VES Summit 2012: The Intersection of Content and Business
While last Saturday's annual VES Summit (held once again at the Ritz Carlton Hotel in Marina del Rey) focused on the intersection between creative content and the business bottom line, Digital Domain dominated the discussion. Co-founder and former CEO Scott Ross implored the industry to get behind a trade association and stand up to the studios, while new CEO Ed Ulbrich discussed the reboot of DD 3.0, which he said was more like 1.0 so far.
"The business is much too warm and cuddly," Ross protested. He said the studios need to take on directors when movies get out of control and the VFX companies need to wield their power to negotiate better compensation with the studios. He's all for unionization but declared that it's a question of timing and now is not the time. Better to first form a trade association to begin banding together in solidarity.
Ulbrich said the recent $30.2 million bankruptcy sale to Beijing Galloping Horse and India's Reliance has been a wild ride. The federal court ruling got rushed through in a record nine days because DD demonstrated how much VFX business hung in the balance (albeit anonymously because of non-disclosure agreements with various studios). In addition to buying DD studios in Venice and Vancouver, the new owners also get DD's co-production stake in next year's Ender's Game sci-fi adventure.
They paired up like Survivor and now DD has the capitalization to continue as a thriving VFX studio. What went wrong? He said their various initiatives just didn't come together as smoothly as they planned. They intend on focusing on the VFX business, but they'd still like to dabble in the content game whenever possible and they plan on developing their side holographic initiative. Eventually they may open a VFX studio in China as well. "We need to send people over there to help close the [talent] gap. Going to India allows us to mature in LA by scaling up with larger projects. India is part of the future of the VFX business."
Ulbrich emphasized that we're operating in "a culture of frugality" and operating cash flow. It's best to focus on what you do well and being opportunistic. "From one day to the next, I didn't know if I was saving the company. It was like Indiana Jones with the ball running at me."
Speaking of VFX business, a discussion about tax incentives was led by two Walt Disney Co. vets: Mary Ann Hughes, VP, Film and Television Production Planning, and Ruth Hauer, VFX Executive. The troubling news is that out of the 39 states that offer incentives, only seven offer standalone VFX credits, and of those seven only four can tackle the most VFX intensive work. Indeed, the problem in California with getting standalone VFX incentives is that legislators insist on proof that production would stay locally even with those incentives.