Fuel VFX goes into voluntary administration
August 28 2012, 11:51 am | | 50 Comments
Major Sydney visual effects post production company Fuel VFX has gone into voluntary administration.
The company’s directors have advised administrators Jirsch Sutherland, that, being independent, the company has struggled to navigate the down-turn in work that is affecting many visual effects companies worldwide at the moment. The voluntary administration process has been called on by the directors as a way of preserving and financially restructuring the business.
In addition to the directors’ financial restructuring attempts, the administrators are seeking expressions of interest in the business and assets of the company as a going concern.
50 Comments
A very sad day for the industry and for all of the people at FUEL who have been a major force in post production in the city over a very long time.
Awesome company, awesome people. Such a huge, huge shame for post production and vfx industry!!!
Thanks Prometheus.
Sad news.
A lovely company with great people. Sad news. Lets hope that they can recover with some help from the rest of the industry.
Great company, talented people, great work. This is so frustrating, where are the 100 highly skilled Fuel people going to work? Why aren’t we hearing about advertising’s redundancies in main stream press? Hopefully these clever people get out of this business into something with long term prospects. TV advertising is at crisis point in terms of sustainability.
Very sad for some great people. This could happen to any number of industry businesses at present and my heart goes out to everyone.
Just shocking. Gives us an understanding on the market at the moment. Who’s next?
Awesome people. Awesome shop. Bloody shame. My best to all at Kings Street.
great, the more low budget crap thats getting churned out by small content companies killing the true artists. Death to the 5D and death to Youtube. To hell with virals…
High interest rates, a ridiculous exchange rate and a corporate sector that is screwing production to the wall. Another 100 people out of work.
Faster than I expected, but Deluxe have got it all now, pretty much. A big week in the post industry.
Very sad day. Everyone at Fuel should hold their heads high for fighting the good fight for so long and being instrumental in making so many great things happen over the years.
Good luck to you all on your next adventures… make some lemonade!
Tis a damn shame!
These guys have always churned out top level work and kept the industry in healthy competition and striving for better results!
Am truly sorry to hear this guys.
What does this mean?
Is everyone there out of a job?
Very sad indeed. Fuel has been instrumental in breaking new ground and setting high standards for post production for such a long time. Breaks my heart…
Sad, sad announcement. Hopefully the professionals in the industry rescue this company. Too many talented people that all will eventually end up leaving our shores if new investors are not found.
So now we have deluxe (global) , fsm (hopefully they are still an independent) and then the undercutting under experienced no craft cheap places.
Yes, YouTube and web banners killed the true craftsmen of the film making world we knew.
and of course AL.
there is also FIN , ALT and Heckler
Yes , and those excellent ones. Realises I had forgotten them plus resolution after submitting.
HOLY shit.
Worked with them way back in the day on a small job; loved watching them go from strength to strength since. Great guys, great joint.
Hard to fathom given all their great press and hot brand/audio associations of late.
Good luck to all.
Maybe it’s time for advertising agencies and production companies to realise they should stop trying to screw post companies out of the money they deserve for assisting in the creation of work.
It costs money to run post companies and pay artists what they are worth.
Soon they will have no-one left to help them and then Australia will be totally screwed!
This is a great company. Lets all show the administrator our support for FUEL in the hope that they can find an investor and new financial structure.
Lets save FUEL not farewell them. the fights not over yet.
Sydneysider, I think this development is symptomatic of changes in the industry as a whole, and finger pointing to agencies or prod co’s ‘trying to screw post companies out of the money they deserve’ is not exactly fair. We are all in the same boat here, and all have the same agenda. We are all dealing with smaller and smaller budgets, with higher and higher expectations, with additional deliverables being thrown at us without additional funds. So if we ask a post company to work with a smaller budget, it’s only because our budgets have also shrunk. Until someone turns around and says to a client ‘you need more money to achieve this’ the smaller margins and lower budgets will continue. The times have changed. We need to address this as a community. I agree with ‘let’s be positive’, this is an opportunity for everyone; agencies, prod co’s and clients to realise that if you pay peanuts, you get monkeys. In the short term that one stop shop working with a 5D, laptop, final cut pro and after effects that can conceive, shoot, edit and post seems good, but the end result isnt what anyone was expecting. There is a plethora of incredibly experienced and talented individuals out there, many of them at Fuel. Let’s try and support each other in these challenging and interesting times.
