The Silver Screen's Digital Dreams

FRAMINGHAM (02/15/2000) - Hollywood. People come here from all over the world in search of fame and fortune. Some find both. Most find neither. But scrape off the Tinseltown stardust and there's a plain old biz beneath the show: a film industry that in recent years has experienced both feast and famine.

Paramount's 1997 Titanic raked in $600 million at the box office and put director James Cameron on top of the world. In 1998, Universal Studios Inc.'s Babe: Pig in the City took in $18 million, cost a porky $85 million to make and (along with a few other underperforming titles) cost Universal Chairman Casey Silver his job. In Hollywood, the technical term for that kind of ROI is bomb.

How to avoid the flops and make only the hits-that's the holy grail in Hollywood. Technology hasn't yet provided the formula for a guaranteed box office smash; most people think it never will. In fact, Hollywood regards technology with a certain ambivalence. The dream factories worship creativity, not technology-people, not machines. The movie business is traditionally based on intuition, inspiration, negotiation and the handshake.

None of those things automate easily. So even as more and more technology shows up on the screen, sometimes to great effect (1999's The Matrix), and sometimes not (1999's The Mummy and Wild Wild West), studio CIOs every day confront an acute version of the standard IT conundrum: when to push against corporate culture and tradition, and when to go with the flow as they strive to provide competitive advantage with their information systems.

"It's a very old business, very non-process-oriented, and we've had to work around that at times," says Justin Yaros, CIO of 20th Century Fox. "But it's hard to argue with some of the efficiencies IT can bring."

A film passes through many stages and many decision points before it arrives at the local 24-screen megaplex. Those decision points provide a showcase for Hollywood IT, its efficiencies and its influence on the creative process.

SCENE 1 - A FILM IS BORN Acquisition A movie starts with a concept; the concept becomes a pitch; the pitch becomes a screenplay. Let's call our script Indiana Bob and the Mayan Enterprise Architecture Mystery.

20th Century Fox brings in 40 to 60 new screenplays every week, and that's where IT first steps into the picture. Indiana Bob gets scanned into a system Fox calls S-Files, a play on The X-Files, Fox's popularly paranoid network TV show. S-Files is a 3-year-old Notes-based document management system. Indiana Bob is assigned to a reader who writes a synopsis of the story, classifying it by genre, author and so on. Every Fox employee involved in story development, up to the corporate chairman, works out of S-Files. Users query the system to find particular writers or all the scripts in a given genre. So if Tom Sherak, the chairman of the 20th Century Fox Domestic FilmGroup, decides audiences are ripe for an action-adventure thriller about a vanished South American empire and its infrastructure standardization challenges, up pops Indiana Bob.

After Bob gets green lighted, the project goes from S-Files into Deal Maker, a custom Fox application that the legal and business affairs departments use to structure and track contracts with directors, writers (known in Tinseltown parlance as "above-the-line talent") and actors. Again, Fox can query the data in Deal Maker, allowing the studio to compare potential new deals with the old.

Yaros calls it "sort of a competitive tool vis--vis the talent," rather than against other studios. For example, if the man behind the Darth Vader mask wants a 50 percent raise to appear in the next George Lucas prequel, Deal Maker will give Fox execs the going rate for performers whose faces are never seen and whose voices are dubbed.

Star Wars looms large in Fox's corporate legend. Visitors to Fox's gated lot in Century City are quickly reminded of the 1977 blockbuster that effectively saved the studio. The gargantuan sound stage facing the entrance bears the five-story painted likenesses of Vader and other Star Wars characters. Yaros, whose modest office building is tucked into the shadow of said sound stage, proudly notes that Fox has released half of the top 10 blockbusters of all time.

PRODUCTION So the deal gets done. The director and stars have signed on, and the film is really going to happen. Next, a series of systems come into play that Yaros puts under a "proximity and story tracker" umbrella. The film production process is a project-management challenge that IS professionals can appreciate.

The producer and director are responsible for figuring and refiguring budgets.

