I wanted to write a bit about the current VFX industry debacle that came to everyone’s FaceBook awareness last week. Though not a VFX – visual effects, Mom, Dad, if you’re reading this – major, in motion graphics we deal pretty often in compositing and chroma-keying (green screen), which both fall under the VFX domain. I have a lot of friends who are VFX and 3D animation majors. A few of them have already graduated and are working in the industry for companies like Disney and DreamWorks.

VFX, which includes compositing and 3D modeling/texturing/lighting/animation, was one of the money fields. So we were told. Yes, the hours are long and grueling, and the work is highly technical and requires a great deal of instruction, learning, and experience – but if you make it out with a VFX degree, you’ll make money. At least, that’s always been my perception. So it’s very very disheartening to see all these VFX houses closing. Especially when it seems like a new VFX-heavy blockbuster film or jaw-dropping video game is coming out every month.

Even television has been stepping up its game, with higher and higher production values being seen on premium cable channels like HBO, AMC and Showtime.

With the film, TV and video game industries this busy, how can it be that Rhythm & Hues (the company behind VFX-Oscar-winning Life of Pi, The Hunger Games, X-Men, 300, The Lord of the Rings, etc, etc, etc, etc, etc…) is bankrupt?

If you do a bit of Googling, you’ll come up with lots of articles about the situation. But I thought this Reddit post did a really good job of summarizing the problems faced by the VFX industry today. I think the first point – the most important point, according to its author – is the most interesting (below). I wasn’t aware of the role of foreign subsidies at all before this crisis.

“The most noticable, is that other countries offer tax subsides that do not allow even competition. If a VFX studio in California bids on work for a set price, then a VFX studio in Vancouver can bid that very same price AND offer a 30-35% (not sure of exact figures) tax rebate on that work, but the VFX studio doesn’t get that money, the movie studio does. So they (the movie studio) automatically get 30% of their VFX paid for by tax payers instead of out of their already wealthy pockets. The California VFX studio therefore cannot compete with this situation, so fair competition is impossible.”