fxpodcast #237: Carl Rosendahl, from PDI to the future of VFX

Carl’s first career was founding and building Pacific Data Images (now PDI/DreamWorks).

Since then he has been a Venture Capitalist, serial entrepreneur, mentor and now faculty member for Carnegie Mellon’s Entertainment Technology Center.

Carl is very well known and loved throughout the industry. He has given a lot to the industry and is still very active in the community.

Carl Rosendahl’s web site

(If you liked this podcast you may also like our interview with fellow PDI founder Richard Chuang.)

This year, Carl received the Visual Effects Society’s Founders Award.  The award was presented at the Annual Membership Meeting, and as is the tradition for the last six years, the awardee makes a speech, a real speech, about the industry, technology or something of real importance to them.
(VES Members can watch the speech here)

On Thursday, September 27th, 2012 Carl Rosendahl accepted his award, below is a transcript of his talk:
(Reproduced with permission)

I am privileged to be a part of an industry and company that helped change the world. When I started PDI in 1980, I joined a small community of people who believed that we could make something that was impossible to do at the time – that someday computers could be used to create images to tell stories on TV and in the movies. We knew it would take a long time, maybe 15 or 20 years to do.

We caused a fundamental shift in the way films are made and the types of stories that can be told. We did this with a passion for inventing, for building and wrestling with the technology until we could conform it to our will.

I’ve also had the unique opportunity to have had three different careers around this dream:
– As an entrepreneur helping to create and build an industry
– As a venture capitalist investing in entertainment technologies
– And now as a professor mentoring the next generation of creative talent

So it’s disheartening to me to see the industry I love so much behave like it’s dying, when in fact it is just being born.

I wish I was 23 again!

To understand my frustration, let’s take a quick trip through time, starting in the early 1800s, and look at what our options for entertainment are.

It’s 1820; we can read, socialize, play games and music, and dance with each other. We can create and enjoy art – paintings, drawings, sculptures. We can go out to hear live music, including classical orchestras with 35 musicians.

Photography is invented in the late 1830s, and by the mid-1840s becomes a popular way to record images of ourselves, our environments and our daily lives – dealing a blow to painters, who react by exploring their medium in new, more interesting ways.

Orchestras continue to be popular, and composers start to make them bigger, swelling to twice their former size – a trend that lures bigger audiences and creates larger concert halls.

In about 1878 both the phonograph and moving pictures are invented, and by the late 1890s they start to vie for people’s attention listening to music at home and watching Kinetoscopes in penny arcades.

Perhaps not coincidentally, composers like Wagner and Stravinsky expand the size of orchestras to almost 100 members, creating huge, loud, exhilarating experiences to attract their audiences.

In 1906 the first radio program is broadcast, ushering in a new era of live entertainment delivered directly into the house, followed closely by the birth of Hollywood, enabling the motion picture industry to thrive.

And orchestras get bigger. By the mid-1920s they hit their peak size of 110 to 120 members.

Then, in 1927, The Jazz Singer is released – the Talkies are born, and the role of the orchestra changes forever.

But the movies haven’t won. A year later, in 1928, Philo Farnsworth invents the television and the war for the moving picture audience begins. Movies add color. TVs add color. Movies get bigger. TVs get bigger. Movies add surround sound. TVs add surround sound. Movies get even bigger. TVs get even bigger. They both go 3D. Movies go onto TV. TV goes to the movie theater. Movies add a higher frame rate. TV already has it.

Our orchestras in the meantime have stagnated. Their traditional performances are funded as much by charity events as they are by ticket sales. The musicians spend much of their careers performing music that is the score behind the motion pictures made by the industry that sidelined them. But that isn’t to say that those changes were bad for music. Those same broadcasting and recording technologies created a new music industry that gave birth to jazz, rock and roll, and down tempo trip hop techno pop.

Today, you’re the musicians in that orchestra in the 1920s. There are big changes happening that you can ignore or take advantage of.

The only issues I hear about are outsourcing, tax incentives, global competition, unfair business practices, runaway production, trade organizations, unions, ownership, piracy, the race to the bottom.

It’s really important stuff; I understand that, I’ve run a business.

