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Small Vfx Shops Rewrite Rules

Boutique shingles hit on business model that keeps them in the black

While the visual-effects industry has been jolted by two high-profile bankruptcies and infighting over unionization, some houses have been steadily sending in shots — and making a living at the same time.

These are the boutique operations — often micro-setups that maintain a permanent staff of about five to 10 people and then staff up to as many as 25 to 30 people when demand dictates. They also eschew fancy digs for more affordable facilities, and resist the temptation to grow too big too fast.

“I watched some guys buy incredible buildings and then go out and put $3,000 couches in their offices,” says Rob Hall, owner of Almost Human. “When you have to make the monthly payment, it’s got to be hard because you know if work slows down you could be in real trouble, real fast.”

Hall, who worked with low-budget icon Roger Corman when he first moved to Hollywood, has built a large part of Almost Human’s business by pairing practical makeup effects with visual effects on small- to mid-budget films like “The Crazies.”

“Having a specialty gives you an edge,” says Hall, whose previous credits include work on TV genre shows like “Angel.” “You become known for a particular thing and then other people will come to you for those skills.”

Visual-effects houses such as Almost Human and Drawn by the Light — which has done work for “Fringe,” “CSI,” “Mad Men” and “Revolution” — bank on their skills and relationships to keep the work coming in season after season, even as international competitors nip at their heels.

Small shingle owners also note that they have to rely on a bank of highly skilled freelancers to take on the overflow in times of plenty. Those relationships can easily make or break a company as well.

“You definitely have to be able to do the work at a very high level, regardless of the deadline, if you want to stay profitable,” says Rik Shorten, one of the founders of Drawn by the Light. “Producers want to know that they can trust you, especially when TV deadlines are involved, so there’s definitely room for someone with great skills to work a lot as a freelancer.”

The boutique business model relies on a steady stream of work for the most invisible kinds of vfx rather than the splashy — and expensive — shots that dominate summer tentpoles.
Instead, the boutique owners lean toward TV work or films in the $40 million budget range or below. Many realize that despite the glamour and prestige that comes with a big-budget vfx blockbuster, there is a downside when you’re a smaller operation.

“We saw the volatility of the features business and we realized that if you ask someone if they’ve got a release date and they don’t have one, that can mean trouble,” says Tom Mahoney, a founding partner at CoSA VFX, which has done work on more than 50 feature films and a dozen TV series. “With television there’s steady work on a specific deadline, which is very good.”

These strategies don’t surprise Jenny Fulle, CEO of the Creative Cartel, a company that manages vfx production and has worked on films like “Ted” and “After Earth.” She believes the industry is shifting and that companies will have to develop new business models to survive.

“It’s definitely not like it was before,” Fulle says. “These smaller houses are able to adjust more easily when there’s a down period like now — all the blockbusters have been done for the summer and TV production is down.”

Boutique vfx houses are able to fend off some international and incentives competition by staying close to where much of the post-production work is still done and be available to clients for face-to-face meetings.

“We’ve established a lot of trust by getting shots done on time, on budget and being right here in everyone’s back yard,” says Dan Schmit, owner of Engine Room, which has done work on “The Mentalist.” “Some people want to know you’re just a few miles down the road.”

Or, in some cases, just down the road in someone’s garage.

“For years we worked out of the back of a house until we started using enough freelancers that we needed a place where they could come and do work for us,” says Mahoney. “We went into this knowing we didn’t want to grow too big too fast because we primarily wanted to be artists who got to keep making art for a living.”

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