Financing comes next, as the studio looks for partners to share the risk. The production company assembles props and rounds up costumes. Location scouts scout locations. Producers schedule and reserve sound stages. If the movie is being made in another city, Fox needs to apply for permits and negotiate with local trade unions. Special effects are outsourced. The producers assemble a team of accountants, cinematographers, electricians, gaffers, publicists, script girls, first and second unit directors, and on and on into the hundreds.

Many tasks under way, many contractors to pay, aggressive completion dates targeted with no guarantees. If you've got Brando contracted for seven shooting days in Manhattan, the sets had better be ready on time and the caterer had better be there because Brando is headed back to his Pacific island after those seven days are up whether or not you've shot all his scenes. Fox applications keep tabs on the various components and automatically generate appropriate payments as production managers check off steps along the way to the film's completion.

DISTRIBUTION AND EXHIBITION It is a sad thing to make a good movie and then release it at the wrong time. The aforementioned talking-pig sequel Babe, among other problems, got roasted in the afterburners of Disney's A Bug's Life and Paramount's Rugrats children's movies. MGM/UA played it smarter with The Thomas Crown Affair last summer. The film's original June release date was moved to late summer to avoid going up against Paramount's The General's Daughter, starring John Travolta, and Fox's Entrapment, a Sean Connery flick "with the same plot as Thomas Crown-James Bond stars as art thief," according to Gitesh Pandya, editor of movie site By dodging direct competition, Thomas Crown pulled in a solid $14 million its first weekend.

There are plenty of complicating factors, some more obvious than others, in choosing a release date. World Series weekends are not great for anything.

Ditto Super Bowl Friday, Saturday and Sunday. Scary flicks do better around Halloween, and Santa gets a frosty reception in July.

Choosing the right theaters is also a challenge. Movies directed at teens score better at mall theater locations than at art houses. Action flicks are not optimally positioned in houses with an older audience demographic. Fox uses two key applications in the scheduling and distribution stage. One is 8-Ball, a theatrical data warehouse Fox developed internally (with the assistance of US Web/CKS). Fox distribution reps access 8-Ball over the corporate intranet to help determine which theaters in their territory are most appropriate for a given film. 8-Ball's data, for instance, will show which local cinema draws a particular audience. That science doesn't take away all the art-after all, what if Indiana Bob's Meso-American subtitles give it a better shot with arty theatergoers than with the testosterone crowd? That's a call Fox's people still have to make on their own.

Once the preferred time of release and favored exhibition sites are chosen, the actual booking, scheduling and accounting is handled through another application, developed in conjunction with Hollywood Software, dubbed Falcon (after Han Solo's Millennium Falcon, "the fastest hunk of junk in the galaxy").

Settling on the split-how much money is kicked back to the studio and how much stays with the exhibitor-is another negotiation. And, like other studios, Fox often asks for a guaranteed minimum onscreen stay for each of its films. (For last summer's Star Wars prequel, Episode One: The Phantom Menace, Lucas demanded an unheard-of six-week commitment from exhibitors. Lucas also negotiated an unbelievable 80-20 split; that is, 80 cents on every box office dollar went to Lucas.) Terms can grow quite complex. Falcon keeps track of the deals and also keeps tabs on the copies of the film being distributed. Each film's weekend performance is updated immediately in Falcon, which means Fox executives have current numbers to look at every Monday.

"A lot of decisions get made Monday morning," Yaros says: whether to pull a poor performer, pump in more marketing money, extend a sleeper's run or put a smaller film in wider distribution. Yaros describes Falcon and 8-Ball as "the mainstay of the distribution process" for Fox.

