Outlook 2017: Rising Sun Pictures - Challenges facing the VFX industry
Issue: January 1, 2017

Outlook 2017: Rising Sun Pictures - Challenges facing the VFX industry

Tony Clark is the founder and president of Rising Sun Pictures (https://rsp.com.au/home/) in Adelaide, South Australia. The studio has contributed to films and series such as X-Men: Apocalypse, Prometheus, Game of Thrones, X-Men: Days of Future Past, The Great Gatsby and The Wolverine, among many others. Here, he looks at the Strengths, Weaknesses, Opportunities and Threats facing the visual effect industry.

What are the Strengths of the VFX industry going into 2017?

“As we head into 2017, our industry continues to deliver production value to an ever increasing number of projects and distribution outlets. Distribution is evolving and multiplying, with the likes HBO, Netflix, Amazon, Hulu and others driving high-end production values and budgets into broadcast and streaming content, such as The Crown. That is increasing opportunities for visual effects facilities to access new markets and deliver quality work.

“On the workflow front, what has traditionally been a capital intensive business is now more accessible to smaller players, as cloud-based, pay-as-you-go tools and lower-cost, high-speed telecommunications become increasingly available. The quality of off-the-shelf tools continues to improve, only slightly behind the leading edge, and once unique intellectual property is becoming widely available to the mass market.

“The combined parts represented here build a world where small, startup or niche players can deliver complex and quality work with minimal capital other than the strength of their ideas and skills.”

What are the Weaknesses, or are there ‘weaknesses’ in the VFX industry for 2017?

“For me, the key weakness is the depth of talent, in particular high-level leadership of the VFX teams. As the volume of projects grows, there’s an increasing need for production and supervision talent to take leadership of the projects and deliver success. There’s a long-term deficit of experienced VFX producers, and when they’re controlling increasingly-large quantities of the film’s budget, there is a natural desire to have that budget in safe hands. In an industry that’s challenging in terms of the pressures it puts on people’s lives, we need to take a long view on helping these roles be sustainable so we can keep great talent available on both the production and vendor sides.”

“The industry is also cyclical, with peaks and lulls in production that often see many films delivering in the first part of the year to meet the US summer releasing window, and a corresponding dip from May through October. This causes significant volatility for facilities, driving the flux of talent in and out of facilities to manage the expense side, meaning that talent remains mobile rather than staying around and making long-term contributions to the pool of knowledge. Coupled with downward pressure on costs, facility margins are thin, making it challenging to build a permanent base of quality talent. 

“Facilities are nothing but groups of talent bought together under a common roof — there’s value in keeping the band together and it’s key to delivering the best results for a client’s budget. I don’t think our industry has this part right yet.”

What Opportunities await the industry in 2017?

“Talent and workflow development are at the heart of what I think are our opportunities into the coming year. We need to feed new talent into the business to ensure there’s a strong supply and we can grow our talent up into senior roles over time. We’ve been doing this with a local university here in Australia and are having fantastic results, not just for RSP, but flowing talent into the industry nationally.

“The improvement of tools and processes that support them are also key opportunities, as these provide leverage for a facility in terms of being efficient at our work and therefore delivering value to our clients. With competition from lower cost locations, we all need to be strongly focused on ensuring our creative talent has the maximum creative time and the systems are there to support them in this.  These systems are necessary to support the never-ending push for increased visual complexity. With hundreds of elements being created, artists need strong support from the toolset to manage the complexity of their work without drowning in data.

“Lastly, the huge opportunity is in the growth of new markets, in particular China. RSP has been engaging there for a number of years and built great relationships. As Chinese box office rivals and surpasses other major markets, there’s a strong desire on their part to see local content with global production values, and for facilities that can partner with them to deliver at that level.”

What Threats might there be for VFX in 2017?

“Talent, again, is at the heart of this. In a business that’s all about the quality of your teams, losing talent is a major threat to the viability of a facility. If your business is the sum of your talent, then keeping them engaged and motivated has to be a key part of your thoughts for the year. This needs to go beyond just money too; if you’re negotiating on money alone, you’ve already lost. It’s made complex by an ongoing [effort] to achieve more for their budgets, and the plethora of opportunities for artists to relocate to facilities in various locations, which puts pressure on facility margins.

“On the infrastructure side, as barriers to entry in software and hardware drop, and huge compute resources can be rented by the hour, the access to cloud computing that is a strength is also a threat to established players in the way it enables pop-up competition to access the resources that were traditionally the domain of the mega facilities with minimal capital outlay.

“Then there are the global dynamics. In the past year, we’ve had Brexit and a presidential election in the US. There’s been increasing rumbling around rollbacks of rebates that have built major centers of excellence in VFX but could just as quickly see them gone on a political whim. With an industry increasingly dependent on rebate assistance from nations and states, and a population clearly tired of the political status quo, the potential for major change is very real.”