VFX in Eastern Europe — Is It a Threat?

If you have the QuickTime plug-in, you can view clips of OREO and fx3x's vfx showreels by simply clicking the images.

The entire world seems to have gotten caught up in the excitement and market opportunities that advancing trends in vfx represent. With rapidly spreading high-speed Internet now blanketing much of the world, vfx represents an unusual economic opportunity for depressed and developing regions. Although there is tremendous activity all over the globe, Im focusing on Central and Eastern Europe. Over the past few years, Ive been working with fmx, the Digital Content and Visual FX conference held annually in Stuttgart, Germany. This has given me an opportunity to chat with a number studio people from these parts of the world and Ive been impressed. Read on and youll discover a little bit about what they offer.

Ive talked with a wide range of vfx in Eastern Europe and I could understand both their enthusiasm and frustration. Some would like to get work from Hollywood and others would not, but all want to bring in enough work to keep their people busy. All seem to have a passion about the work. The successful ones have built beautiful facilities, installed state-of-the-art high-speed Internet and use all the computer power and software youd expect in a western studio. Others do the best they can, relying on superior artistic talent and sometimes bootleg software. It is early, but conditions are improving and vfx sparks are flaring in places you may not have heard of. Fortunately, all of the houses in this report and most houses in general speak fair to excellent English. Im pleased to share with you some of whats going on and the thoughts and feelings of our colleagues in Central and Eastern Europe.

My first big lesson was about the difference between Central and Eastern Europe. Heres how Martin Hudak of OREO in Slovakia explains it:

If you divide Europe into two pieces (Western and Eastern), Slovakia belongs to Eastern. But really, our market is more Central Europe, in which I must include Czech Republic, Germany, Austria and Poland, which are countries next to us (except Germany), geographically in the western part of Europe.

When I buy the software localized to Slovakia, I will get CE version (Central Europe), fonts and so on... Not completely clear on the exact definition, I went to Wikipedia and found The understanding of the concept of Central Europe varies considerably from nation to nation. So I use the term loosely here.

What I Found

I was curious exactly what kinds of vfx these places were doing and I found a wide range. I discovered relatively high quality work in 3D digital character design and all sorts of other interesting vfx.

Sometimes a little short on fancy equipment and software, some houses rely on their artistry in compositing and pure 3D. So far theyre not doing a lot of the really advanced fluid sim (such as ILM and Scanline create with their proprietary software), and in-house R&D is fairly rare. Much of the in-house development seems to be in the realms of project management and video communications. However, some houses have developed sophisticated plug-ins for Adobe, Autodesk and Softimage applications. They have time and distance delivery obstacles similar to houses in New Zealand and Australia. Both seem to have found workable solutions. The spread of high-speed Internet is certainly providing opportunity.

Vfx People of Eastern Europe And Their Houses

In general, the smaller houses service fairly local areas while some of the larger ones have a global market area reaching from Japan to the U.S. and beyond. I think its important to get a feel for these people and their situations.

Mindaugas Jokûbaitis, ceo, DAMI DIGITAL, Kaunas, Lithuania

You can tell from their excellent web graphics that DAMI DIGITAL has a flare for design. They bill themselves as a digital design company with a broad range of services. Able to produce everything from reasonably sophisticated film vfx to game animations, they often create a films posters and web site. Among their repertory are 3D previs, architectural visualization, TV commercials, Flash advertisement and videography.

Jokûbaitis is their fearless leader. He says their work comes in mainly from local companies and Europe in general. However, we are striving to develop more of an international market. We particularly like computer graphics integration with the real-world. Were currently working on a car crash sequence. Some of our vfx team members are also involved in game development as well. The key at DAMI seems to be that the workers are flexible, honing multiple talents the company can leverage to stay afloat and grow.

Martin Hudak, postproduction manager and motion graphics designer, OREO, Bratislava, Slovakia

Hudak suggests that most of their work comes from Central Europe, especially Slovakia, Austria, Poland and the Czech Republic. They like to take on whole projects involving every stage of film and television development: We are making the whole jobs including main idea, production and post-production. In that case we can offer concepts where we can use our best skills and we do not offer something we cannot make. This is good to know before starting to answer the rest.