MARKETING The biggest splash right now in movie marketing comes not from a studio's internal system, but a very external one, the internet. Last year's The Blair Witch Project opened eyes industrywide to the power of internet marketing. Hollywood executives snickered when Artisan Entertainment, a small ($400 million) company, paid a million dollars for the right to distribute the low-budget film. But Artisan had the last laugh. Blair Witch generated over $150 million in ticket sales, thanks largely to a low-cost net-based marketing campaign, notably including a site that intentionally left visitors wondering whether the story was fact or fiction, and an infectious word-of-mouth effort aided by e-mail. Web movie discussion boards hummed with Blair Witch anticipation long before the movie hit theaters. "Blair Witch was pivotal. It proved that the internet can drive lots of business to the theater. That's going to have a great impact over the next few years," says's Pandya.

Yaros says Fox-like the other studios-hasn't yet figured out all the ramifications of the internet for the movie business; he has more questions than answers about the future of the web as it applies to the industry. But the effort Yaros is spearheading to define Fox's internet strategy has received plenty of attention from the top of the corporation. "Senior management has become very receptive to these ideas," says Yaros. "They saw what happened to the music industry [with the net threatening the very existence of today's record labels] when that industry was myopic about it." That's a nice turnaround in attitude toward technology for a company that Yaros describes as being "an IT wasteland" prior to a mid-'90s management change.

Applications like S-Files, Deal Maker and 8-Ball clearly make the movie-making process more efficient. And the internet may open new possibilities for creative marketing. What these technologies don't do is guarantee that the script is great, the director right or the performances Oscar-worthy. "You can take the best script S-Files churns out and still make it into a flop," Yaros says. On the other hand, Yaros isn't content to limit technology's role to the back office. "Bringing IT into the creative process-that's the ultimate IT-business alignment in this industry," he says.

SCENE 2 - STARS ROCKED BY DIGITAL DIVAS The sexiest technology in Hollywood has long been the stuff that shows up on the screen-from 1933's stop-motion animated King Kong to Ray Harryhausen's work in the Argonaut and Sinbad movies in the '60s to Industrial Light and Magic's Star Wars special effects in 1977.

More recently, computer-generated (CG) characters have defined the cutting edge. Roger Rabbit made the scene in 1988 with humans and animated characters sharing the screen. Then in 1993, Silicon Graphics-created dinosaurs in Universal's Jurassic Park took CG characters another step forward. Pixar Studios went all the way in 1995 with the Buena Vista-distributed Toy Story, the first all-computer-generated feature film.

The next frontier: CG humans.

Toys and dinosaurs, impressive though they may be, are child's play next to creating a convincing CG human being. Audiences are extremely adept at spotting a fake, says Ivan Gulas, cofounder of PacTitle/Mirage Studios (PTM) in Los Angeles. (Gulas has recently terminated all of his involvement with PTM. He has founded a new company, in L.A.) Historically, the mainstay of PacTitle's business has been the titles and credits that roll at the beginning and end of a film-by Gulas' estimate, PTM provides that service for 80 percent of all Hollywood's feature films. But the company's hot project now is a software toolset called LifeF/x, which generates convincing animated humans.

Moviegoers in late 1997 saw some of PTM's handiwork strolling around the deck of the Titanic during long shots.

PTM describes LifeF/x more officially as a biological CAD system; it generates its human actors based on an enormous database of anatomical information, including the properties of facial tissue and the nuances of expression associated with particular emotions. The genesis of LifeF/x was in an academic project spearheaded by the University of Auckland, New Zealand, to create a database/computer simulation of the entire human physiology. The data in LifeF/x is captured from live performers going through an array of expressions; PTM's software identifies and collects information from 500 data points on the human face.

It's a marriage of human brainpower and machine brawn. PTM's principle employees hold advanced degrees in a remarkably broad array of scientific disciplines. Gulas has a PhD in clinical psychology; other PTM personnel are mechanical engineers, biomechanical engineers and physicists as well as graphic artists and animators. To execute these mad scientists' visions, PTM has an arsenal of hardware that performs the rendering necessary for this kind of finely detailed animation.

