The Great VFX Ramp Up: Forecasting, Revenue, Capacity and Artist Needs Post Writer's Strike

The 2023 writer’s strike cut a swath through the film and television post-production industry.

Visual Effects went from the mad content rush of the CoVid boom to an unprecedented phase of uncertainty and challenge. Massive industry layoffs and deep cuts followed as studios braced for the extended post-production drought. Even after the strikes finished, the industry has been slow to rebound. Superhero projects are flailing. The Amazons and the Netflixes are holding back on new projects - the stock market is demanding profitability over growth - and the result is that VFX studios have had to cut even deeper.

Teams are depleted. Veterans are churning out of the business. The economics of supply and demand are in full force.

But as production starts to ramp up - VFX studios have a unique, next big challenge.

How to rebuild.

Studios, from giants to smaller outfits, are bracing for what many are calling "The Great Ramp Up"—a period of production activity expected to follow the current stagnation. This article covers the complexities of navigating this impending surge, exploring how VFX producers can leverage scenario planning to make informed decisions in a landscape transformed by the strike, and how our technology can help.

The Present Challenge: A Landscape Altered by Strike

The writer's strike has not just paused production; it has significantly altered the landscape of the VFX industry. Conversations with dozens of VFX studios and independent, client-side VFX producers reveal a common theme: the immense pressure the strike has exerted on the industry. While forecasts vary, the consensus points towards a significant pinch felt across the board and a slower than hoped rebuild.

Currently, there's a lot of talk but limited action, with many projects either on hold or proceeding at a smaller scale. The larger, more lucrative projects remain on the horizon, leaving studios in a holding pattern of anticipation and preparation.

Simply too many “what ifs”.

Financial Strains and Operational Challenges

The financial and operational impact of the strike on VFX studios cannot be overstated. Many studios expanded rapidly during the boom times, taking on considerable debt with the expectation of continuous growth. Mergers. Private equity acquisitions. Cheap money.

Now, faced with the reality of the strike's prolonged effects, these studios find themselves struggling to "pay the mortgage." The inevitable result has been a scaling back of teams—far more than many would have preferred—to maintain solvency.

This contraction comes at a time when, ideally, a VFX studio would be juggling multiple projects at various stages of post-production: early layout and tracking, mid-production "getting 'er done" phases, and the final stages of polish. This balanced workflow allows for efficient resource allocation and keeps all departments actively engaged.

The Great Ramp Up: A Double-Edged Sword

The looming ramp-up in production, while a light at the end of the tunnel for many, presents its own set of challenges. There's a palpable concern among industry professionals that when production does resume in earnest, it will do so all at once. This overlap risks overwhelming the early stages of production while leaving downstream departments idle, awaiting their turn in the production pipeline.

This scenario could lead to significant cash flow and logistical challenges for VFX studios: When to hire? How long will the ramp-up last? What about training and leadership? The analogy that "you can't just spin up a band overnight and expect them to play great music" aptly describes the dilemma facing studios. Building a cohesive, effective team requires time—time for training, for meshing as a unit, and for leadership to guide the ensemble to peak performance.

VFX is an industry of relationships and collaboration and many links in that chain are broken or missing.

Scenario Planning with 'VFX 'R Us': A Model for Navigating Uncertainty

Enter the fictional studio 'VFX 'R Us,' a stand-in for any studio navigating the post-strike landscape. Utilizing scenario planning tools like whatifi, 'VFX 'R Us' can simulate various "what if" scenarios, from winning bids on major projects like "House of the Dragon," "Stranger Things," and "Orphan Black," to adjusting for project delays and shifts in production schedules.

Whatifi's platform allows for the visual mapping of these scenarios, enabling studios to dynamically plan for different futures. For example, 'VFX 'R Us' can model the financial and staffing implications of all projects beginning simultaneously, providing a clear picture of potential bottlenecks and resource shortages.

Strategic Adaptation: The Key to Success

The ability to make real-time adjustments is crucial. As 'VFX 'R Us' receives updates—be it a delayed project or a new project win—the studio can immediately reassess and adapt its plans. This agility is vital for efficiently navigating the post-strike recovery, ensuring that resources are allocated where they're needed most, without overextending financially or operationally.

Conclusion: Planning for 'The Great Ramp Up'

As the VFX industry stands on the cusp of 'The Great Ramp Up,' the path forward is fraught with both opportunity and challenge. The key to navigating this landscape lies in strategic planning and adaptability. Scenario planning tools like whatifi offer a lifeline, enabling studios to visualize and prepare for multiple futures.

By embracing such tools, studios can move beyond mere survival, strategizing not just for a return to pre-strike levels of production, but for sustainable growth and success in a changed industry landscape. As 'VFX 'R Us' demonstrates, the ability to plan for various scenarios, adapt in real time, and strategically allocate resources will distinguish the studios that thrive from those that merely survive in the post-strike world.

The road ahead for the VFX industry is indeed challenging, but with informed planning and strategic foresight, studios can navigate 'The Great Ramp Up' with confidence, emerging stronger and more resilient in the face of uncertainty.

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