Theyre very careful about not being able to deliver what they promise. Their goal is to get the job done right within the budget and wide range of skills that they have in-house. They have that rare in-house blend of people with art and technology skills that gives them an edge.

We have made a lot of 3D animations based on synthetic generation of particles and procedural geometry. Actually we are focused on procedural principles instead of hand jobs. We do matte creation, color grading, particle behaviors, image and time warping effects as well. In the production process we have used basic types of controlled motion cameras, grips and the best: Our time-track multi-lens camera system for matrix bullet-time effects. Clearly they are a sophisticated operation with a fair amount of Hollywood-type equipment.

Dave Rosenbaum, exec producer of U.S. Filming for SIA (Screen Imagination Agency) and CAMERA Ent., Sophia, Bulgaria

My relationship with the studio began 1999 when I produced and directed The Picture of Dorian Gray. The studio has been very active and prolific in Europe since. We're getting ready for Bulgaria's inclusion in the E.U. in 2007, the spark of which will ignite SIA and CAMERA and a great vfx fire will spread through the entertainment world!

Our work consists mainly of organic and technical vfx and animation, storyboarding, concept design, 3D modeling, texturing, lighting, match moving, mat painting, 2D compositing, 2D tracking, color correction, set extension, multiplication of crowds and 2K finishing of any given footage or still images. We work with most common formats and color depths as 4K, 2K, HD, SD, 16-bit, 10-bit, 8-bit color depth.

This appears to be another reasonably sophisticated operation. But then they have competition nearby driving them.

Scott Coulter, Worldwide FX, Sophia, Bulgaria

Back in 2001 Coulter, a Hollywood vfx veteran, went to Sophia, Bulgaria, and founded Worldwide FX. He did it under the wing of NuImage, the B- picture production company we all know and love. The idea was to capitalize on the much lower production and labor costs in Bulgaria to improve production values on their low budget pictures. NuImage has made a science of creating profitable pictures on short budgets. Over the years their budgets have grown and so has their production capacity. In Sophia, not far from WWFX, was one of Europes venerable backlot studios, Boyana the Bulgarian State Studio. NuImage is in the process of buying and renovating Boyana studios under Bulgarias privatization initiative, but it has not been going well. The privatization committee has been dragging their feet, apparently waiting for manna to fall from the skies. As you read this NuImage is renting the studio and WWFX is moving in lock, stock and barrel. Theyll be working closely with the major new production studio that NuImage is spending millions to create there under the guidance of producer David Varot.

Coulter who maintains an LA residence where he spends a month or two their each year tells me about his market area: Most of our work comes from America. Probably because I am from Hollywood, and my connections are from there. However, more and more interest is coming from across Europe, so things are changing rapidly.

Having a close relationship with NuImage/Millennium Pictures, WWFX gets a steady flow of work out of Hollywood and it runs the gamut from creatures to science fiction epic sequences to very subtle cosmetic work. They have to work cheap while maintaining a very high level of production quality. Coulter adds hed like to start getting in music videos and commercials, but the turn around on them is much shorter than for feature films. You do need a bit more time while working over here but its worth it. I should have asked him why I think I may know why. Coulter says he dislikes the way Hollywood exploits its vfx workers, so he makes sure that his people work overtime only when absolutely necessary. Apparently his people stay home most weekends and get to have dinner with their families on workdays. What a revolutionary concept. As you know, most vfx people in the U.S. work 80-hour weeks and have little or no time for a life outside the studio or so it seems.

Zvonimir Miksic, vfx producer, Unique Ent., Sisak, Croatia

Miksic says the outfit consists of him and eight other artists, a bunch of computers and a few VTRs. Their vfx work comes primarily from Eastern Europe, but they also have clients in Western Europe, Asia and also in the U.S.

He started with optical effects and miniatures back in the 90s. Building on those skills he gradually learned the skills necessary to transfer his talent to 3D. Now his team models characters and environments in 3D using 3ds Max and compositing and vfx with After Effects. Theyre also heavily into animation, compositing and broadcast graphics and vfx. Because they work very cheaply and do good work, they represent an interesting possibility for VLB (Very Low Budget) producers all over the globe. Of course, they have limited capacity at the moment, so its first come first served.

