither.

  8. kokoro

    Just to note that all the hardware is out there and easy to acquire at the consumer level compared to when I started out in the vfx industry in 1996 and it was $80k for an SGI and Alias. Things shifted to Windows and pretty soon the small handful of training facilities became every uni and college and lots of bright eyed 20 somethings, usually pfys who want a cool looking career. Thus, as the hardware became cheaper, so too increased the volume of graduates who will undercut themselves and each other to death to stay contracted. Thing is, as Simon pointed out, being really good at this stuff is bloody hard work, never gets any easier or more secure but there are still enough desperate operators and new grads out there to make it an employer's market.

    What wasn't raised at all in the article is offshoring. Often this is a total mess and makes for disaster, but like everything in 21c neoliberal capitalism, price rules as does trashy content and tonnes of it and the lower the price, the better delusion you're getting ahead as a studio. so there are increasingly less roles in most wealthier countries because part of staying competitive means packing as much off to India, China, Eastern Europe etc as you can. Further, local companies undercut each other to get gigs and my experience has been that daily freelance rates shrank 1996-2003 and have either dropped further if you are junior or stayed about the same for seniors. Recent funny moment... Animal Logic educator's night here in Sydney. Bunch of school careers advisers are genuinely morally shocked to be told full time roles and job security do not exist and did not know where to put themselves, especially after signing all the nda's to even get in the door.

    From my perspective, I'd rather teach 3d and vfx and write curriculum and choose bits of freelance to fill remaining holes while watching my college, rather than use its students, contract the website to asia. I basically make the same money, have a third the stress and don't have to deal with total utter job insecurity and the raving eccentricity, intrigue and backstabbing along with the personality disordered egos that are not hard to find in all roles and levels in this game. Everyone dreams of starting their own production company. Many who did years ago have enough experience to stay in business but make the same money and do the same stuff. Marry, start a family?... lol! Most studios collapse and the bigger ones swallow or get swallowed, endlessly because they have to compete to get the gig. Just look at Adobe and venture capitalists beating it out to own The Foundry recently. It could just have easily collapsed and been swallowed by Autodesk. This flows on to the animators who love it so much that they subliminally accept those at the top taking the biggest cuts just to pay the rent.

    1. Anonymous Coward
      Anonymous Coward

      People in China churn out not only good copies of famous paintings - but also very good "in the style of" ones - at a price that is ridiculously cheap. They even do them on a mini-production line - adding the same detail to a row of canvases in sequence.

      When interviewed they say they aspire to be recognised internationally as an artist in their own right - until then the rip-offs pay their way.

    2. LucreLout Silver badge

      being really good at this stuff is bloody hard work, never gets any easier or more secure but there are still enough desperate operators and new grads out there to make it an employer's market.

      Quite. I'm part way through (yet another) degree, and have still to complete the "animation module". Which I am sure will be very interesting, and certainly far outside my comfort zone, but working for large corporates, animation is a skill I'm unlikely to ever use.

      I can understand why animation would be a specialist course in its own right, but it feels to me that insisting so many study it just devalues what is likely to be a complex skill, requiring much practice to appear polished.

  9. Mike Richards

    Only some are going bust...

    ...if you've got twenty minutes to spare with the end credits of a modern blockbuster, you'll notice a lot of Indian and Chinese names cropping up in the VFX credits. A lot of the tedious, *relatively* low-value tasks, such as rotoscoping are being outsourced to places like Bangalore, and an increasing number of other parts of the VFX are following them East now that movie companies realise that the stuff coming out of India and China is just as good as can be done in California or London.

    The US animation industry has been contracting for some time now, particularly Dreamworks Animation which housed a lot of smaller studios. Dreamworks had wanted to release three full-length animations every year, but as anyone who has endured most their movies knows, that came at the expense of script and animation quality. They've now cut back to just two movies per year, one of which will be a sequel. The result of that has been heavy layoffs of animators and the total closure of Pacific Data Images who had a good claim to being one of the fathers of CGI.

    1. kokoro

      Re: Only some are going bust...

      It is a two-faced business. While western studios crash or complain about being able to profit, they simultaneously will offshore as much as they can destroying local talent and industries. Where this thing, the Guangdong Animation Village (http://www.tqglobal.com/?p=506) gets off the ground, it for example will be a city itself of 55,000 people outside of the mega city of Guangzhao. So there is a tonne of talent in countries like China and India and perhaps going are the days where it was one legal license of Maya for 150 operators sleeping in dorms.