The company's facility, a modest-on-the-outside brick building just a few blocks from the location of Hollywood's first film studio on Sunset and Gower, is three years old and wired to the hilt. The computer room houses three generations of Silicon Graphics servers and a Sony PetaSite storage unit with 21 terabytes of storage-enough for about 100 feature films in compressed digital format, according to Gulas. All of the processing is centralized on the SGI boxes, which allow the graphic artists to roam freely to any of the 60 or so workstations in the building and still pull up their own customized desktops. The local workstations consist only of a monitor and keyboard connected by optical cable to the servers.

PTM's simulacra aren't perfect; sit one down on film in broad daylight next to real people and no one would be fooled. Nevertheless, so convincing is the LifeF/x CG character that it goes right to the heart of the man-versus-machine conflict in Hollywood. Some performers have expressed fear about being replaced entirely by soulless digital "humans," much as musicians were once afraid of drum machines and synthesizers. Gulas believes those fears to be unfounded. In fact, he says the LifeF/x software can be used to capture the facial expressions of a single performer and then re-create that expressive performance on any CG character, be it human or frog. The performance, he says, is still driven by the talent of the actor or actress. "We've just given them a new front end," Gulas says with a smile.

Now imagine the commercial applications of the LifeF/x project. Consider an animated customer service representative that works over the web. Once the customer downloads the face, the interaction relies on relatively compact sound and facial movement data. Suddenly your company has an automated-but-sympathetic sales personality over the net that is customized to the task at hand, never gets tired, never calls in sick and never leaves for better money or perks. PTM has a demo of such an application, dazzling not so much because of the animation but rather because of the way in which the animated persona responds in a highly customized fashion to the customer's input. "E-commerce is very driven by the human element," Gulas points out.

Although the demo does show that this type of technology opens up new possibilities for web-based service, there is one snag: hair. Making convincing CG human hair is even tougher than making a believable face. Miss Jessica, PTM's favorite CG spokeswoman, wears a hat that covers her head entirely. But it's presumably just a matter of time until PTM delivers that elusive good hair day.

SCENE 3 - STUDIOS COVER THEIR BACK ENDS As if talent, timing and onscreen technology weren't enough to worry about, movie biz CIOs have the usual concerns over infrastructure, office applications and the like. It's a hypercompetitive business. "It's not unusual to see four or five major films released at the same time," says Pandya, which adds up to pressure for low-cost, high-efficiency IT.

That kind of pressure has driven other industries toward packaged software, to let someone else worry about development and maintenance. No such luck in Hollywood, says Jim Halsey, CIO of Warner Bros. in beautiful downtown Burbank.

Because of the idiosyncratic nature of the business, most movie studio applications have to be homegrown. Halsey, for example, recently completed an evaluation of packaged payroll applications. "I was quite optimistic at first, but with the complexities of our pay structures we ultimately decided it was better to enhance our own [existing] system than to bang a square peg into a round hole" by trying to make a generic package work. Studios produce complicated financial statements called ultimates to track all revenues related to a given title and account for the distribution of those moneys among the innumerable concerned parties: the studio, the investors, the producers, the performers, the theaters and so on. Studios do use a few off-the-shelf applications, such as MovieMagic, a software suite from Burbank-based Screenplay Systems, for tracking and budgeting film production tasks.

Another possible IT-driven cost efficiency on the horizon is in distribution.

Fox already uses its corporate intranet to distribute trailers (the film clips used in previews and other promotions) for upcoming films. A simple browser interface lets Fox workers in various locales log on and download clips at roughly their normal playing speed; that is, a 30-second trailer takes approximately that long to download. That saves Fox big bucks (Yaros doesn't specify how much) by cutting out the need to physically copy and ship thousands of such clips to domestic and international exhibitors. Plus, the clips no longer get lost or fall into the wrong hands, as sometimes happened with the physical copies.

