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In With a Big Bang, Out With a Whimper

Despite an explosion of business, mid-sized special effects houses are squeezed by the thin profit margins and intense competition

April 20, 2003|P.J. Huffstutter | Times Staff Writer

As splashy effects have become increasingly responsible for drawing crowds to theaters, budgets have swelled. And so has the competition. With studios having become more cost- conscious, some visual effects houses make rock-bottom bids to get jobs. Not all shops can afford to do that.

Another challenge is to manage the flow of work so that people and machines are idle as little as possible, a particular ordeal for mid-sized outfits.

Not everyone at an effects house works on the same movie at the same time. The animators on "Spider-Man" had to wait for artists to design the main character, and then for all of the live-action footage to be shot, before they could bring the virtual web-slinger to life.

Artists who added details to the movie -- from the sheen in the fabric of Spider-Man's costume to the smoke that billows out of a burning building -- had to cool their heels until the animation supervisor and the director signed off on the digital Spider-Man's performance. And compositors, who layer together the digital and live-action elements of a shot, were forced to wait until nearly everyone else was done.

"If people aren't working, that's money wasted," said Sarnoff of Imageworks. "It's not just the salaries. It's the cost of their workstations sitting idle. It's the cost of the software licenses not being used. It's the general overhead costs of running a business and no revenue being generated."

Managing the workflow proved to be a burden for Mill Film in London. Its staff of 150 wasn't big enough to handle several large contracts simultaneously. But without overlapping projects, the shop faced long gaps between movies when overhead costs still had to be met, said Robin Shenfield, chief executive of the Mill, the parent company that continues to create effects for TV commercials.

"To really continue to succeed, we'd have to invest even more and put it on a bigger scale," Shenfield said. "We didn't want to do that. You take very high risks if you depend on Hollywood movies."

Big companies such as Imageworks and Industrial Light & Magic have the capacity to handle an entire project by themselves. Along with hundreds of workers, each maintains thousands of high-end computers in so-called server farms that store hordes of data and manipulate it into dazzling effects, such as the frenetic fight sequence between Yoda and Count Dooku in "Star Wars Episode II: Attack of the Clones."

How Small Shops Thrive

At the other end of the spectrum are smaller, scrappier rivals. They rely on powerful personal computers and cutting- edge software tools that can produce effects that look as good as those created on the much more expensive machines used by larger firms. That allows the small shops to thrive in a market full of producers eager to cut costs.

Gray Matter FX, a boutique firm in Venice that combined Nicholas Cage's the two performances in "Adaptation," keeps costs down by retaining a small staff of 15 and bulking up when a job comes along by hiring digital artists, animators and others on a contract basis.

David Foster, a producer of the recent science fiction film "The Core," noted that the movie's visual effects supervisor, Gregory L. McMurray, relied on at least six different effects houses, many with only a few dozen employees. Part of the benefit, Foster said, was that the small teams had fewer jobs on their hands and could focus exclusively on his movie. "Of course, such decisions are also driven by economics," he said.

In its early days in the mid-1990s, Cinesite wasn't too concerned about costs and profit. Parent company Kodak was eager for its unit to take on jobs and prove itself in Hollywood. But not anymore.

With its L.A. office shutting down, Cinesite's visual effects group will focus on its operations in London, where it is considered a big player.

"In London, we can win," said Kodak's Rodli. "In California, we just can't."

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