The future of the Australian digital production company behind Happy Feet 2 – Dr D Studios – is uncertain after the departure of almost 600 staff.

The majority of staff were on contracts expected to end after Happy Feet 2 was completed, however a number of senior employees have also left as part of a restructure. The latest round of departures will occur in early-December.

A large number of employees were also offered positions at a new company that KMM plans to set up early next year.

Almost 700 crew were recently working on Happy Feet 2, which was released in the US on November 18.

There are suggestions that the relationship between KMM and Omnilab has become frayed.

Another source said Omnilab staff were recently refused access to the facility while trying to survey the assets of the company.

Omnilab Media managing director Christopher Mapp said he was not aware of that and Omnilab remained fully committed to the Dr D joint venture now that it had finished Happy Feet 2.

“We’ve finished the film and now the shareholders have to sit back and work out the best way forward,” he said.

George Miller’s assistant and Dr D head of production Brett Feeney did not respond to email questions.

KMM’s Doug Mitchell recently said the business had been restructured as it faced a production gap between Happy Feet 2 and the fourth Mad Max film, Fury Road. He opened the possibility that the joint partnership between KMM and Omnilab may be dissolved or that the Dr D business may continue in its current form.

The uncertainty about the company’s future follows Miller’s decision to also move the long-delayed shoot for Fury Road from Broken Hill to Namibia, which was first reported by IF magazine in August. Fury Road is also a Dr D production.

The moves call into question the NSW government’s generous subsidies to lure such businesses to set up in the state.

The joint venture between Kennedy Miller Mitchell (KMM) and Omnilab Media, which was first announced in November 2007, was intended to rival Peter Jackson’s Weta Digital in New Zealand as a home for high-end effects and digital feature film production.

In 2009, KMM to set up at North Eveleigh’s CarriageWorks, where it used bays 22-24 and part of bay 25 for motion capture work on Happy Feet 2 and development work on Fury Road. A government source said the deal was with KMM rather than the Dr D joint venture and the lease – effectively at cost – was renewed last year. KMM was described as one of the toughest negotiators the government has dealt with.

The filmmaking business is notoriously volatile and major productions are typically filmed in the countries which are cheapest or offer the highest tax rebates.

In mid-2009, the NSW Labor government announced that Warner Bros’ film, Green Lantern, would be shot in the state, however, just months later the production was shifted offshore as the value of the Australian dollar climbed.

The rising dollar has forced many local crew and post-production staff to abandon the industry or relocate overseas. Earlier this year, a number of Australian crew flew to Taiwan to work on Ang Lee’s Life of Pi.

After the global success of Miller’s Happy Feet in 2006-07, the filmmaker lamented the “brain-drain” that has often occurred in the Australian industry.

“I had found it heart-breaking to watch the home-grown talent pool that emerged in Australian cinema go overseas because there was no continuity of high-end work in this country,” he said. “KMM's partnership with Omnilab Media and the Mapp family is our attempt to stop history repeating itself and reversing this Australian brain drain.”

Contact this reporter at bswift@www.if.com.au or on Twitter at @bcswift.

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17 Comments

  1. Anyone would think from this article that Peter Jackson doesn’t employ freelancers …

    Surely the vast majority of those 600 staff WERE freelancers employed under contract for a specific production.

    Productions come and go – it’s the nature of the business in a service industry.

    A base staff of 100 is still a huge pool of people to maintain when there isn’t a production rolling thru the premises.

    No doubt Dr D will crew up again when the next production comes along … why all the fuss ?

  2. What if any conditions do the State government agencies insist on when these very generous subsidies are granted? It might appear to a more cynical pundit that these subsidies are for a one-off production. Politicians are happy to take the opportunity to take credit for the hundreds of jobs that are generated in the short term but no one seems concerned that many of those jobs go to international contractors and when the project wraps there is no ongoing commitment to building a long-lasting and sustainable business. Too many times this form of support benefits the individual director or producers of that specific project but not the Australian VFX industry in the long term. There is a lot of talk about the Peter Jackson model but what distinguishes what Jackson has done in NZ is that he has spent his own money to build world class facilities that services an international film industry not just his own private projects. Weta and those other related facilities are run as an independent business, not just the plaything for an individual director. What is missing in State subsidy scheme is a commitment to those Australian VFX companies who are going to be here for the long-term, have built a sustainable business model, and invest in the training and education of local talent.

  3. Dr D had no where near 600 people full time. The sheer majority of their staff was on fixed term contracts, as it the industry standard (see Animal Logic, RSP, Weta etc). Way to go with the wrongness IF.

  4. Why all the fuss? Yes look fair enough I’m sure that most experienced contractors understood that it was a fixed term engagement and expected nothing more, though perhaps some people were lured in on the premise that something permanent was being set up.

    That said…

    “The moves call into question the NSW government’s generous subsidies to lure such businesses to set up in the state.”

    And I would agree with the writer’s statement. Exactly how much did this little venture cost tax payers?All under the premise of “creating an animation industry” in Australia. I think this is worth investigating. Either way, sure you cannot really blame a company for trying to create something and failing which clearly these guys did. Fail that is. I read in another article that they went an estimated $60 million over budget.If I was a major stake holder I would be inclined to shut down the operation, let everyone go using the “production gap” as a fair reason and then start any new projects under different management.