I agree with lets be positive. Can all the agencies go to their clients, all who have benefited from the amazing talents of the Fuel family and ask them to throw into a save Fuel fund, so we don’t lose more great Australian talent to overseas companies. Come on lets get on this. SAVE FUEL, we love them and don’t want to see them go.
Breaks my heart to hear this Fuel. The company I work for have always held you in very high regard. Feels like losing a brother up there. Hope y’all get back on your feet and find a way through it.
Production Company, I agree with a lot of your comments about working with smaller budgets.
No doubt it is starting with ‘client service’ inexperienced idiots at agencies who just say yes to clients requests with no understanding of the real costs involved in getting jobs done properly.
Then production companies and post companies have to drop their rates because they will lose clients and opportunities to work.
However, Production Company, you can help the ‘Fuels’ of this world.
Next time you submit a post quote to an agency, don’t try and make a ‘mark-up’ on post if you have to ask a post company to discount their rates.
Look for a margin elsewhere, let the post companies have that extra few thousand and support the post companies, who all save the ass of everyone in the industry time after time!
Otherwise you will just be left with bozos on their laptop and god help all of you then!
This is what happen when you constantly ask for a “favor” I cant tell you how many time I have heard “we have no money for this one, can you help us out” When you constantly do work for no margin, you don’t have a business. I have worked in the post industry for more than 15 years in this country and I am about to pack up and leave for a company overseas. Its a shame, what was once a health industry has been decimated. Lets ask the production companies if they ever do a project without covering their out of pocket expenses?, However they ask the post companies to do it all the time. Shame on them. The real benefit of Fuel was there ability to turn complex work in a short period of time, to a high level of quality. The number of companies with this type of firepower are now few and far between. Every other post company in the industry will be feeling the pain of seeing Fuel go in to administration and wondering how long until they themselves hit the wall.
We are all in the same boat what a croc. Ive never heard such smug ridiculous comments. As a vfx artist working on jobs for you lot ive seen it all. The fact none of you can make a decision and then want to make changes without paying is laughable. Meanwhile many of us are there flogging our guts out and getting no overtime and piss poor pay. Good luck working with the tin pot companies left to pick up the pieces.
Did the the top blokes at FUEL see this coming? At the end of the day, FUEL was a business like any other business? Was the ball dropped on the commercial side at the expense of ‘Hollywood’ movies? What was the business plan? Was having a big ‘cool’ building the right business model? There will be a lot of finger pointing.
The reality is if we can’t make a profit on your animation, effects or post work we can’t run a business. There is a point where we all need to say you know what for that money you can’t have something like what you’ve just seen in the latest Pixar or Michael Bay film.
The problem has been exacerbated by the constant need for companies in this field to re-prove themselves and as a result will take a project on based on the merit of the concept and the worth of the exposure it will bring versus the fact we all need to make a fair profit. If you are in this industry and have proven yourself like Fuel you shouldn’t need to pitch. Make a decision at an agency level to start fixing this industry. You know they are good enough and trust they will do the job and do it fucking well, you don’t need to make them dance for free. Sucking them dry demanding free pitch to prove they are worthy enough to execute their vision on a project that will not cover expenses is a major part of the problem that needs to cease now. If we all just say no to free pitching and treatments the industry would be all the better for it. And that goes for production companies too.
Fingers crossed for you guys, hope you come out the other side.
As agencies have decimated supplier bargaining power, the TVC supply industry is extremely unattractive for investment both in human and technical resource. Add to that further downward pressure on price from offshoring. It’s this simple, an industry that is highly unattractive to investment, folds. So agencies and clients start budgeting in a trip to asia for your post because that is the future. And don’t sit comfortably digital agencies because you are next.