That sort of development eases the burden for the major studios but simultaneously puts the squeeze on other CIOs in Hollywood. Steve York, senior vice president of information technology at L.A.'s Rank Group Deluxe Entertainment Services, is responsible for five business units; four of them handle duplication and distribution of film copies and videocassette copies for the big studios. (York's fifth business unit is Pinewood Studio in London, where the most recent Bond movie, The World Is Not Enough, was filmed.) "We feel pressure from the studios to reduce costs every time a contract comes up," York says. The biggest threat to Rank Group's operations, of course, is that the internet could become the pipeline through which even full-length features are distributed to cinemas. Several vendors are experimenting with such service even now, York says, but he believes that for the moment the theaters' investment in their expensive installed base of 35mm film projectors is a hurdle that internet distribution will require some time to jump.

That gives Rank Group time to adjust its business model accordingly. For now, studios not only keep sending out VCR cassettes, they are using their product as a lever to create new business opportunities. Warner Home Video (a unit of Warner Bros.), for example, offers vendor-managed inventory as a service for large video merchants. "It's a strategy to increase sales. We'll analyze [your sales data] and replenish your inventory appropriately," Halsey says. The studio acts as a category manager for such customers, using daily EDI sales data to manage the inventory of all titles, not just Warner titles.

Diversification of that sort is in fact the order of the day in Hollywood. No major movie studio is an island. The days of the moguls, the Harry Cohns (Columbia) and Sam Goldwyns (MGM) and Jack Warners (Warner Bros.), are long gone. Today the studios have been absorbed into corporate conglomerates that typically include a television network and TV studios. Jack Warner's old sandbox is today a branch of Time Warner, which includes the WB Television Network and various other media properties. (And a lot more if the AOL merger goes through.) Last fall the studio's sound stages featured sets for a Clint Eastwood movie (Space Cowboys was the working title) and plenty of television shows like The Drew Carey Show. Walk a block or two from Halsey's office and suddenly you're in Chicago, on the set for NBC's ER, surrounded by 10-story brick facades and billboards for the Chicago Sun-Times. The view out Halsey's office window is of the beginning of what the studio dubs Laramie Street, a back-lot town where Gunsmoke and other westerns have been shot over the years.

A diversified product set helps buffer failures and provides possibilities for IT synergies. Fox, in fact, is developing customized versions of its Deal Maker application for its television and music businesses.

Indeed, the drive to control costs and hit financial targets is so intense that it has led to quite a bit of sharing among the majors. That in itself is not new. The practice of cooperation actually goes back to at least the 1930s, when the studios huddled together to wait out the Depression and the return of leisure spending. Warner Bros. kept its back-lot facilities open partly by renting half the space to Columbia, which had to sell its own back lot.

Today Warner's four-story warehouse of props and garments-eight miles of racks' worth-is open to competitors, who rent props for their own movies after browsing through rooms filled with furniture for Old West saloons, modern gardens, the White House or wherever. Every item is bar coded and tracked through an inventory system. The kicker comes on the way out of the warehouse:

A clipboard sitting on the loading dock notifies customers that with enough rentals they'll be credited with frequent flier miles on American Airlines.

A still more IT-based example of recent studio collaboration was HollyNet.

HollyNet was a secure, broadband communications network piloted by the University of Southern California with cooperation from Warner Bros., Pacific Bell and other corporations. "If you need to securely distribute your film to a post-production house [for dubbing, adding titles and visual effects and so forth], for example, you could do that over HollyNet," Halsey explains. Halsey says HollyNet was a research project intended to assess the state of the technology and make Hollywood folks aware of the possibilities. Now that the research project has ended, an unnamed private vendor is working to develop a commercial service offering similar functionality.

Whatever happens, technological collaboration will continue in Hollywood. Some of the results will be behind the scenes, and other results will be the scenes, and still other results will show up in completely different industries. As Ivan Gulas says, "Entertainment has played a major role in technology for a long time-it's such a fertile environment for working out bugs and pushing technology forward." And if Hollywood is good to technology, technology can also help Hollywood prosper. As they said in some old western, "There's gold in them thar hills."

Since reporting this story, Executive Editor Derek Slater has taken to wearing sunglasses everywhere. He can be reached poolside at

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