We like lower budget productions with less demanding vfx. Integrating 3D elements into live action is fun for us right now and were enjoying developing real-time graphics for videogames now as well. Theyve also developed their own realtime game engine, which they hope will open new venues to them.

Miksic suggests they can produce very high quality vfx for smaller films on a tight budget. Id say thats a niche worth investigating. They do most of their content delivery via FTP. He believes his people may be a bit underpaid by local standards, even though most of their work is international.

Mileta Postic, professor of animation at the Academy of Arts, Novi Sad, Serbia

A number of commercial vfx outfits are associated with universities. I met Postic while lecturing in Stuttgart. I run an animation and visual effects program at the Academy of Arts, Novi Sad. On the side we do a fair amount of commercial work. Most of the work comes from Serbia itself, but some of it comes Western Europe, mostly England and Germany. London and Germany seem to be the places that actually commission most work.

We have done little bit of 2D animation, little bit of Flash animation, A lot of 3D animation, and a lot of compositing. Most of the work is 3D combined with compositing. We have also done some general post-production and motion design. Most work is TV ads, music videos and some are effects for feature films. He also wants to start developing character animation as well. He has a few ideas of his own on producing a humorous animated TV series with interesting animated characters.

Postic would rather have a bit more input and creative control of his projects. He also prefers to work more locally because it affords more opportunity for working one on one with the director.

This marriage of university and vfx house seems to work fairly well, with the students getting hands on experience and the program generating money to keep the program afloat. Since training extremely important to maintaining the flow of qualified vfx artists, his program is serving an important roll.

Andra Logar, co-founder and ceo Third Frame Studios, Kranj, Slovenia

Third Frame Studios sees themselves as a full service content creator providing advanced 3D animation libraries for mobile operators, advanced broadcast 3D graphics, compositing, visual studio content creation and interactive Internet solutions. They call themselves a boutique animation company.

As is typical for Eastern Europe, theyve had to diversify their services using their central talent pool to meet the content needs of a wide range of clients. They are pursuing an international market to help assure their continued existence. Basically, Third Frame is small group of technical engineers, artists, art and creative directors with their own team of programmers, all striving to stay on the cutting edge. Although vfx is not their main focus, they have the talent and facilities to do a wide range of work; but not for film, yet.

Since our vfx department is relatively small, we are pretty much focused on motion graphics and vfx graphics for TV stations, TV commercials and mobile content. Of course, we would like to shift from that to motion pictures, but we will not refocus until we enlarge our team and facilities.

Our biggest clients are in western Europe, especially Scandinavia, a few of them are American companies and of course, we offer service to the local advertising agencies and other as well. For the future focus, we will probably try to be more active in Middle Eastern countries and Eastern Europe.

Monika Pavlíčková, sales director, Universal Production Partners, Prague, CZ

The company has been around since 1994. By some standards UPP is now one of the largest and most versatile visual effects and post-production houses in Central Europe. Its a high-end shop specializing in quality post and vfx in film and broadcast.

Boasting superb facilities and state-of-the-art technology, they maintain a diverse team of imaginative and creative people. With their own back lot and broad range of services, theyre often used by western production companies. Not as inexpensive as smaller studios further east, they compete via their high-end capabilities and services. Their Central Europe location also places them in close proximity to many excellent shooting locations. Its a one-stop shop with quality vfx capability.

Pavlí?ková says they work with the big boys: Twentieth Century Fox, Sony Pictures TV, Warner Independent Pictures, Disney, Mirage and other U.S. studios. However, theyre proud of their local presence in Central Europe. They proudly list their rates on their website. Though not cheap by Eastern European standards, theyre very reasonable by Hollywood standards.

They can provide advanced vfx services and even have 2K/4K DI workflow. They have substantial 2D and 3D vfx capability as well.

