Our industry is facing a very serious time. The collapse of Technicolor and its flagship VFX house MPC is a sobering reminder of the instability plaguing the visual effects industry. While external factors such as the post-COVID slowdown, the impact of industry strikes, and cash flow challenges were cited as contributing factors, many insiders also argue that years of financial mismanagement may have played a significant role. Technicolor had already been struggling, having filed for bankruptcy protection in 2020 and undergone multiple restructurings. Despite attempts to consolidate its brands and pivot to new strategies, the company failed to secure long-term financial stability.The sudden impact of MPC, a major player responsible for high-profile projects such as Mufasa: The Lion King, has left thousands of artists without work and disrupted ongoing film productions, highlighting the precarious nature of employment in VFX. This first surfaced when Technicolor notified its U.S. employees last week that it would be required to cease our U.S. operations, including studios The Mill, MPC, Mikros Animation, and Technicolor Games. Companies such as The Mill have been shining lights of VFX mastery for years and are incredibly well regarded in the industry.Beyond Technicolors specific challenges, the broader VFX industry continues to grapple with systemic issues, including cost-cutting pressures, exploitative working conditions, and an unsustainable business model. VFX houses often operate on razor-thin margins, competing in a race to the bottom due to studios demand for cheaper and faster work. This results in a cycle of overwork, burnout, and, in many cases, eventual bankruptcy, as seen with Rhythm & Hues in 2013 and now at Technicolor. The reliance on tax incentives and outsourcing further complicates matters, making VFX work highly unstable. With major vendors collapsing and industry workers facing continued uncertainty, many are calling for structural changes, including better contracts, collective bargaining, and a more sustainable production pipeline. Without meaningful reform, the industry risks seeing more historic names disappear and countless skilled artists move to other fields.Last year, Quebecs animation industry was decimated, following the strikes in Hollywood and Quebecs tax credit reduction. Over half of all animation and VFX jobs in the Canadian province, including in the production hub of Montreal, have been lost since January 1, 2023, according to the Quebec Film and Television Council (QFTC). Even after this weeks episode was recorded, today Walt Disney Animation Studios has laid off staff from its Vancouver studio as a result of a shift in business strategy from a focus on theatrical features complemented by short-form streaming content, a Disney spokesperson is reported saying, This means the studio is no longer making long-form content for Disney+. It seems each day brings more bad news.Scott RossScott RossScott Ross was a key manager at George Lucas companies in the 80s and in 90s he co-founded Digital Domain, along with James Cameron and Stan Winston.He has a new book out UPSTART: The Digital Film Revolution Managing the UnManageable. In this special episode, we spoke to Ross to gain a different perspective on the massive structural changes in VFX and the company failures rocking our industry.In the 1980s, Ross was general manager of ILM and under his leadership, ILM won five Academy Awards for Best Visual Effects (Who Framed Roger Rabbit, Innerspace, Terminator 2: Judgment Day, The Abyss, Death Becomes Her). The company re-organized in 1991 and Ross was named senior vice president of the LucasArts Entertainment Company, which comprised Skywalker Sound, LucasArts Commercial Productions, LucasArts Attractions, EditDroid/SoundDroid and ILM.Under Ross direction, from 1993 to 2006, Digital Domain garnered two Academy Awards and three nominations, receiving its first Oscar in 1997 for the ground-breaking visual effects in Titanic. That was followed by a second Oscar for What Dreams May Come. Digital Domain received additional nominations forTrue Lies,Apollo 13andI, Robot and won three Scientific and Technical Academy Awards for its proprietary software, including the birth of Nuke (now Foundry).* The highlight image for this fxpodcast story is the Pirate flag that flew once over DD headquarters in Vencie California.Dont forget to subscribe to both the VFXShow and the fxpodcast to get both of our most popular podcasts.This week in space, our lineup is:Matt Wallin * @mattwallin www.mattwallin.com.Follow Matt on Mastodon: @[emailprotected]Mike Seymour @mikeseymour. www.fxguide.com. + @mikeseymourWith special guest, Scott Ross.(Jason Diamond was on location filming this week but he will be back next week).Special thanks to Matt Wallin for the editing & production of the show with help from Jim Shen.