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What is the market share for the top global visual effects companies?
Hello! Thanks for your question about the share of the top 20 players in the global visual effects market.
The short version is that, even though the share of the top 20 players is not readily available, I was able to compute, in the spreadsheet below, the share of 20 out of 24 visual effects companies, which were identified as key players based on your examples, a market research report, and a few articles. However, the sum of the shares of the 20 companies, which was only less than 1%, does not appear realistic and does not tally with an A.T. Kearney report saying that over 50% of visual effects work is captured by the top five visual effects companies.
Below you will find a deep dive of my findings.
MARKET SIZE
Based on an excerpt from FirstResearch.com's report on special effects and other video post-production services, the global visual effects (VFX) market is expected to grow from $90 billion in 2014 to $110 billion in 2018. PwC was cited as the source of this information, but, surprisingly, I was unable to find any PwC report or article saying this.
Given these figures and assuming they are accurate, I was able to compute that the CAGR during the period 2014-2018 is 5.14% and that the size this year is $104.6 billion.
KEY PLAYERS
Zion Market Research, in its press release for its report on the global VFX market, identified the following 15 companies as the key players: Zoptic, Absolute Post, Aardman Animation, Ambient Entertainment, Animal Logic, Alchemy 24, Worldwide FX, and Wildfire Visual Effects, Weta Digital, Warner Digital Studios, Worker Studio, Zoic Studios, Whiskytree, 1000 Volt, and Amalgamated Pixels.
Since you requested that at least 20 firms be included, I added to the list Industrial Light & Magic (ILM) and The Mill, which you mentioned in your request. I also added Digital Domain, Luma Pictures, Framestore, Mirada, and MPC, companies mentioned in The Future of VFX article of Ian Failes, a senior writer at FXguide.com, and Double Negative and Sony Pictures Imageworks, companies mentioned in both A.T. Kearney's report and another blog post.
SHARE OF KEY PLAYERS
The share of the key players in the global VFX market is not readily available as I have determined after an extensive search through industry reports, corporate websites, company databases, annual reports, and articles and reports from trusted media sites and organizations. Since I was able to find the size of the global VFX market, I decided to estimate the share of the top 20 VFX companies through the following steps:
1. Finding the revenue of each of the 24 companies I listed above
To find the revenue, I searched in Google and company databases Hoovers, Find The Company, Owler, and Manta. There were instances where searching for a specific company in a company database returned several results, so, to ensure I picked the correct entry, I checked first if the company URL and the address in the database match the actual URL and headquarters of the company of concern. (This is why there are columns for the company website and the headquarters in the spreadsheet.)
For example, if you search for the company Absolute Post in Hoovers, you will see several companies with the term "Absolute Post" in the results. I found it hard to determine the correct revenue to pick without comparing the details in the database with the company's actual details.
You may also notice that there are columns in the spreadsheet for the company's specialties, the company type, and the company's number of employees. I took note of the specialties to get an idea of what the company revenue covers (i.e. if bulk of revenue is generated by VFX services). Also, I checked the annual reports of the companies that were classified as public companies. According to LinkedIn, ImageWorks, ILM, and Mirada are public companies; however, I learned that ILM is part of The Walt Disney Company whose annual report does not contain any details on ILM's revenue or market share. The same can be said with Sony Pictures ImageWorks. And I was unable to find Mirada's annual report.
Lastly, since I thought the number of employees should be proportional to the company revenue, I took note of the company's number of employees.
2. Ranking the 24 companies by revenue
Once I finished looking for the revenues of the 24 companies, I sorted the companies based on descending revenue.
3. Computing the share of each of the 24 companies by dividing the company revenue by the global market size
4. Summing up the computed shares of the top 20 companies
You may see the sum in Cell H2 of the spreadsheet. Unfortunately, the result does not appear realistic since the sum is too small (i.e. less than 1%). I could only think of two reasons for this: either the global market size is incorrect or there are several major players not included in the list.
The result is too far from what I saw in A.T. Kearney's 2013 report on post-production services. According to pages 3-4 of this report:
"The VFX industry remains fragmented with more than 500 firms vying for a share of the pie. The industry is likely to remain fragmented despite intermittent consolidations because of low entry barriers and VFX artists' preference for working in small teams alongside people with whom they have already done business. There is a clear segmentation among players, with the top five getting more than 50 percent of the work and the others competing aggressively on price and relationships. The middle tier studios largely play either supporting roles on large projects or important roles on smaller projects, drawing mainly from their specialized libraries; the bottom tier players work out of the "garage" focusing on low-budget films."
References used in filling in the cells in the spreadsheet are shown in Columns J-N.
POSSIBLE CONTINUED RESEARCH
In understanding what types of information are and are not publicly available on this topic, I have listed below a few other routes you may be interested in:
1. LinkedIn can be searched for visual effects companies whose number of employees range from 1,001 to 5,000 or from 501-1,000. Then, once the largest companies in terms of employment are found, the companies' revenues can be searched and their shares computed. This will take a long time, though, since companies in LinkedIn could not be filtered by number of employees. I attempted to include the employee range in my search string, but the search string did not work as intended.
2. After I have completed my spreadsheet, I found a list of 251 VFX companies. Perhaps the revenues of these companies can be looked into to verify the size of the global VFX market. Also, the ones that have been in the VFX business for quite some time can be looked into as they may be the major players. (It appears from the list that Amalgamated Pixels had ceased operating in 2010. Yet the company is included in Zion Market Research's recent list of key players.)
Moreover, there is a blog post listing the top ten VFX companies. Though I could not ascertain the reliability of the blog post, seven of the ten listed are already in my spreadsheet. The revenues of the following other three companies can be looked into: Svengali FX, Stargate Digital, and Method Studios. Technicolor and Rhythm & Hues, which were mentioned in A.T. Kearney's report, can be included as well.
CONCLUSION
To wrap it up, I have a prepared a spreadsheet of 22 key visual effects companies where I was able to find the revenue and compute the market share of 18 of them. However, the resulting sum of the shares of these 18 companies, which I computed to be less than 1%, is far from what I expected given an A.T. Kearney report indicating that over 50% of visual effects work is captured by the top five players in the market.
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