Oscars: Why This Year's VFX Winner Could Be Exported

So long, L.A.! Foreign-based visual effects houses are responsible for four of the five nominees, from 'Guardians of the Galaxy' to 'Interstellar,' as much of the business has fled the city.
Courtesy of Industrial Lights & Magic
'Captain America: The Winter Soldier'

This story first appeared in the Feb. 13 issue of The Hollywood Reporter magazine.

When it comes to hawking its biggest movies to worldwide audiences, Hollywood is quick to sell the whiz-bang appeal of its state-of-art visual effects. But Hollywood itself — at least in geographical terms — can no longer claim to be the home of the VFX industry.

L.A.-based VFX houses have shuttered and VFX artists have been forced to abandon California in droves in search of work in other countries. An industry lobbying group, created to combat VFX flight, has just collapsed. And this year's Oscar nominees bear further witness to the new reality: Four of the five nominees for the visual effects Oscar are primarily the work of VFX houses headquartered abroad.

X-Men mutant Sunspot (Adan Canto) in before and after shots.

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Efforts to counter the trend have come up short. "We've tried various different ways to get our due, from union to trade association efforts trying to bring the VFX industry together," says Scott Ross, a co-founder of Digital Domain. During a Jan. 22 appearance at the Sundance Film Festival, George Lucas, who invented the modern-day visual effects industry with Industrial Light & Magic, said flatly, "Anybody who says they make money in visual effects is lying."

Two years ago, the high-profile implosion of the L.A.-based Rhythm & Hues — it was forced to file for Chapter 11 bankruptcy protection just days before it won an Oscar for Ang Lee's Life of Pi — became a rallying cry, forcing the industry to look at the issues that were rocking the visual effects community. The VFX budget on a major tentpole movie can go as high as $100 million, but faced with those astronomical sums, the studios had started chasing production incentives in Canada, the U.K. and elsewhere that can drive down those costs by 50 percent or more. An uneven playing field was created. And L.A.'s VFX business, unable to bid against foreign-based outfits, largely collapsed.

In the wake of Rhythm & Hues’ collapse in 2013, VFX artists staged a demonstration outside the Oscars.

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A little more than a year ago, a group including Ross and VFX artist Daniel Lay led an effort to create the Association of Digital Artists, Professionals & Technicians. ADAPT retained the law firm Picard Kentz & Rowe to challenge subsidies in the U.S. Court of International Trade, asking that a mandatory duty be levied against producers who utilize subsidies. But, with so much of the effects industry having already fled California, ADAPT's organizers weren't able to raise the funds they needed to mount a successful legal challenge. On Jan. 19, Lay posted a letter on the VFX Soldier website, announcing ADAPT, which had only raised enough money to cover 2 percent of its legal costs, was dissolving. He said its lawyers had had meetings with the International Trade Commission, U.S. Customs & Border Protection and the U.S. Department of Commerce, getting a receptive hearing. But the visual effects industry failed to support the effort. "It might be that the VFX community is more bark than bite," Lay had to admit.

Read more VFX Trade Association Dissolved, Ends Lobbying Effort to Address Subsidies

This year's Oscar nominees, which also are nominated for Visual Effects Society Awards, reflect the VFX landscape. Captain America: The Winter Soldier is the only nominee for which a notable amount of work was handled by a domestic VFX house, San Francisco's Industrial Light & Magic (ILM also has bases in Singapore and the U.K.). Guardians of the Galaxy, the other Marvel film nominated, was completed by 13 VFX houses, with much of the work going to the U.K.-headquartered Framestore and MPC (both also maintain bases in Canada). Work on nominee X-Men: Days of Future Past also was led by MPC. Interstellar's lead VFX house was Double Negative, a London-headquartered company that merged this past year with Prime Focus, a company founded in India that maintains additional facilities in various countries. And Dawn of the Planet of the Apes was handled at Peter Jackson's Weta Digital in Wellington, New Zealand. So the odds are good that this year's Oscar for best visual effects will be exported.