Imagine Sony staffers investing countless hours on a film to be released by Paramount. Or how about Disney employees sweating out minute details on a New Line film? It’s not as farfetched as it might seem. Every day, the inhouse visual effects departments at the major studios toil away on projects set for release by their competitors.

Several studios recently have beefed up their on-the-lot capabilities to create digital effects. These high-tech departments include Sony Imageworks, Buena Vista Visual Effects, Warner Bros. Imaging Technology (WBIT, pronounced “wabbit”) and Paramount Paramount’s Production Resource Center.

No favoritism

Some industry execs were surprised to learn that these departments welcome clients with projects for other studios. Perhaps even more surprising, home-studio projects aren’t given a price break, nor are their producers encouraged to keep the effects work inhouse.

Admittedly, hiring out to other studios is old hat. From the decades-past practice of releasing an under-contract actor to work across town, to shooting on each other’s lots, it’s quite clear that Warner’s New York street has welcomed the world.

On the Paramount lot, Bob Andrews heads up the Production Resource Center, which produces main titles and visual effects for mostly television clients, including non-Paramount shows.

“We’re part of the studio group, and our charter is to be a profit center,” says Andrews. “We compete against other (effects) companies for the business of Paramount productions, but we also drum up as much third-party business as possible.” “Studio executives looked at a film’s total budget versus the visual effects budget and started thinking they’d like the overhead on that ‘X’ million of dollars,” says Peter Takeuchi, exec producer for feature films at L.A. effects house Rhythm & Hues.

“But I think they simplified idea of what it takes to run an effects studio. There’s the assumption that all you need is a good designer, an SGI machine and some software, but there’s a lot more to it than that.”

Crowded field

Visual effects has become one of the most competitive segments within the production industry. George Lucas’ Industrial Light & Magic (ILM) has managed to become a recognizable brand name, while a handful of other houses, including Boss Film Studios (“Species”), DreamQuest (“Crimson Tide”) and Digital Domain (“Apollo 13″) are generally included in any short list of companies that are tops in the field. And other companies, such as Rhythm & Hues, which has become known for digital images for commercials, are expanding and entering into the high stakes world of feature film effects.

“As the digital effects industry came into its own, competition got tougher,” says Harrison Ellenshaw, VP of visual effects for Walt Disney Pictures. “Now there are 35 facilities to compete with. I’m talking about anything from one workstation to 80.”

In addition to completing composites for Disney’s “Operation Dumbo Drop,” Buena Vista Visual Effects was recently working on a number of pictures for outside clients, such as “Mortal Kombat” for New Line.

“We must bid competitively even on Disney product to keep ourselves going,” adds Ellenshaw. “But we’ve worked on a good number of films from outside Disney.”

Sony Pictures Imageworks is, besides Disney, the other key player among studio effects operations. The division recently completed effects work for “Virtuosity” and has also worked on “Speed,” “My Life” and “Wolf.”

“Our strategy here has been to grow the company at a sustainable pace rather than take on ILM straight out of the gate,” said Imageworks senior VP G. William Birrell.

Evolution

But a studio visual shop may suffer because of its position as just another department within a big corporation, says Hoyt Yeatman, CEO of DreamQuest. “Over time, it may become like the sound or lighting or grip department on the lot. It’s adequate, but is it the very best? A company like ours that specializes in visual effects and depends upon that work for its existence has more incentive to be the best in its field.”

Still, the studios have ambitions. Andrews said Paramount is not satisfied with only TV effects. “We’re looking to move into (features) by the end of the year, but it’s very competitive, and it raises a lot of questions. We’re trying to strategize how to appropriately go about it. Nobody wants to jump in and commit resources to equipment and personnel at the level that Imageworks did.”

Applications likely

He added that Paramount will likely focus on only certain applications of film effects, such as wire removal and rotoscoping. “Do we want to be an ILM, where we invent effects that require a commitment of an incredible amount of money? I’m not sure we’re prepared for that.”

Andrews acknowledges that convenience plays a role in a producer’s decision to use the Paramount graphics facility. “A producer might not want to run all over town when they’re on a tight schedule, when they can just go across the lot.”

“From my perspective as a producer at ILM and Digital Domain, there was always a misunderstanding on the part of the studios as to why effects work cost so much,” says Takeuchi. “It’s very labor intensive, and as it moved into the digital arena, acquisition of hardware and software drove costs up,” said the ex-staffer of ILM and Digital Domain.

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