In most industries, your CV and reference letters are the things that sell you to an employer. They're your first door of entry, showing what you accomplished in the past, and what your work experience is. Nothing can prove to a prospective employer that you're a good store clerk until you go through a trial. In art fields, it's different. Your portfolio, or demo reel, is what sells you. When you apply to a job as a 3D modeler, animator, even as a concept artist, having a good demo reel is a must.
There's several key features to a good demo reel. First, there's the length. A demo reel should be short, between 2 and 3 minutes. The simple fact is that an HR recruiter doesn't have time to go through a 10 minutes video of everything you've done in the past. That's why you need to cut down everything but the best. Start by listing what you believe is your best work, whether it's 3D models, visual effect clips, animations, or even drawings, assuming you're a 2D artist, then remove everything that isn't top notch until you have enough material to fit in no more than 2 or 3 minutes.
Your demo reel should also include breakdowns and behind the scenes footage for some or all of your work. It's easy to see a 20 seconds clip of a car exploding, but there's no way for the viewer to know whether you made the car, the explosion, or the compositing. The best way to do this isn't by adding titles. Writing down ''I made the model and the explosion'' just screams of laziness. Instead, show the clip, then show a wireframe view, or the original video before the effects were added. Show the viewer how the shot was made in a visual way. For images, you can do the same thing too, by showing some work-in-process screenshots that you took while making the finished piece.
A demo reel should have some text in it, but not too much. There's two main things you want the viewer to clearly read and remember: Who you are, and what you do. You need to have at least your name, if not your email and website, and then you need to say what you're doing, like ''VFX Artist'' or ''Concept Artist''. You can also add a list of the software you used at the end of the video. Otherwise, text should be avoided, you want to bring your message visually instead.
A good demo reel has music in it. But too often people add the type of music that they like, which can mean heavy metal or hard rock. Remember that you're making this demo reel for potential recruiters, and the HR person doesn't like your brand of heavy metal. Instead, try to find good background music, that isn't boring, but doesn't scream into people's ears either. There's lots of public domain tracks available online.
Finally, when it's time to upload your reel, think about the quality of the video. YouTube is littered with demo reels in 240p and 360p. In this day and age you need to upload an HD video. That means it needs to be at least 720 pixels wide. YouTube can give you good quality if you upload in HD, then you can easily share that link to people, so you don't have to send them a 20 megs AVI file.
Now that we have the basics covered, I think seeing some demo reels is the best way to get ideas for making your own. Here are some videos that show some of these concepts.
The first one is a bit short at 1:20 and the music is a bit strong, but the rest is excellent. The very first thing you see is the name of the artist. Too many people don't even have their name written clearly in the video, or a way to contact them. You then see a series of shots, followed by all the breakdowns. In this reel, Peter elected to put the breakdown shots at the end instead of one after the other, which can work also.
This next example is also somewhat short at 1:32, but has much more neutral music. Again we see the name of the artist and the software he used. We see several shots he did, along with some of the behind the scenes. Personally I would have changed the order, since it's always best to start with your best work, and in this case I would have started with the horse or oil rig.
This last example is from a character artist and in 3:10 she shows a nice mix of 3D models, textures, animations and concept shots. The video goes from fully built characters to works in progress, showing wireframes, UV maps and so on. The music and pace is also quite nice.