It was one of the most riveting keynote speeches I had ever heard.
"Who are the real Hollywood stars?" Scott Ross asked the packed crowd filling Salon 1 of the Renaissance Hollywood Hotel during October's annual SMPTE Technical Conference.
Then he put a list of the top 20 highest-grossing box office films of all time on the screen in front of the Society of Motion Picture and Television Engineers audience.
"Notice that, in this whole list, only one franchise featured an established star," Ross said. "But all of them, without exception, were powered either by massive digital visual effects or computer-generated animation."
It took a second for that to sink in, but Ross was correct. Only the "Pirates of the Caribbean" franchise was headed by a big name, Johnny Depp, and even those blockbusters had as much VFX on the screen as swashbuckling.
"Alice in Wonderland" also featured Depp, but his star power was not the focus of its publicity. All of the rest of those top 20 films were headed by actors who were virtually unknown when they were originally released. But each of them, from "Avatar" to "Jurassic Park," were headlined by ground-breaking special visual effects.
Ross himself has been a pioneer in creating this digital wizardry, having been the general manager of LucasFilm's Industrial Light and Magic empire in the 1980s and going on to found Digital Domain in 1993 along with James Cameron and Stan Winston.
Projects under Ross' leadership have garnered eight Academy Awards for Best Visual Effects and earned many billions of box office dollars.
TRYING TO SURVIVE
"Visual effects companies have historically been service providers," Ross told me, "and 90 percent of them, such as Dream Quest Images or Café FX, have come and gone under the competitive pressure to keep costs down. Several of the service providers like Pacific Data Images (PDI) have transitioned into content creators with, for example, PDI now part of DreamWorks SKG, and Pixar owned by Disney."
Jake Sully and Neytiri from director James Cameron’s 2009 3D blockbuster “Avatar”
Ross maintains the survivors are either incredibly well managed and holding on by the skin of their teeth or have become part of major studio content providers with deep pockets such as ILM with LucasFilm (the "Star Wars" series); WETA, which is owned by Peter Jackson ("Lord of the Ring" cycle); or Sony Pictures ImageWorks, now a unit of Sony Pictures Digital Productions ("Alice in Wonderland" and "The Amazing Spider-Man").
The only two major independent visual effects service facilities who have managed to remain in business are Digital Domain ("Titanic" and "Avatar"), which Ross founded, and Rhythm and Hues ("Night at the Museum" and "Happy Feet") lead by John Hughes (not to be confused with the late director).
"Because high-end VFX facilities are service-oriented businesses they have to quote pricing based on their estimates for creating effects that have never been done before," Ross said. "Therefore accurately predicting how much money will be needed to finish a project is very difficult, especially in a business where there are other facilities willing to take on prestige projects at below cost. So the bottom line competitiveness of the VFX industry means that nobody is really making any money in it."
Ross predicts this is going to change the future structure of the visual effects business—that is, if independent VFX facilities are going to stay in business at all.
"My answer would be 'no,'" Ross reveals. "I think that, given the current constraints of the industry, if I was to gaze into my crystal ball and look three or five years out, this facility's business model is a non-starter."
Several visionaries have tried to crack this conundrum, with one of the first being Roland Emmerich's 1996 sci-fi smash "Independence Day."
"What Emmerich and his co-writer/producer Dean Devlin did, was build an internal team of creative VFX people and farm out all of the work to outside facilities," Ross said. "The studio thought this would reduce the cost of the special effects work, but despite the fact the film's digital imagery won an Oscar, the process of creating it proved very ineffective. Another production of the same era, Danny Cannon's 'Judge Dredd,' tried to four-wall the process by renting a warehouse and stuffing it with VFX computers. But that didn't work either."
HERE TO STAY
The demand for visual effects will not go away, of course. So Ross envisions a future VFX industry built around a hub-and-spoke paradigm, which is being accelerated by broadband Internet connections.
"This way, the effects can be created in Chicago while being viewed in New York," he tells us. "Matte painting can be done at Matte World Digital in northern California, while animation goes to Animal Logic in Australia and the compositing is performed at Cinesite in London."
That's because the demand for visual effects is growing exponentially. A super-spectacular effects movie of the 1980s would boast a few hundred VFX shots. Today, those shots would average in the thousands.
"What we are seeing is a desperate call for more and more and more," Ross said. "As with any industrial process, there is some cost-savings thanks to increased scale. But audiences are expecting each new film to top the previous one if they are going to put butts in the seats."
So although the facilities are having trouble making a profit, Ross sees a growing demand for superstar special effects artists with some top visual effects supervisors already earning upwards of $1 million per year. It wasn't too long ago that this was a decent salary for on-screen stars. But today, it's not the actors who pull in the audience. It's the VFX that brings in the mega bucks.
"We need a major change in the industry," Ross finished up. "The people who own and operate visual effects facilities have to understand that they are not the tail that wags the dog. They are the dog!"
After all, as Ross told the SMPTE audience, "It don't mean a thing if it can't go ka-ching!"
Jay Ankeney is a freelance editor and post-production consultant based in Los Angeles. Write him at JayAnkeney@mac.com.