Not long ago I got a call from a Time magazine reporter working on a story on the visual effects business. As we discussed the dire financial straits of many vfx companies despite their growing importance to studio movies, she asked, “Don’t these people have business plans?”

I told her she was proceeding from the false premise that people start vfx companies to be business owners. Most people who go into vfx do it for the same reason people become actors: They love the work. But when they fail as businessmen, the result is too often misery.

The latest bad news from the vfx biz comes from Montreal’s Fake Studio, part of the Camera e-Motion Group. A handful of artists who worked for Fake on the 3D vfx for Dimension’s “Piranha 3D” have yet to receive payments due in April. Their plight has inspired a great deal of anger in vfx circles, where hearing “unpaid artists” and “Montreal” opens the old wound of Meteor Studios and the problems artists had getting paid for New Line’s “Journey to the Center of the Earth.”

One of the unpaid artists, Manny Wong, told Variety that with the Meteor incident in mind, he negotiated a payment-in-advance deal, but upon arrival in Montreal, he liked the atmosphere at Fake enough to forego advance payment. He says the producer was “very upfront” with him about the pic’s financial difficulties through two crises that threatened to shut down the picture. Then Fake management said it hadn’t been paid by the client and couldn’t pay the 3D team anymore from its own pockets. Earlier this week, Dimension told Variety Fake has been paid. However Fake’s payment to the artists is still due.

Last week Dave Rand, a veteran of Meteor who has become something of a watchdog for abuse of vfx artists, posted about the Fake and its unpaid artists on his Facebook page. Marc Cote, an owner of Fake, responded with a note admitting the company is in arrears and saying it is “making arrangements with all of the creditors … to reimburse them as quickly as operations permit.” He continued: “Short of shutting down the company we cannot reimburse everybody’s debt in one shot. … We are 100% committed to reimbursing this debt.”

It’s been common for vfx shops to get behind on debts and wind up paying past debts out of current receipts; that’s why one analyst calls the entire vfx business “a Ponzi scheme.” Fake’s problems seem to fit that pattern. Cote was in production and did not respond directly to Variety’s inquiries, but we did hear from Louis Turp, a consultant working with Cote on “options and strategies for the future of the company.” Turp quoted Cote saying, “It won’t happen again” and added. “Cote always fulfills his obligations.”

It’s easy to paint Cote and Fake as villains, but these problems are endemic in the vfx business, and the response has been mostly finger-pointing. Studio execs blame unprofessional management of vfx companies. California artists call for an end to runaway production. Some artists call for a union, others despise the idea, and no existing guilds are rushing to organize vfx artists.

“The show must go on” has been the showbiz mantra, and the movie biz has counted on artists taking that to heart. But the patience and goodwill of vfx artists aren’t infinite. Whether the solution is market-based (i.e., artists negotiating ruthlessly and walking off immediately if a payment is missed) or a union, it’s becoming clear that the status quo will not hold. Something has to give.


London vfx shop Double Negative, fresh off of Christopher Nolan’s hit “Inception,” has switched to The Foundry’s Nuke compositing software. Nuke, developed by Digital Domain, is gaining acceptance at many major vfx studios and is becoming a de-facto industry standard. … The Foundry has also been busy in the vfx software space. At Siggraph they announced new releases of Nuke (6.1) and Ocula plug-ins, as well as the first release of Mari, for 3D texture painting. Last week they announced two plug-ins for Adobe After Effects: CameraTracker brings Nuke’s matchmove abilities to After Effects, and Kronos 5.0 does retiming and motion blur. … Meanwhile Digital Domain has standardized on Tweak Software’s RV image and sequence viewer. Tweak and the Foundry are part of the growing sector of off-the-shelf software providers for high-end CG production. … Sony Pictures Imageworks has announced another open-source software initiative, OpenColorIO a color management solution to help ensure color remains consistent across multiple software applications. With vfx companies sharing work, that’s a considerable challenge.

The Visual Effects Society has announced that NASA astronomer Dr. Rich Terrile will be the featured speaker at the VES Production Summit on Oct. 23 at the Ritz Carlton in Marina Del Rey. He will speak on how the future of evolutionary computation and artificial intelligence will impact the entertainment industry and its business models … Gnomon School of Visual Effects in Hollywood will present a panel of artists from Look FX on the making of “Lost,” on Aug. 26. The Gnomon series is sponsored by the VES …

Digital Domain Holdings has pacted with “Brother Bear” producer Chuck Williams to join its Port St. Lucie, Fla. studio. Williams was most recently a creative consultant on Warner’s “Legend of the Guardians.” … Mothership, the production company associated with Digital Domain, has signed director Grzegorz “Greg” Jonkajtys to its roster. Mothership will represent Jonkajtys exclusively for commercials and music videos. … Game streaming company Gakai has appointed David Reitman VP of business development. Reitman is a vet of the online gaming industry who supported the team that deployed “World of WarCraft,” “EverQuest” (I and II) and numerous other games online. … Teleprompting company Autoscript has tapped Greg Prentiss as director of sales for the U.S. region.