The decentralisation of the VFX industry – and why that’s a good thing

Article by Jon Mason, Co-founder & CEO of Hotspring 

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Decentralisation is a popular buzzword; it’s taken the financial world by storm and it’s now starting to crop up in other industries as well. In itself, it implies the distribution of functions and powers from the few, to the many. It is by no means a new concept, but the digital revolution of our times has taken it to a whole different level; just think about the proliferation of cryptocurrencies, and NFTs entering the mainstream conversation. But how does it manifest in the film and VFX space, and how is it changing the landscape? 

Where we are now – shifting practices 

The most obvious characteristic is the growing number of small and mid-size studios entering the playing field: according to Global Newswire, the animation and VFX market is growing at the rate of 2-3% on a yearly basis. The key differentiator here is that these boutique businesses are able to bid on big projects right from the moment they open their doors. On the flip side, larger, established studios are facing more competition than ever before. 

These new studios are disrupting the scene by using a business model that is the direct opposite of the traditional one. Powered by emerging technologies, its efficiency is rooted in decentralisation. This shift is having a ripple effect on the film industry as a whole, affecting production, distribution, and consumption. 

In VFX specifically, one of the main instigators has been the drop in the price of equipment. The kit needed to produce quality content has become cheaper and the digital and cloud technologies have streamlined the production process itself. This can render the large infrastructures and end-to-end pipelines unnecessary, turning what used to be the biggest advantage into a liability. While rent has been rising steadily in recent years, the migration of pipelines to the cloud reduces geographical importance – it’s no longer indispensable to have a big studio lot for shooting, or to live in one of the traditional hubs in order to succeed in the industry. 

Rising tide of change 

These key factors have set in motion an industry-wide shift towards decentralisation which – while still in its infancy – is already rewriting the rulebook. The pandemic undeniably contributed to the acceleration of this process, as studios worldwide were forced to transition into working remotely. Now, opting for a remote or hybrid working setup for the long-term is more common. 

Not having to be present at the premises has also been a real game changer; it opened up a global pool of talent, providing opportunities for artists all over the world. The decentralised pipeline is flexible by nature, making it a natural fit for remote work – enabled by cloud technology, work can be accessed and shared securely, without geographical constraints. This means that smaller studios can retain a lean core team of artists but still work on big projects by scaling up and collaborating with external talent, as needed. 

The workflow itself is also morphing; it’s becoming more iterative and modular as opposed to the traditionally favoured waterfall style. Having to reimagine legacy workflows is encouraging further experimentation with tools like Shotgrid and Syncsketch. Pre-pandemic, 34% of VFX industry employees stated that they felt the biggest obstacle was their technology – a study by Escape Technology found. In an effort to recreate the office environment, many studios are exploring previously untapped features that enhance remote collaboration. 

As demand for end-to-end production pipelines drops, the power dynamics are also shifting with it. Decentralisation puts creatives and operators in the driver’s seat. Finding people who share the same vision is being prioritised over the financial aspect, because the decentralised model requires substantially smaller upfront investment. As the power of decision-making is handed over to the artists, new opportunities arise for the more experienced to strike out on their own and establish their own companies. On a macro level, the diversification of the industry is likely to lead to a better, more inclusive culture. 

The flip side of the coin 

Such substantial changes cannot occur overnight; big studios are still fully booked for jobs, and some still view remote working as a temporary blip due to extreme circumstances. In fact, there is a backlog to contend with at the moment when it comes to production, and demand for content is growing by the day.  

Arguably, we have yet to see how far a decentralised business model can go, as we’re at the very beginning of the adoption curve. More importantly, the question remains: how can we ensure this new model stays sustainable in the long run, and the trend becomes a permanent change? There are multiple working theories but making sure the increased competition won’t be turned into a race to the bottom when it comes to margins will be key. This can be achieved by focusing on building networks, or by combining the traditional framework with the new workflow.  

Decentralisation is not necessarily an all or nothing choice but more of a sliding scale, and it’s up to the studios and artists to decide where they want to fall on the spectrum. The loss of stability that being an entrepreneur can bring may not be the most desirable option for some. Nevertheless, having the option to try it on for size offers more flexibility to the individual. 

Remote access is a cornerstone of the new model and there are lots of advantages. However, it is also a double-edged sword from an educational point of view. Sitting and working next to a master of the craft has been the best way to learn the tricks of the trade for a long time. It’s quite a challenge to recreate that learning environment at a distance. Similarly, retaining that inspirational spark that happens when sitting in the same room and talking about a project internally might prove difficult at first.  

These challenges are part and parcel of a transitory period, and as innovative ways of teaching and collaborating are being developed, it’s a task for the future to find the route that yields the most value – which might not be the same for everyone. There’s an abundance of resources to be found online, so leveraging that can give junior artists an edge. 

Growing pains are always part of any significant change, but they also bring about new opportunities, and avenues to explore. This is a period of experimentation, so thinking outside the box and looking outside one’s regular client base will help encourage innovation and strengthen businesses. Predicting the future is a tricky business but based on current trends, decentralisation is here to stay, and we can expect it to become more and more mainstream as we continue to navigate the shifting landscape. 

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Article by Jon Mason, Co-founder & CEO of Hotspring