      Thing is cities like Sydney love running festivals like Vivid and other design related events and claiming rightfully so to be globally creative. At the same time the government removes all subsidies so the games industry, if you can still call it that, is now almost on life support and local firms offshore as much as they can. If the industry was smart it would stop trying to undercut and destroy itself and each other and form a cartel like tradies, lawyers and doctors have done to hold up prices against greedy corporates.

      At the same time colleges compete to churn out vocational 3 year degrees at $60k a pop that often barely leave enough skill to get a foot in the door except for the naturals who number about 1 in 12. I focus hard on cultivating the left and right brains of my students. They have to be uber-geek of Reg standards who are prepared to eat sleep and breathe it and be highly skilled at very complex and constantly evolving tools, while at the same time being creative and not losing that under a lot of ego and financial pressure. They also these days need to be diversified and cross-disciplinary and may work in design, broadcast, prototyping, arch vis, interactive etc. That's the glam biz of the vfx industry.

  10. Howard Hanek Bronze badge
    Holmes

    History

    It's not like we lack a history of successful special effects/animation/VFX operations. Disney nurtered a , culture of animators, set designers, artists, production people that lasted thirty years pumping out one or two full lenghth films a year. I don't recall them ever losing money.

  11. Henry Wertz 1 Gold badge

    "Also note precisely why a particular genre of show is known as the soap opera."

    Tradition? I do realize back in like the 1950s, soap companies sponsored them. But, that's really not relevant now. I'd say at present, one show is not a genre. I don't know about UK, but in the US, General Hospital has been the one and only soap opera left for close to 10 years.

    I'm really not sure admen necessarily know what they are doing. I'm sure some are quite competent but the rest.... The ones that get me are ones that.. well, on slacker, for instance, the audio on most of the ads *just* play some music, forgetting that it's an *audio* app and therefore I'm not going to be staring at the screen. They never state (audibly) what product or service they're advertising, so they've wasted money for nothing. I see this on TV too (when I don't fast forward through the excessive ads) -- ads that think they are being clever (I guess), but really just manage to not even state what they are advertising, so they're a waste of money.

    I think (in the US at least) one reason for this low quality is simply oversupply of ad slots. The networks are currently in a downward spiral of the form "We are getting less money per ad slot. Therefore, we need more ad slots to keep revenues up." This of course lowers the value per ad slot even further. This, I think, is where these low-quality ads come from, they are people who would not have bought ads at all with fewer ad slots & higher price per slot, but in the present market get whoever to make an ad and air it.

    As for VFX market -- I think the article touches on the problem well... but I think Moore's Law itself is hurting them too. I would guess effects that 5 or 10 years ago would have gone to a VFX firm, now... it won't need much hardware, software is available to do it, and they can hire on one (or some) artists to operate it. Something like a Lord of the Rings movie would still be a big project but the typical special effects just aren't any more.

    1. Charles 9 Silver badge

      "Tradition? I do realize back in like the 1950s, soap companies sponsored them. But, that's really not relevant now. I'd say at present, one show is not a genre. I don't know about UK, but in the US, General Hospital has been the one and only soap opera left for close to 10 years."

      If that were true, the Soap Opera Digest would be LONG out of business. Truth is, soaps are still out there, and they remain soaps, as most are done by PGP (Proctor & Gamble Productions, as in the big soap conglomerate). There remain four soaps still running. You listed ABC's General Hospital already, NBC has Days of Our Lives, and CBS still has The Young & The Restless and The Bold and the Beautiful.

  12. T. F. M. Reader Silver badge

    Define "willing to see ads"?

    Anyone who prefers free ad-supported versions of X to paid ad-free ones && does not have Adblock installed? That would be plenty, I imagine.

  13. danny_0x98

    Some Thoughts

    Capitalization is an issue, but more importantly, the hardware and software advances faster than the debt on the old, now under-productive, systems are paid off. The hardware doesn't care what country it is in, so countries with lower labor costs than Hollywood, California, can buy new equipment, hire the artists and technical support and be ready to profitably charge less with better throughput than the established Hollywood companies. (And Hollywood companies is a bit of an anachronism, FX production has been migrating out of town for a while. Yes I live there and am on the remotest fringes of the fringes of show business.)

