#5. Life of Pi Bankrupted the Special Effects Studio
Even though the movie grossed over $600 million and won four Academy Awards (including special effects), Rhythm & Hues went bankrupt shortly after its release. Remember during the Oscars ceremony when that one guy tried to say something but got cut off by the theme from Jaws, and everyone laughed? Yeah, he was trying to tell you that the same company that created those impressive visuals is now in the gutter.
How is this possible? Well, it’s mainly because visual effects is a flawed industry with a business model that is impossible to succeed in. In order to save money, movie studios tend to contract VFX companies on a “fixed fee,” meaning that after a certain amount of takes, the VFX guys are forced to cover the costs. So, when an unfilmable picture like Life of Pi requires extra work, the visual companies end up “paying for the movie.” In the end, Rhythm & Hues didn’t see a penny from those $600 million.