Annual computer graphics conference Siggraph wrapped Thursday afternoon at the Anaheim Convention Center—and numerous longtime Siggraph attendees who work in Hollywood said the show felt not just smaller but different this year.

It’s no secret that the VFX business in turmoil, created by a perfect storm of factors including film subsidies and fixed bid practices, and you could sense the fragile state of the business throughout the week. “Money is flowing, but none of our customers are making huge amount of money,” Maurice Patel of software developer Autodesk said, noting that his company is developing virtual production tools aimed at helping artists work in a more efficient and cost effective manner.

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In fact, the challenging business issues are being faced at a time when creative and technical advancements are evident—just look at this week’s program, including the production sessions on Pacific Rim and Frozen; or the exhibition, which included developments in areas from mixed reality to rendering (and for applications in fields from entertainment to medicine.).

For some background, Siggraph is hosted by the Special Interest Group on Computer Graphics and Interactive Techniques of the Association for Computing Machinery (ACM), an educational and scientific society. The annual event attracts many from research and educational institutions, but also includes students as well as Hollywood’s elite.

According to Siggraph, this week’s show attracted 17,162 attendees, down from the 2012 event, which was held at the Los Angeles Convention Center and drew 21,212 attendees. (The choice to hold the event in Anaheim might have also contributed to the reduced attendance.)

The show floor featured 180 exhibitors, up from 161 a year ago, according to show organizers. Still, even this felt different to some delegates. One reason might be that Autodesk—which typically had one of the largest booths on the show floor--chose not to exhibit. This year upon entering the exhibition hall, one saw Canon’s mixed reality demos (more on that in my upcoming technology roundup), where in the past we would have seen an Autodesk booth.

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Autodesk’s Patel said the company chose instead to focus on its annual Siggraph user group meeting, as well as more “virtual” events. Like Siggraph, the user group event also seemed more lightly attended than in past years.

During a session on the state of the industry VFX supervisor Scott Squires lamented that he had talented colleagues who are planning to leave the business. “One problem is we love what we do, and accept a lot of things that ‘normal’ people would not—like working 80 hours a week and [sometimes] not be paid for it.”

Said panelist and VFX artist Dave Rand: “If I could ask for one thing to change first, it would be that not-paying-artists would end. It’s happening. It just happened in India.”

A big component of Siggraph is education, and some worried professionals from Hollywood questioned the career potential for the attending students after their graduation.

“The only people making money are for-profit universities, from tuition,” said one industry vet. “Students are graduating and want to work in movies … but jobs are scarce, and they are [often] graduating with student debt.

“For [veterans], they are competing with new graduates who will work for pizza and beer. What does that do?”

Of course another widely discussed issue challenging the business are subsidies. Speaking with The Hollywood Reporter just prior to Siggraph, Pacific Rim VFX supervisor John Knoll, who is also chief creative officer at Industrial Light + Magic, admitted that he is "not particularly optimistic" about the business in California. Referring to the generous film subsidies being offered, he said, "economic war is being waged by Canada, England, New Zealand--and California is not fighting back. It's loosing a war it's not fighting. [It's an] extremely unlevel playing field."

From a business standpoint, among the most potentially impactful sessions of the conference was the “State of the VFX Industry” panel during which a Washington, DC-based lawyer outlined a proposed plan that could help to address the subsidies.

That session wasn’t held until Thursday afternoon, meaning it was one of the last sessions of the conference and took place after many attendees has already departed. If you missed it, David Yocis, an attorney at Picard Kentz & Rowe, discussed (via Skype) his firm’s recently completed feasibility study on how subsidies might be controlled.

According to Yocis, while not a certainty, the best possible approach to addressing subsidies is a World Trade Organization rule that could be used to impose Countervailing Duties, which effectively means that if a foreign government unfairly subsidizes goods or services (such as rice, semiconductors, cotton, or, perhaps, VFX shots), then the U.S. could slap a duty (i.e., an import tax) on the goods in a countervailing amount (i.e. an equal and opposite amount), so that the buyer in the U.S. ends up paying market price, rather than the subsidized price. Industry leaders are exploring this potential approach.

THR’s roundup of technologies from the exhibition floor will appear in an upcoming post on the Behind the Screen blog. Previous blog posts include coverage of numerous Siggraph sessions including the keynote panel.

E-mail: Carolyn.Giardina@THR.com

Twitter: @CGinLA