The Hollywood writers’ and actors’ strikes of 2023 significantly impacted the VFX industry, creating a challenging environment for studios reliant on scripted projects. As these productions came to a halt, VFX facilities faced the daunting task of minimizing staff losses while trying to stay operational. Unfortunately, many companies succumbed to the strain and closed, leaving numerous employees without jobs and freelancers grappling with unprecedented unemployment levels.

Neil Hatton, Chief Executive of the UK Screen Alliance, noted the troubling figures: “During Covid, we estimate that 23 percent of jobs were lost, either due to redundancy or non-renewal of contracts. We believe the impact from the strikes has been more severe, as there was no furlough support this time, potentially leading to job losses of up to 40 percent.”

Despite the strikes concluding before Christmas, the resumption of production has been fraught with logistical challenges, leaving the industry experiencing a prolonged aftermath of the pause. Racheal Penfold, co-founder and director of boutique studio One of Us, remarked that the situation has created an atypical gap in their workflow, particularly challenging for an independent studio.

One of Us, known for its work on the sci-fi drama Constellation, has found it necessary to implement cost-cutting measures to stay viable. Penfold stated, “We have had to reduce our losses to a manageable level.” The company has collaborated closely with staff, many of whom have agreed to reduce hours or take unpaid leave, though redundancies were also made.

Jocelin Capper, General Manager of Cinesite London, explained that the impact of the strikes has had varying effects on the company and its peers, with VFX and Animation facing the most prolonged challenges. She noted that the VFX sector, being at the latter stages of the production process, has had to decrease crew sizes in response to the diminished volume of work.

In the wake of the strikes, Cinesite sought to manage costs efficiently. Capper commented on the consolidation of facilities within the Cinesite group, mentioning that Imaginarium Studios relocated from Ealing Studios to Cinesite London. Moreover, some spaces have been rebranded as ‘client space’ to accommodate productions or sister companies.

To offset the adverse effects, Cinesite diversified its revenue streams, launching two new service divisions during the downtime: Immersive, specializing in large-scale art projects with light projections and LED screens, and VIS, which focuses on expanding previs, virtual production, techvis, and postvis services. The VIS team, led by Richard Clarke, who previously oversaw postvis at NVIZ, is expected to generate greater efficiency and value for clients.

As some VFX studios adapt to the current market conditions, certain companies are only beginning to feel the backlash of the strikes in 2024. Many were engaged in projects that concluded filming prior to the industrial action and maintained sufficient workloads throughout the strike period.

Milk VFX, which expanded its portfolio to include factual projects, was able to secure a partnership for a significant, VFX-heavy production not reliant on SAG or WGA talent. Neil Roche, Deputy CCO and VFX Supervisor, stated, “Despite the impact of the strike, the diversification into factual content has helped us maintain operations.”

Looking ahead, signs of recovery are emerging as stalled productions resume and new projects are initiated. However, complexities remain as productions affected by the strikes encounter logistical challenges in regaining former momentum. The once-turbulent landscape has transformed, with production needs evolving alongside shifts in audience engagement and economic pressures.

Capper acknowledged that the strike represented only one facet of a broader industry slowdown, exacerbated by reduced advertising revenues impacting commissioning across various genres. Additional challenges, such as struggles within children’s TV and budget cuts at entities like the BBC, have contributed to an environment that remains tense despite signs of light at the end of the tunnel for scripted productions.

Freelancers have endured significant hardship, with many stepping away from the industry altogether, creating potential future skill shortages. “The strikes have left many talented artists out of work, necessitating time to realign the industry’s gears once more,” Capper explained.

As 2024 approaches, studios and streaming platforms must recalibrate their strategies to align with a new economic reality, adapting to the agreements established to conclude the industrial action. Expectations for content spending are diverse; while platforms like Amazon, Apple, and Comcast may increase expenditures, many studios will exercise tighter budgetary controls. Netflix anticipates spending to outstrip prior forecasts due to recent financial performance.

In closing, Jonathan Bronfman, CEO at MARZ, added, “I don’t believe the industry will return to its former state. A slow recovery is anticipated for 2024 as the landscape reshapes.” He highlighted the role of technology, particularly AI, in the transition, stating that it may push traditional methods to evolve.

In summary, while signs of recovery suggest renewed focus on content, the VFX industry remains in a state of adaptation, facing challenges that will shape its future trajectory.

Persons: Neil Hatton, Racheal Penfold, Jocelin Capper, Richard Clarke, Neil Roche, Jonathan Bronfman
Company Names: UK Screen Alliance, One of Us, Cinesite, Imaginarium Studios, Milk VFX, MARZ
Titles: Constellation

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