Why do visual effects costs so much?

Why do visual effects costs so much?
http://effectscorner.blogspot.com/2012/07/why-do-visual-effects-costs-so-much.html

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Short version: Visual Effects is incredibly time consuming and labor intensive work done for very little profit. In some cases it may actually cost less for the studio than the real costs incurred. Changes and compressed schedules  increase the costs further.

Full version:
Visual effects is a very competitive market worldwide. There are a lot of visual effects companies and all of them eager to get work so competition alone does not allow any company to have huge mark-ups.

The visual effects industry suffers from tax incentives in other states and countries. Some as much as 40% off. Note that these figures are not reduction of taxes but actually funds applied directly or indirectly to a movie. That means it’s not a level completive field and any visual effects company in California has to drop their prices if they wish to compete with other companies on the basis of price. Many visual effects companies actually underbid the work when required to try to keep money coming in. This means in some cases it’s costing the studio less than it actually costs. Same thing with the tax incentives. In those cases the local tax payers are in fact helping to fund the movie and thereby lower the studios expense for the visual effects.

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If visual effects were really such a profit center the studios and investors would be breaking down the door to buy or create their own visual effects companies. Some studios have had their own visual effects departments in the past. Disney had Secret Lab and Image Movers at different times. They closed both. The only major studio currently with a visual effects component is Sony with their Sony Imageworks. Sony had moved a number of jobs to Albuquerque, New Mexico a few years ago in an attempt to get in on the New Mexico tax incentives. They’ve now closed that and are moving many jobs to Vancouver for the tax incentives there. There may be a future where all visual effects for Hollywood based movies are all done out of this country simply due to tax incentives. This is the outsourcing that isn’t talked about.

(more at link)

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Highly lucrative films like the Avengers and Batman have hundreds of visual effects artists working on them, many who work insane hours with few benefits and don't even get credit.