The secret to their success with Hollywood is that theyve been able to establish themselves as a highly reliable, efficient and cost effective studio. Clearly just being cost effective is not enough. Completion bond companies look for a serious track record. Several houses in Central and Eastern Europe qualify, and this is one of them.

fx3x, Skopje Macedonia, and Belgrade, Serbia

Founded by Kristijan Danilovski and Milivoje Gorgevic, fx3x is endeavoring to become the most exciting visual fx company in the Balkans. Theyve been growing steadily and are now one of the most significant studios in the region. According to Danilovski, We are striving, through utilization of the latest technology, to provide new and improving solutions in vfx, 3D character animation and broadcast video.

Like Worldwide FX, fx3x has invested in human infrastructure. For the past seven years, theyve been schooling young people in the arts they need. Such aggressive outreach is necessary where expensive software and hardware needed to learn the field are in short supply. fx3x is doing their part to provide the needed resources to train the future flow of talent. They now have a complete in-house training facility for 3D animation and compositing. Young people who learn with them are free to take jobs elsewhere in the region, especially within the complex.

Collaborative Media Group (CMG), Skopje, Macedonia

CMG is an important provider of digital entertainment products and services to Southeast Europe. They provide a broad range of production services in support of film, TV and interactive media production, taking projects from pre-production, through production and post-production. Naturally vfx is one of those services.

Collaborative Media Group, was founded in 2005, from the 14-member companies of MADE, the Macedonian Assn. of Digital Ent. Each of them has more than 10 years experience in the digital entertainment industry in Macedonia. They are K-15 Production, Videolab, Axis, Vertigo, Semos Multimedia, Unet Interactive, Sector Film, Kinooko Production, Partysans Production, Skopje Film, Kan Studio, Enterprize, Gejzer Film and Fi Cons.

All strive to maintain an English-speaking work environment compatible with the U.S. and the EU. Theyve all agreed to maintain corporate cultures that emphasize such things as professionalism and client satisfaction. In terms of attracting Hollywood projects, Jovica Panovski, vfx supervisor at CMG, says, The fact that we are new to the vfx market causes some people in Hollywood to hesitate. We need to prove ourselves to them. Hollywood also has a well-established workflow, terminology, and standards and practices that an off-continent organization such as ours must learn to work with. Given the opportunity, we believe we are very competent and can effectively compete.

This is similar to what I hear from other vfx supervisors all over Central and Eastern Europe. Its like a Catch-22. You can work with us only if weve already worked with you successfully. Its a circular drive with no obvious entrance.

Its Complicated

With talent, cheap labor, great equipment and software and a growing infrastructure one might assume that Eastern and Central Europe are a big threat to U.S. vfx houses. Id have to say yes and no. Large film productions will most likely keep their vfx work on local turf. Sure, we are seeing certain sequences being sent abroad, but not the money shots. Yes, complex ocean and fluid shots often go abroad to Germany, but thats a special case. Overall, complex shots are going to stay close to home and theyll be expensive. Our best houses pay their top artists extremely well, sometimes three to four times the average for their area. Thats the same as youll find in Eastern Europe where it comes out to about 300 euros a week, as opposed to the equivalent of about 800-1,000 euros or more a week here.

I believe the rise of vfx in Eastern Europe is ultimately a positive trend. It gives small production companies an opportunity to achieve high production values on tight budgets. It may take longer and be more difficult to manage, with early morning phone conferences, but the job gets done. Completion bond companies are looking to the east and have a few solid houses that they trust. More will surely come. What small impact this might have on U.S. houses is far outweighed by the double hit of helping the local economic recovery and providing cheap vfx possibilities for U.S. and world producers.

Will U.S. Salaries Have to Go Down in Order to Compete?

Film production houses in Prague used to be dirt cheap, but theyve gotten so good and reliable that theyve been raising their prices and paying people more. The entire Prague area is in rapid economic growth that is raising standards of living for many people. Its not just the vfx and animation industries. U.S. salaries will set the pace. As more and more highly paid work flows to Central and Eastern European houses, salaries will rise there and they will continue to rise in the U.S. as well. So fear not. Its all about industry growth.

Peter Plantec is a best-selling author, animator and virtual human designer. He wrote The Caligari trueSpace2 Bible, the first 3D animation book specifically written for artists. He lives in the high country near Aspen, Colorado. Peters latest book, Virtual Humans>, is a five star selection at Amazon after many reviews.