Rhythm & Hues bankruptcy reveals vfx biz crisis

Rhythm &#38; Hues is in a strategic position which several of the Hollywood majors have to support, or the competition between these studios is going to seriously heat up.<p>R&#38;H is the #1 studio in the world for digital animals: they did almost all the coca cola polar bears ads and "Babe the Talking Pig" nearly 20 years ago! Since that time they have dominated in the digital animal arena, doing pretty much every quality realistic digital animal in a major release film since, including "The Life of PI" (which is expected to get Best Visual Effects this year.)<p>Now look at the VFX studios left: ImageWorks is Sony's, ILM is Disney's, Weta is Peter Jackson's... What about Universal, Warner Bros, Paramount, Fox, &#38; Paramount? They will have no one 'of scale' to produce their cute, talking animal pictures... This may seem minor, but it's not. Not at all. If is in the serious interest of these non-VFX studio owning film studios to keep R&#38;H alive and well.

Things won't stabilize until VFX workers unionize and negotiate with the Producer's Guild collectively for pay, benefits, and residuals. The money is there to make this work; what's missing is the bargaining power.<p>I'm not a particularly pro-union guy in general, but given the way the film industry is currently structured, it's not really optional. They'll have to do it or they'll just continue to go bankrupt.

When I was at NetApp I got to work a bit with the WETA Digital guys (Lord of the Rings vfx) and I was amazed at how cut throat this business was. I saw them bringing something that was absolutely critical to the success of the film and yet they had no pricing authority at all on their services it seemed like.

I wonder what role Hollywood Accounting [<a href="http://en.wikipedia.org/w/index.php?title=Hollywood_accounting&#38;oldid=537592477" rel="nofollow">http://en.wikipedia.org/w/index.php?title=Hollywood_accounti...</a>] is playing in all this?