It is incredibly sad to see a company like this fall over, but at the same time it is also a stark reflection on our industry as a whole.
I really think it is time for all the ‘post’ houses in town to work together, rather than trying to undercut each other out of a dollar… otherwise it’s simply a race to the bottom.
We are the only industry that has absolutely no guidelines in place or guild to support/ protect us.
It’s time for CHANGE.
Rather than everyone just sitting around casually saying how “sad” it is, while they reach for a box of Kleenex tissues.
LETS ALL DO SOMETHING TO STOP IT FROM HAPPENING AGAIN.
Otherwise there will be a sudden influx of taxi drivers around town.
Vulture. You should be ashamed. They aren’t dead yet.
Ive worked at a senior level in both production and post over the last 15 years. The evolution in budgets and approach is extreme to say the least. I know producers that I used as mentors 15 years ago who have not upped their fees in that period. Think about that for a second – before the GFC began 5 years ago, the previous 10 years housed the greatest average wage growth, year on year, in Australian history. However Advertising’s supply industries got none of it. No wage growth. No revenue expansion in real terms. And this symptomatic of the post and production industries as a whole.
Why? Well, it’s a bit of a history lesson, so please bear with me…
1. The digital revolution began at about the turn of the century. Flame used to cost a million dollars (in then dollars), and ran on dedicated hardware. You can now get that functionality on a desktop for about a $15k outlay. So, the significant barriers to entry have been removed. However understand that barriers to entry are a key need of business models that rely on infrastructure to uphold their USP.
2. Media fragmentation began in earnest. TV became a smaller slice of a marketing mix pie that was the same size. Outdoor, online, in-store, activation, PR and a zillion other mediums have all taken more and more of the pie. But TV has had to not only hold its visual value status, but deliver more bits than ever before, and all for less spend.
3. Unveiling of the black art. Clients now watch their kids shoot stuff, and edit stuff, and upload stuff – all for free. The perception of those paying the bills is not that film-making is a skilled profession requiring experience and knowledge, but rather that it is mostly a hobby or slightly indulgent working arrangement.
Now, how do we stop the rot in Advertising support industries? Well, thats not possible I’m afraid. Ad agencies, for example, would love to get media back in house, and actually make real money on tangible outputs again. But that cats out of the bag too. Ad agencies are crying poor because they are are poor! They sold the golden goose thinking that intangible creativity would deliver them endless revenue growth. Genius.
Back to post and production. The future looks like this:
1. Post is headed for a Monopoly. A duopoly was possible for a while, but Omnilab selling to Deluxe this week has stopped that in its tracks. No one else has the capital to play against deluxe in a battle for market share, and the top talent. Deluxe should, in fact, use a shelf company to buy Fuel so people have an alternative.
2. The Production model as it stands is dead. Someone above mentioned the 15% markup on post. Fair enough call. And consider for a minute that the people that make all the money – the directors and producers – are not financially retained – they’re all freelance! What kind of IP protection is that? And what do they get in return for the pretty significant profit they make on jobs? A web presence, a desk and a few DVDs.
So, stay alert. The future started to unfold this week. I’m afraid we can lament the past, but never regain it.
Tron some of your comments are clever and show knowledge.
Others are a crock.
Deluxe don’t have a monopoly, and guaranteed if FUEL doesnt make it through there will be some offshoot spring up.
There are plenty of post options still, but the remainder of post companies should definitely all get together and agree that they will not drop their rates beyond a certain point.
If this can be agreed upon by all post companies, it may force a change in industry thinking.
Problem is someone will always undercut the other to get the work in and will lead to this sad story being repeated.
And everyone loses, as more quality falls by the wayside.
it starts with agencies telling clients it can be done for less. then the less becomes the norm. At least the scripts get simpler and agencies expect less for their dollar.. oh wait
Everyone seems to have all the answers, once the horse has bolted! This situation has been played out globally for years, nothing unique here. Lessons should have been learnt!
