The sense of shock at the sudden demise of film visual effects giant MPC is palpable within the tightknit VFX industry, but few are surprised.
“I am gobsmacked,” said one UK VFX boss, who – like so many in the UK visual effects business – spent formative years of their career working at MPC. For years, MPC was the powerhouse name in film visual effects in the UK – the go-to facility for directors such as Ridley Scott and the leading VFX supplier to Disney and its Marvel superhero movies. Its Academy Award-winning work includes 1917, The Jungle Book and Life Of Pi.
But many say MPC’s demise has long been on the cards, pointing to the management of its Paris-based parent company Technicolor, which began shutting down its operations globally this week amid severe financial challenges. Technicolor UK appointed administrators this week who have made the majority of its 440 UK employees redundant, from MPC as well as Technicolor-owned commercials VFX house The Mill, animation facility Mikros and Technicolor Games.
MPC in the UK was home to many talented VFX artists who until recently were working on Disney’s Snow White and Lilo And Stitch as well as Paramount’s Mission Impossible – The Final Reckoning. Recent credits included Disney’s Mufasa: The Lion King and Young Woman And The Sea. Meanwhile, MPC Paris handled the visual effects on Jacques Audiard’s Emilia Pérez.
Industry execs cite multiple reasons for its collapse. Among them is the production slowdown which has seen both studios and streamers rein in spending since the 2023 actors and writers strikes. “The past 18 months have been horrible,” says the VFX boss, preferring to speak anonymously, about the work drought at VFX studios.
Another is the competitive nature of the VFX sector, with facilities encouraged to underbid each other to win work from the Hollywood studios. Some blame Hollywood studios and streamers for “screwing” suppliers, offering rock bottom budgets but demanding high quality visual effects. Many say that Technicolor companies were notorious for underbidding on projects, just to get work into the studios.
Others say that MPC started to take on too much work, and wasn’t able to deliver in time. “It became a real mess. A lot of shows got let down enormously. Suddenly, they were not flavour of the month,” says one VFX executive, speaking anonymously.
Another adds, “They took on too much work at too little money. Then they started to fail to deliver on deadlines. And that’s death in this industry.” It is understood that Disney, once a key supplier, significantly reduced the amount of work that flowed through the studio as a result.
Founded in London’s Soho in 1970, MPC had about 20 to 30 people or more working in film VFX in the late 1990s and grew rapidly in line with demand over the next couple of decades, employing thousands of artists not only in its home territory in the UK but also in Canada, the US, India, France and Australia. Its size made it particularly vulnerable when the production slowdown hit.
“MPC evolved to do huge movies with 3,000 visual effects shots, but there are fewer of those being made now,” says VFX consultant Will Cohen, former managing director of Mill Film and TV.
Leadership issues
However, many believe that the leadership of Technicolor bears much of the blame for what happened to MPC. Technicolor spent heavily on a series of acquisitions in the visual effects and animation space: MPC in 2004, and continuing with Canada’s Mr. X (2014), French animation studio OuiDo! Productions (2015), UK-based The Mill (2015), Canada’s Cinram (2015) and France’s Mikros (2015).
In 2020, amid the pandemic, Technicolor restructured after filing for bankruptcy. Controversially, it merged MPC’s advertising arm with sister advertising house The Mill in 2022.
In the same year, Technicolor undertook a complex and time-consuming reorganisation, spinning out its VFX and animation units into Techicolor Creative Services (later renamed Technicolor Group). The debt-laden Technicolor refinanced in 2022 and again in 2024, but this year has been unable to find additional lending or a buyer.
In an email to employees this week, Technicolor CEO Caroline Parot blamed several factors for the company’s problems: “A difficult operational situation resulting from post-Covid recovery, a costly and complex separation from the previous group followed by the writers’ strike leading to a slowdown in customer orders causing severe cash flow pressures.”
It’s not hard to find people venting their frustration towards the Technicolor leadership; there are dozens of posts on message boards on Reddit from former employees. Says one: “First, understand that every business unit at Technicolor was packed with incredibly talented, motivated, and inspiring artists. The work they produced was world-class. The problem wasn’t talent or execution – it was mismanagement at the highest levels.”
The company driving up its debt load through acquisitions, its decision to go public and a lack of vision at the top come in for fierce criticism from these employees. The anger towards Technicolor management has been exacerbated by the sudden nature of the company’s collapse that happened just days before staff were due to be paid, leaving thousands without their monthly salary and unlikely to receive redundancy payments. There is now widespread concern that many will leave the industry altogether, depriving it of experienced talent.