    By the way if we are going to use the freelancer argument you might also want to know that Weta Digital do in fact maintain a pretty large core group of artist, well over 100 and currently have half a dozen films in various stages of production. Dreamworks Feature Animation have 10 films in development at any given time.It’s not easy but it can be done when you have the right motives combined with experienced people in positions of management / leadership.

  5. Vfx artists want a career, short term contracts destroy the industry for the vfx artists and the
    companies that use the system, which is all of them, because by definition they are only interested in a single project, I suggest the artists and future directors band together seek funding from the government to create a future for
    themselves. Where is the George Lucas and Spielberg of the 2010s.There is no reason for not having the next project ready to go. Because the director could not be bothered to find one.Let the director stand in front of the screen without your work and let the public see what he really has.

  6. I’m a Dr D employee and can confirm this is all above board.  Definitely being retrenched and people are just walking out and refusing to work through their notice. All up it’s just another example of the way the place, and the employees have been managed from the start. Truth is Dr George has singlehandedly run Dr D into the ground with an ego that’s bigger than the Antarctic and a story vision smaller than a krill.

  7. I was hired to DrD from Europe on the promise of 12+ months of work in a permanent role. 2.5months into my relocation here with my family i was told “you are redundant. You will finish up in 4 weeks”. Never have I been treated so badly in my 18+ yrs in the vfx/animation industry, and i have worked in the US and London.

    Management at DrD are mere amatuers and have no place even attempting to run a studio. Artists beware.
    IR

  8. Seems more and more companies are hiring freelancers or “short contract” staff – and even in the case of staff that are clearly a valuable asset, they will be placed on rolling 12-month contracts. Effectively it’s a way for companies to sidestep the issue of redundancy, and I disagree with the practice. I see rolling (or constantly renewed) short-term contracts as no different to “permalancing”, which has been ruled by various governments to be the same as being a full-time employee. Unfortunately in Australia where the industry is so volatile there doesn’t seem to be an escape from this practice. Even companies such as Fuel and Animal, who appear to have a constant flow of both local and international work (and therefore should not be able to argue “volatility”), seem to have adopted the short-term contract model, with senior staff on 3-month gigs, despite the fact that they’ve been there every day for the past 2 years (or 8x short ocntracts!). No security, even at Australia’s biggest companies? Way to inspire confidence in the industry. Why is it industry standard that we all work on contracts like this? Because the bosses dictate it, and it’s better for their hip pockets. It’s important for a company to be able to scale up and down, but not every single employee needs to be treated this way.
    While I recognise that some individuals welcome such a model, it’s usually those who are younger, single, or don’t have mortgages to look after – which rewards inexperienced yet more energetic artists, and punishes those with the experience who have paid their dues and now for whatever reason don’t want to work 12hr days with only a 3month contract for security.

  9. “Remember, DreamWorks animation had 4 or 5 very expensive flops before hitting with Shrek,and a few since.”

    Yes Scott, well my point however is about having a successful business model and employing people who are capable of developing business that will sustain the company and maintain a core staff. I just found an article on the web which mentions Dr.D. “managing director” so I looked this person up…Are you kidding me who is this guy? Why would someone like this with absolutely no background in management/business be tasked with running a company? Regarding flops.To what films are you referring? Shark Tale was horrible but it still made money. Budget was roughly 75 million, it opened at 47 million and grossed 160 million in the end.Under the Dreamworks Animation banner they have continually made money on films since Shrek and are a solid organization because they employ qualified people in all the key positions across the company.I use them as an example but there are others. Jessica up top made a good point but it is not up to the film director to find the next project. It’s up the those people running the company to engage in that kind of development from day one but how can they if they do not have the background or experience needed in order to know how to progress forward. Sounds like this company was never going to work long term.

  10. I don’t many posters are being fair to Dr D. Especially ‘annomyn’. It was a great company to work for – much more inclusive for staff and a great culture. Perhaps some of these comments are sour grapes??

  11. Brendan Swift’s reporting is spot on here. Full timers did get retrenched. but that’s business in these times. His 2nd paragraph is completely true, easy to read and not skewed in anyway I can see. What’s the argument? Anyone remember the fur brigade carrot hmm? No doubts DrD will bounce back in some new venture or form, had a great culture with talented artists, just a shame the movie had such a weak and fragmented story in the end.

  12. A great company to work for and a great company culture. Very poorly managed from the top level. Regardless of what they say, this company was NEVER intended to be a permanent fixture. I commend the smart ones who saw the signs and got out early.

  13. I worked for Dr.D on the film in question and I agree its a shame the full time staff have been let go but, these were a very small percentage of the staff.
    The vast majority of people who were employed by Dr.D were employed for the duration of the film. This was stated very clearly in the fine print of our contracts.

    Dr.D were very generous to their staff and offered very good relocation packages to those moving from abroad and very good perks for those working on a day to day basis. Those relocation packages and perks are not standard offerings by many companies so Dr.D went above and beyond there.

    The nature of this industry is short term contracts.
    Dr.D was a great place to work. Name one vfx house internationally that hasn’t had people say something negative about them.

    I think other media sources who have taken the above article out of context and drummed up this “600 people” being laid off should hang their heads in shame for bad reporting.
    Brendan did well to outline the true reality in his article though many have chosen to skim the article and not read it fully.

  14. The article states the facts very well.
    Next time George makes a movie he should make sure he hires management/ supervisors who have IMDB profile with grade A movies on not Z list.

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