Just a word of warning on Deluxe. Their main post production brand Method are very well known the in LA & NY markets at undercutting the competition, and not by a little, by a lot, in LA you cant compete, they will do the job for 1/2 price. This strategy works for a while but the damage done to the industry is enormous. Lets see how this plays out in the market here in Australia, will there be more companies that hit the wall, I think so. Congrats to the last man standing……
We (the post industry) are our own worst enemy. The constant undercutting has got to stop immediately if we are to salvage a sustainable industry for the future.
Someone mentions above that agencies are getting post houses to undercut a post house that has already undercut their initial quote…
The next time you hear “our client wants a ‘Gollum’ for 5 bucks”, simply stick to your guns and knock the work back.
While you may miss out on some immediate work, I promise you this, it will pay off in the long run once clients start to realise that high-end work does cost money. Yeah sure, there will always be someone that would be willing to work out of their bedroom for 5 bucks, but the level of quality would be reflected in their final output.
Because of the constant undercutting we have all got ourselves into a situation where we desperately need to win the next pitch/ project. We need to reverse the mess we’re all in so we get back to some level of normality.
It is embarrassing to hear some of the rumours floating around town that a couple of post houses (you know who you are and so do we) are calling agencies to say “we will do the job for whatever budget you can flick us” for Christ sake what sort of a business model is that!!
It is about time we all stood up and started to act like a bunch of professionals. I do not know of any other industry that is constantly screwed over like we are. Enough is enough.
This week is a moment in history for the Australian post production industry, lets make sure history doesn’t repeat itself.
Are these comments above, about FUEL or the Industry? Seems a lot of confusion and ‘soap boxing’ here.
The most sensible words written in a long time!
This should be like ‘Jerry Maguire’s’ mission statement and all post companies should heed these words.
Stick to charging what post is worth and stop giving away your IP, tools, talent and infrastructure for free.
It will pay off in the long run!
Well said ‘Enough is Enough’
It’s not easy running any business let alone a post business. Pricing is the constant bain of our lives but you’ve got to be brave about your value or about your business model. The world has changed and business owners need to adapt quickly, which is why I am struggling to imagine how the demise of a company of 100 people is due to the work drying up..should they have seen it coming earlier? Is AL still going?
🙁
Wow. What a week.
I just wanted to write a quick note of thanks for the overwhelming support we have received from our clients, colleagues, team, family and friends from near and far. I can assure you that everyone at Fuel appreciates the kind messages, phone calls and chocolates!
A press release alone can’t convey the full picture, and as I’ve said to many of you, I encourage people to call me for a more detailed update on where things are at. We do expect a positive outcome to this situation and hope to share some good news very soon.
In the meantime, thanks once again. Over the last 12 years, many people have been involved in helping to build this company from a team of 5 to one of the great VFX and post houses, and we believe we still have a lot to give.
Cheers,
Dave
Fuel will be back. Well, at least the principal players minus the albatross of their film experiment. Let the Administrator write all those “dear john” letters while the boys rise form the ashes with a new business model. Sooner than you think I imagine.
Is that the business model where they pay proper OT and better rates of pay.
Just reading the blog post “Calling All Post Producers – An Open Letter” and the above comment on fair rates and OT –
I think Fuel were, sadly, guilty of extorting artists. As they had the best reputation, and artists climbing over each other to get in the door, they offered seniors and juniors alike lower wages, knowing that we artists – like our parent VFX companies – will undercut each other in attempt to get the next job, the next hot TVC on our reels.
If we are to move forwards as an industry, we need to pay our artists – those guys that sit in front of those screens for 14hrs a day – a proper rate. And if you’re the best post-house in Australia, you should pay the best rates to attract the best talent, not force that talent to lower their salary expectations just for the chance to have a name on their CV.
We also need to stop undercutting each other for wages. Part of this is our desire to land the hot job, and part of it is a lack of openness and communication in the area of salaries, meaning most of us are flying blind.
Sadly VFXwages.com shut down a few years ago – I wish someone would start a new one.
I worked at Fuel. I trully hope that it is reborn. Great place to work. Wish them all the best.