    One also has issues about a limited number of customers. There aren't many people who can make 100 million dollar movies and, collectively, they don't make that many movies in a year: miss out on the dozen big budget movies slated for 2017 and that's an under-utilized 2015.

    The studios are also wary of FX cost overruns and also may push for fixes if the shooting script changes or the output doesn't work convincingly. Bottom line, fixed fee contracts with inadequate margins and little tolerance for add services. Because there are so few customers, it again is take it or leave it. And look at the credits of the next comic book movie you see. Notice how many FX houses were involved. Clearly the studios/producers are spreading the work and I imagine that's partly meant to reduce risks, especially as FX houses do go out of business.

    It's a buyer's market and the buyers know it.

    I suppose there are timing issues as well. These movies are mostly targeted for a summer release, which could mean that once attached to one movie, an FX house has to pass on other business because they only have so many people and systems. Or look at it from the other direction, one could build the capacity for a few months of multiple movies, and then have to figure out how to carry the payroll into the next year's production season. That's assuming that Fox, for example, would be unconcerned about leaks or paying for the r&d for others when hiring an FX house that is working on Marvel and WB films.

  14. Terry 6 Silver badge

    "If all the stages in the production chain are in good supply, with no-one having a lock on any rare part of it, then the only rarity left is in our consumer desire to have that thing, good or service. Which means that the gains accrue to us, in what economists call the consumer surplus. "

    I'd started agreeing with the article's premise ( first time ever) because there are real life examples of this working.

    Like the pottery painting cafes that appeared a few years back.

    It was a great idea.

    The original owners did well for a while, but then were copied by newcomers who hadn't had to go through the trial and error stage and flooded the market.

    In many places it seems to be the Johny-come-lately cafes that are still around, the original ones having been forced out of business by cafes that have had all the groundwork done and who focus on just the bits that they've seen will earn money.

    However, the final paragraph, quoted above, doesn't hang with this.

    In too many cases that idealistic view of a market is totally distorted by the likes of slick marketing, vertical integration, or just deep pockets (keep the price low, force the opposition out of business).

    Which is why my cable provider is Virgin, when once there was a company called "Cable London" who did the cable laying and subscriber recruiting. But then got swallowed by NTL.

    Or the paper called "The Independent" which isn't anymore.

    Or the satellite company called Sky but no BSB or whatever they were called.

  15. Youngone Silver badge

    Not Really Right

    The basic conceit behind this article seems to be that the movie business lives in some sort of free market system, but this is completely false.

    The movie business lives on a diet of public subsidies, and has for more than a generation. California has been unable to tax the movie business since forever and every time they try, movies head off to Toronto, the Gold Coast, Wellington, and probably several other places I don't know about.

    These places offer massive subsidies, (because of jobs apparently), but as soon as any attempt is made to force the studios to pay their own way, everything is shut down and the next bunch of suckers start handing over the dough.

    I know this because "The Hobbit" that you all "enjoyed" recently cost my neighbours and I $50 million of our dollars to make.

    You're welcome.

  16. Anonymous Coward
    Anonymous Coward

    Home work

    The movie studios do the job themselves. Look at American Battleship with Carl Weathers. It's fantastic!

  17. Ben Craig

    "...William Golding once said “nobody knows nothing” (this may well be one of those quotes which has been edited over the years to sparkle, but the essence is there)"

    Also seems to have been re-attributed as well ;-) William GOLDMAN actually said this, in his book 'Adventurers in the Screen Trade". And to be correct, it was "Nobody knows anything".

  18. WylieCoyoteUK

    willing to watch adverts...I don't think so.

    I had a shock the other day, I thought that my "skip forward" button had stopped working, I was actually being forced to watch adverts.

    Then I realised I was actually watching TV in real time. I pressed pause, made a cup of tea, and all was right with the world again.

    But even though I never watch adverts, I am not naive enough to think they don't have an effect.

    What really annoys me is that I am paying for them (and indirectly all commercial TV content) every time I go shopping.

    Yes, I use adblockers too, and spam filters.

    I still purchase products, so I must really screw up all that analysis of ad campaigns.

  19. WylieCoyoteUK
    Facepalm

    willing to watch adverts...I don't think so.

    I had a shock the other day, I thought that my "skip forward" button had stopped working, I was actually being forced to watch adverts.

