VFX OUTLOOK: FROM SWOON TO BOOM AND FULL SPEED AHEAD

 By CHRIS McGOWAN

 Last year, while the movie and TV industry played catch-up with delayed projects, explored various release strategies and struck outsized production deals, the VFX sector invested heavily in remote work capabilities and achieved significant advancements in areas like virtual production. The stage was set for 2022, which looks to be a boom time for studios, streamers and the VFX business.

“The amount of work out there is crazy right now,” says Ingenuity Studios founder and Visual Effects Supervisor David Lebensfeld. “I think that it’s just going to keep increasing, too, throughout 2022 and 2023. There was a backlog of projects that didn’t happen in 2020. So, it feels like everything has been compacted.”

In addition, the streamers have forged ahead with their already ambitious original production plans. Lebensfeld comments, “Streamers are definitely impacting business positively. It’s more competitive than ever on the streamer side, with their ongoing content war. As a result, there’s so much work to be had. To be honest, I don’t think the industry has ever been bigger or busier.”

In terms of deals, big can mean really big. Streamers and studios announced various nine-figure production packages in 2021. Netflix is paying an estimated $465 million for two sequels of the Lionsgate mystery Knives Out. The streamer has also struck a multi-year deal with Steven Spielberg’s Amblin Partners. Apple TV+ will spend $200 million on Matthew Vaughn’s Argylle. Meanwhile, ViacomCBS (owner of streamer Paramount+) is reportedly paying $900 million for new South Park seasons through 2027 and 14 South Park feature films. Among various other major deals, Universal Pictures and its streaming sibling Peacock are spending an estimated $400 million+ for a new Exorcist trilogy. And in the year’s biggest deal of all, Amazon purchased MGM for $8.45 billion.

Meanwhile, the streamers further fortified their positions last year by dominating the 2021 Emmy Awards, with Netflix taking best series (The Crown) and winning 44 Emmys, while HBO/HBO Max took 19, Disney+ captured 14, Apple TV+ took home 10 and NBC garnered 7. To emphasize their global reach, the streamers are spending heavily on U.S. and global programming. For example, Netflix has invested heavily in scripted originals for Japan and also planned to produce 40 anime releases last year. Furthermore, it said it would spend $500 million on films and series produced in South Korea in 2021. 

“The streaming landscape is more dynamic than ever,” says Albert Cheng, Chief Operating Officer at Amazon Studios. “With an audience who is increasingly hungry and tuned in, it has been so exciting to see content scale and evolve.” 

Pixomondo CEO Jonny Slow observes, “Long term, we think that the streaming model is very much here to stay, and it’s a more global and less regional business than linear TV, so the budgets are bigger and the creative ambition is high end.” 

For those companies releasing movies both in theaters and through streaming services, flexibility has been necessary to counter the pandemic, and experimentation will continue in 2022. One example is Disney. “We adopted a three-pronged strategy for releasing our films that consisted of theatrical releases, direct to Disney+ and a hybrid of theatrical plus Premier Access,” said Walt Disney Company CEO Bob Chapek at an August 12 Earnings Conference Call. “Distribution decisions are made on a film-by-film basis, based on global marketplace conditions and consumer behavior.” 

The pandemic has affected all sectors of film and TV, including VFX. Spin VFX President and Executive Producer Neishaw Ali observes, “The ongoing pandemic has created some good changes in that we now have a proven online production platform and have demonstrated that we can work effectively remotely.” 

Lebensfeld says that COVID “has really unlocked globalization of talent. Now that infrastructure has been put in place to optimize artists’ ability to work remotely, it’s working wonderfully but also requires a retooling in communication practices.” 

James Whitlam, Framestore Managing Director – Episodic, comments, “I think we’ll be seeing the ramifications of the pandemic for many years to come. In spite of the difficulties, the industry as a whole has become more resilient and self-assured, I don’t think anyone could have predicted how successful the working-from-home paradigm would be globally. The absence of a drop in overall productivity is testament to the agile nature of the business and the brilliant crews we work with.” 

Whitlam continues, “As we return to the studio, flexible working arrangements will no doubt put a strain on many companies as it involves more equipment, more support and greater management overhead to maintain a partially decentralized crew, but this needs to be weighed against providing a manageable work/life balance, which, along with the quality of the projects on offer and the culture of a company in the actual studio, is an important factor in any artist’s choice of where they decide to hang their hat.” 

Chris Healer, founder and CEO of Eyelash (formerly with The Molecule), believes that artists want to be more in control of their working environments now. “I can’t imagine most VFX artists will choose to get dressed in the morning to appear at an office. Some will. Most will take a second thought to listen to their music as loud as possible, or choose days to socialize, or spend the day in their PJs. Many have just moved to a different location where they can’t come to the office.”