Some commentary has suggested that AI is a contributing factor to the demise of Technicolor. But industry execs disagree, saying that generative AI is at too early a stage to have disrupted the sector.
“Generative AI is not directable at the moment,” says Cohen. “It is not at the right resolution for the work we do. I can’t see it having a huge impact quickly. But I can see machine learning and AI tools helping to make the VFX space more efficient for people trying to make content in a world of rising costs.”
For old hands, the collapse of MPC and The Mill is part of a familiar cycle of change in a turbulent sector that is often hit by cash-flow crunches when work slows down. Digital Domain, the Vancouver-based digital effects firm founded by James Cameron, filed for Chapter 11 bankruptcy in 2012. The same year, LA-based Rhythm & Hues Studios filed for bankruptcy shortly before winning an Oscar for its work on Life Of Pi. The Mill famously closed its film department in 2002, the year after winning an Oscar for its VFX on Gladiator, blaming a slowdown in US inward investment films coming to the UK.
Notably, Technicolor’s collapse comes just a month after the closure of Dublin-based post house Windmill Lane Pictures, which cited the impact of the strikes and the “erosion of competitiveness” of Ireland’s VFX tax credit for its demise. “It is all about supply and demand. Demand is currently low. We’ve had a very protracted period of inactivity,” says one exec.
Outlook for UK VFX
Despite the collapse of Technicolor and MPC, it’s perhaps surprising that many are cautiously optimistic about the outlook for the UK VFX sector.
In the immediate aftermath, unfinished MPC projects will be picked up by rival VFX houses. The head of one post house says that after a difficult 18 months, more work is starting to come in. “Studios are being careful and are not throwing money at visual effects like they used to, but it is definitely turning a corner.”
Neil Hatton, CEO of the UK Screen Alliance, also reports increasing optimism in the sector. “In the studios and on location, there is a lot more activity than there was 12 months ago. That activity is going to flow through into visual effects and post.”
This confirms recent Screen research which predicted that the UK is set to receive a swathe of inward investment films and series this year, including Avengers: Doomsday, as well as Disney series Star Wars: Ahsoka and Tin Man. The Harry Potter series will shoot at Warner Bros Studios Leavesden over the summer, and the third series of Amazon’s The Lord Of The Rings: The Rings Of Power is understood to be staying in the UK to shoot.
Also filming here are Mattel Films and Amazon MGM Studios’ Masters Of The Universe, Warner Bros’ Wuthering Heights and Supergirl: Woman Of Tomorrow.
VFX execs also downplay any talk that the collapse of London-based MPC and The Mill represents a diminishment of the capital’s global reputation for VFX. “This is a global collapse. It is not about a problem in London,” says one. Adds another. “London won’t fall over with this. We’ve got to digest what happened. But the hole will be filled quite quickly.”
One company boss says that other companies will take on work that used to go to Technicolor outfits. Other major VFX houses in the UK, such as Framestore, Industrial Light & Magic and DNEG, are currently recruiting for staff. New VFX companies will also be born to fill the gap.
This has already happened in the US: The Mill’s US creative leadership and most of its creative staff have launched a new venture, Arc Creative, in partnership with Dream Machine FX. “The VFX artists will all be scooped up – they will all have work. They’ve just got to wait for it to kick in.”
Adding to the sense of cautious optimism in the UK is the increased tax relief for visual effects in film and high-end TV that was announced by the Labour government in October.
UK VFX costs will receive a 5% increase in tax relief, for an overall net rate of 29.25%. Crucially, VFX costs are also exempt from the overall 80% cap on spending eligible for the main Audio Visual Expenditure Credit (AVEC). The 80% budget cap previously meant US majors shooting their films in the UK were sometimes forced to go elsewhere to do their post-production.
The industry is waiting for Royal Assent of the Finance Bill, which includes the VFX uplift and is currently passing through Parliament. It is expected to pass into legislation next month. Claims can be made in April for work starting on January 1. “It is exciting because we lost so much to Canada,” says one exec. “There’s a whole lot of talent who left to go to Canada who might all want to come back again.”
Hatton adds: “The major impact of the tax relief hasn’t been felt yet, but it is likely to have a significant impact on the industry.”
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