    Then I realised I was actually watching TV in real time. I pressed pause, made a cup of tea, and all was right with the world again.

    But even though I never watch adverts, I am not naive enough to think they don't have an effect.

    What really annoys me is that I am paying for them (and indirectly all commercial TV content) every time I go shopping.

    Yes, I use adblockers too, and spam filters.

    I still purchase products, so I must really screw up all that analysis of ad campaigns.

  20. ChrisCoco

    The opinions on offer in the article are some I've heard way too many times - It's abstract high-brow economics talk that has little ACTUAL correlation with the business. You have to have actually worked in the business or understand how it operates to see why the sky is falling. It's not about equipment and capital outlay - it's about time spent.

    The visual effects business like MOST creative/media/content businesses don't submit to these simplistic economic 'rules' because none of these businesses make widgets - these businesses are a mix of services and products - services and products that are never standardised. Each job is highly variational and each job is usually conducted on a project basis: there are almost never retainers or long-term contracts that span multiple projects. Quoting and cost-estimation is notoriously difficult - the end product is very loosely defined by the client, meaning, amongst other things, that quotations can vary wildly from supplier to supplier and inevitably scope-creep is rampant.

    When is a shot 'finished'? Who decides? How many times must you re-do an effect before it can get ticked off the list of deliverables? The entire process and end result is built largely on individual opinions - and can't be accurately spec'd beforehand. This makes for extremely volatile accounting for time(money) spent on a job - the potential for a loss is very, very high. These factors would cripple other service-based industries like law, consulting etc IF they didn't have objectives that were easier to define or outcomes that were easier to agree on. This is partly why it's so hard to grow creative businesses - the lack of reusable 'recipes' in multiple business dimensions mean they are extremely difficult to scale.

    The VFX industry works with uncertainties and changing scope to a degree that would terrify most people in other lines of work. But they do it because they're in the business for LOVE first, not money. And thus, in the end, their powers of negotiation are usually underdeveloped and the studios have all the leverage in the relationship.

    Tax breaks, that allow studios to shop their work around the world, are a major factor in the situation, but that has been better laid out elsewhere. I think the factors that don't get enough discussion though is simply the broken relationship between client(studios) and VFX producers, the lack of accountability by studios in their project scopes and ultimately the lack of strong industry representation (negotiating bodies and standards enforcement) and perhaps even unionisation.

    In its simplest form, many of the above issues could be solved by simply specifying how many hours/days each shot would be assigned - OR how many change requests are allowed for in the budget per shot. This is how many graphic design jobs work, to limit the endless change-cycle that could creep in to every project. Good luck getting studios to agree to this system without every single VFX house getting on board at once though...

    1. Charles 9 Silver badge

      "Good luck getting studios to agree to this system without every single VFX house getting on board at once though..."

      Which then introduces a dilemma. With the industry that cutthroat, all it would take is ONE renegade firm to make the whole works collapse because the studios will then clamor to the renegade. Sounds to me like you could equate the VFX business problem to the Prisoner's Dilemma of game theory. Everyone's out for themselves, so they don't trust each other. Thus the best-case scenario (and perhaps the only one that sees them surviving) can't be reached. Instead, they assume one of them will turn on them, so they will turn in kind. Inevitable result: everyone gets exploited by the studios since THEY have all the money.

  21. Anonymous Coward
    Anonymous Coward

    Animation is like printing, in fact

    The printing industry works exactly the same way. It costs a lot of money to install a large sheetfed press with all the gubbins, train the production personnel, set up the computer to plate workflow and the rest of it. Then you have to fill capacity in order not to go bust. It's the stuff of nightmares; the ravenous beast that must be fed.

    What's more, you will fill capacity at below cost because you will go bust more slowly doing that than having machines and workmen idle.

    Part of the problem, of course, is people with more money than sense who think they will get in on a business, somehow do better than everybody else and destroy the competition, after which they can put the prices up.

    It's the sheer repeatability of the pattern in industries which any business school lecturer could point to as being basically similar that causes one to realise that free markets and freely available information won't optimise the economy so long as investors have testicles.

  22. relmasian

    Tim Worster has written an insightful article explaining how "money flows to whomever has that rare thing." It explains a good bit of the tech economy with a twist of Register writer style. I suppose Adam Smith would have mumbled something about supply and demand, but the principle is the same.

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