Weta Digital’s Executive VFX Producer David Conley points out the pandemic’s complex effects. “While COVID has certainly accelerated trends like the growth of streaming content, the integration of LED panels and on-set virtualization, we’re only beginning to understand the downstream effects on the disruption of production pipelines. COVID has brought with it the increased reliance on remote work environments, increased complexities around content security requirements, and increased reliance on cloud-based technologies, to name a few issues, all of which will change the way we produce VFX-dependent content.”

Virtual production, including LED stages, has also been having a deep impact on film production and post-production. Whitlam comments, “Framestore pioneered LED tech on Gravity a decade ago, so it’s been great to see how much LED Volumes have proliferated over the past two years.”

Pixomondo had four total LED volumes in Toronto and Vancouver as of September and a deal with William F. White International to own and operate them together throughout Canada. Pixomondo’s Slow explains, “When everyone understands the workflow, they start to adapt their process and bring a lot of creative decisions forward. We are still only just getting started with how virtual production will impact production in the future.”

Weta Digital’s Conley points to the rapid acceptance of virtual production, despite the learning curve. He explains, “We’re all still learning how best to use it and what the trade-offs are, but it’s clearly become normalized as a production option.” 

Virtual production took a leap forward with The Mandalorian’s use of ILM’s StageCraft integrated virtual production platform and its LED Volume. ILM Senior Vice President, Chief Creative Officer Rob Bredow notes, “Increasingly, we are seeing more filmmakers interested in learning about how they can best make use of virtual production and, specifically, how they can utilize our StageCraft LED stages to the greatest effect. 

With the demand for content at an all-time high, we believe virtual production will continue to attract filmmakers who are looking for collaborative solutions to challenging production and effects scenarios.” 

The VFX business has also been affected by the rise of the streamers and their increased production of series. Framestore’s Whitlam comments, “The episodic nature of a lot of the work being commissioned by the streamers is certainly a challenge industry wide, in terms of expectations of quality, shot count and the time available. Traditional feature film effects practitioners and companies are coming to terms with the different approach that is required to deliver 8 to 10 hours of content as opposed to two. The level of planning that needs to go into delivering a marquee show has opened the door for a lot more communication in pre-production between filmmakers and our team, which in turn leads to a lot more creative buy-in and ownership from the people crafting the effects. I think the overall effect on the business has been incredibly positive.” 

ILP (Important Looking Pirates) Executive Producer Måns Björklund adds, “There is an unseen – at least in my 20-plus years of the business – growth and amount of work out there at the moment. We are seeing horizons of work down in 2024, which hasn’t been the case before. Clients are starting to understand that they need to reach out and commit in a much earlier stage than before to be able to book resources. With the growth, there also comes the need for more artists to be able to produce all the content.” 

On the other hand, Lebensfeld notes, “There is more access to global talent, so VFX teams can leverage flexible schedules. You can essentially build a studio that runs around the clock to keep up with demand. Having talent from other countries can be a tremendous asset.” 

The cloud and AI are other important VFX factors. The cloud looks to grow in importance for VFX. Healer comments, “Many facilities are limited by machine power, and moving to cloud-based configurations means that limit may be removed. The irony is that no matter the limit, we will push it.” 

Weta’s Conley comments, “Many studios have been experimenting and building tools that use AI-assisted workflows and machine learning, and I expect we will see more of that work in production next year.” 

Spin VFX’s Ali says, “Machine learning is starting to show up in commercial software solutions. This trend will only continue, and we have just scratched the surface on the possible use cases. Adding more of an ability to direct the art output of these systems will be important. What is coming down the pike in real-time graphics in 2022 will be a game-changer. The quality and complexity of what can be accomplished in real-time will take a leap forward.” 

The pandemic arguably had an unexpected benefit in expanding the use of visual effects. Adds Lebensfeld, “Overall, I think people trust VFX more. You had to rely on it to do things that you could usually do in physical production pre-COVID. VFX has really proved its worth during COVID, and more people are comfortable with it. Turning to VFX even allowed for more safety. You couldn’t fill an auditorium with 200 people, so you did it digitally. An additional benefit is that VFX also allows for redundancy. So, if you don’t get what you need on the day, you still have options in post.” 

Conley is enthused about the future of VFX. “There’s a lot to be excited about in 2022. We expect to see continued growth in the visual effects industry resulting from increased content creation across theatrical and streaming releases. Along with the growth in content, we’re seeing a diversification of creative and technical opportunities to help filmmakers tell their stories across a spectrum of budgets. Thanks to innovations in technology and technique, I am excited to see how VFX will continue to be further integrated into the filmmaking process in unique ways, providing more creative challenges for VFX artists across the industry.”