VFX booming in B.C., but post shops feel the recession

The Vancouver VFX business is booming, with U.S. studios bringing high-profile effects projects to the province.

‘The studios see Vancouver as a triple threat,’ says VFX executive producer Shawn Walsh from Image Engine, the shop that created the aliens in the recently released hit District 9. ‘There’s the VFX tax incentive, the time zone parity with L.A., and the talent base and track record of producing high-quality VFX on par with anywhere else in the world.’

Image Engine is now creating effects on two Dark Castle Films/Warner Bros. projects – The Factory, starring John Cusack, and the comic-book adaptation The Losers – as well as Law Abiding Citizen, starring Jamie Foxx and Gerard Butler.

‘We have been incredibly busy – our facility has been full for the past 18 months,’ says Dennis Hoffman, GM of Deluxe’s VFX division CIS Vancouver, which is working on Clint Eastwood’s Invictus, Columbia Pictures’ horror comedy Zombieland, and Salt, starring Angelina Jolie. Other recent projects at CIS include Angels & Demons and G.I. Joe.

However, the post-production sector – which is dependent on projects shooting in B.C. – has faced a tough first half of 2009. There has been a marked downturn in domestic production, and without any tax incentive to keep post in Vancouver, American producers typically ‘shoot and ship,’ with post completed in L.A.

‘Spring and early summer was incredibly challenging,’ admits Finale Editworks president Don Thompson. ‘MOWs and direct-to-DVD projects typically finish in Vancouver, but there has been a serious drop-off in these projects. Things are looking up. The fall is going to be much busier.’

Finale’s latest projects include posting a documentary on Darwin for CBC and Screen Australia produced by Victoria’s Ferns Productions, and the Nickelodeon TV series The Troop; along with editorial support on the Universal feature The Death and Life of Charlie St. Cloud and the Brightlight features Final Storm and Janjaweed.

Michelle Grady, VP and GM of Technicolor Creative Services, also expects the second half of 2009 to show an improvement for the local post sector.

‘There is an influx of TV production this fall,’ she says. Technicolor’s projects include dailies on the U.S. series Fringe, Supernatural, Psych and V, and full post on the new Brent Butt series Hiccups for CTV.

‘Our TV work is up 60 percent over last year at this time, while we are down the same amount in features,’ says Grady.

William Baldwin, VP sales at Deluxe Vancouver, says their volume is on par with this time last year. While domestic product is down, a solid slate of U.S. features has made up the difference, he says.

Deluxe is posting the ABC/CTV series Defying Gravity, as well as Smallville and Stargate Universe. In addition, it is doing dailies on the latest Twilight movie Eclipse and Fox 2000’s Percy Jackson & the Olympians, and also worked on the recently shot MGM movie Hot Tub Time Machine.

The Vancouver VFX business is booming in part because of the 15% Digital Animation or Visual Effects tax credit that is not tied to shooting in the province.

Technicolor’s VFX division, Moving Picture Company Vancouver, is working on 150 shots on Percy Jackson and 40 shots on Fox 2000’s Ramona and Beezus, and recently completed work on Disney’s The Surrogate and Warner’s Watchmen.

‘It is an exciting time for VFX in Vancouver, especially in terms of feature film,’ says Grady.

Anthem Visual Effects is doing post and VFX on the second season of the Syfy/Space TV series Sanctuary, as well as 350 shots on the four-hour Syfy miniseries Alice, and 100 shots on Tucker & Dale vs. Evil, a black comedy/horror shooting in Calgary.

Anthem was recently nominated for an Emmy for its VFX work on season one of Sanctuary.

‘We anticipate a total of 3,000 VFX shots for season two of Sanctuary,’ says Anthem president Lee Wilson. ‘In one episode alone we had 469 VFX shots, with some of the scenes running four minutes long in a fully created environment. I don’t think there’s anything else on TV has that many effects shots per episode.’

Northwest Imaging & FX, which does post as well as VFX, has been busy doing a variety of video editing, animation and special effects contracts relating to the 2010 Winter Olympics, as well as animation, VFX and finishing on Blood, a sci-fi feature produced Pacific Gold Entertainment.

President Alex Tkach says the post side of the business is challenging. ‘With the Canadian dollar where it is, it’s hard for American producers to justify staying here for three months and incurring post costs,’ says Tkach.

‘It’s basically the same price to do post in L.A. When the Canadian dollar was at 62 cents they stayed here.’

In January 2008, Deluxe entered the B.C. market with the purchase of Rainmaker’s post and VFX operations. With two big international players in town, some post houses are concerned there isn’t enough work to go around.

‘There is going to be consolidation moving forward,’ says Tkach. ‘Technicolor and Deluxe get a lion’s share of the work just based on their size and having alternate locations, so the post work can continue in different cities.’

Digital Film Central co-founder James Tocher says the shop has found its niche in the crowded B.C. market by specializing in digital intermediary work. Plus, it is reeling in a large component of its work from the international community.

‘There isn’t enough post work to go around in Vancouver, so we have expanded our client base internationally,’ says Tocher. ‘About half of our clients are outside this city. We have built a reputation among independent filmmakers internationally.’

The introduction of all-spend tax credits in Ontario and Quebec is another cause for concern, as these new rebates include shooting and post expenditures.

‘Post work is so dependent on projects shooting in this province, and already it is hard enough to keep post here without the added competition from Ontario and Quebec,’ says Grady.

The upcoming Winter Olympics is also expected to have a negative impact.

‘It will be a challenge, permitting and shooting in Vancouver will be difficult,’ says Baldwin. ‘It is going to cause a downturn in production, so it is a concern.’