There is no solution, only opportunities.

If you think a trade organization will solve your problems, then get off your ass and make one. Start small, pick an easy problem and fix it. Grow from there to bigger, harder problems.

A “level playing field” won’t solve all the problems. You can’t legislate or otherwise keep people from willingly losing money.

Getting participation won’t be free. You have to put skin in the game, and in Hollywood’s case, skin is cash.

Globalization: It’s here to stay, deal with it.

Diversification gives you a broader base of business. You can invest in change that way without even having to go all in.

There isn’t enough movie work to go around. It’s simple supply and demand. You can’t limit the supply of companies willing to do the work; in fact it’s still growing. You need to create demand for something that you can do better than anyone else. And not just better, but you need to be unique.

The only way you’re going to convince your customers that you’re not a commodity is by being able to offer them something no one else can. If you’re offering the same product with the same terms, then as far as they’re concerned you are a commodity. You have to be different to compete.

Digital Domain has been a voyeur’s delight, but don’t get too distracted by it. There is only one lesson to learn there, and it’s a general life lesson not a VFX lesson: don’t spend money you don’t have. DD is not a specific indicator of anything wrong in this industry other than that company’s bad management. We saw this happen before in 1987 with Omnibus – they went public on the Canadian stock exchange, then gobbled up two other companies that were struggling, with the hope that even though they were losing money they’d make it up in volume somehow. That also lasted less than a year. But great companies like R&H rose up out of those ashes and did it right.

DD’s strategic thinking wasn’t necessarily wrong, but its implementation was crazy. Ender’s Game might have worked. Tembo might have worked. An animation school might have worked. Doing military contracts might have worked. But they only had the resources to pursue one of those things.

My recommendation: If you weren’t at DD, then don’t waste any more of your time on fretting about DD. Move on and dedicate your precious brain cycles to making things better for you.

And don’t spend money you don’t have.

So maybe you think you’ve fixed it. It seems there’s a level playing field, and while competition may be stiff, at least nobody feels like they’re getting screwed. The death of our industry has been averted, or at least postponed. 

But let’s go back to our history field trip. It’s the late 1960’s and life is good.

While the movies and TV are duking it out, groups of researchers under a government contract are figuring out how to network computers together, and in 1969 Southern California and Northern California talk over the ARPANET for the first time. Jump forward a bit to 1995, the year the DVD is introduced, and the Internet is set free upon the world, becoming officially commercialized.

So now again, we find ourselves in 2012. Our options for entertainment and idle time amusement seem endless. The music we used to have to go to the concert hall to hear came directly into our houses with the advent of radio. The transistor radio made that portable, and the Walkman allowed us to select our music while on the move. Now because of the Internet we can choose from millions of songs and have them streamed instantly to us anywhere, anytime in glorious high fidelity. That’s happened with video, movies, and even with our old friend the book.

Now, we can read or socialize. We can create, share and enjoy music, photos, videos, television and movies. We can play games alone, we can play games with friends, or we can play in a clan against 1000s of other people. We can blog, tweet, follow, unfollow, friend and unfriend. Anytime, anywhere. That’s a lot of competition for our free time.

It astonishes me that people keep going to the movies at all. But they do because the experience keeps getting bigger and more extreme – which it must do to compete with all our other activities. Movies have to give us magic we can’t experience in any other way. And that’s what visual effects do, and why every major film depends so heavily on what we do. They have to. Go big or go home; or go mobile.

But I don’t believe that’s sustainable. All those other options will catch up. High end game experiences are becoming cinematic and letting us into the action. The march of technology will create dozens of more options for the audience. Inputs won’t be limited to mice, keyboards and touchscreens – gestures will be common place along with advanced biometrics. And that high end experience is going to go mobile with higher resolution and better displays that eventually will beam directly onto our retinas without the need for a screen. Seriously.

Entertainment will become integrated even more tightly into our lives. But not as movies.

That’s called “disruption.”

Right now you’re still the musicians in that orchestra in the 1920s. There are big changes happening that you can ignore or take advantage of. But this time, you’re sitting on the technology and creative skills that will help define the entertainment experience for the next century.

And still, the only issues I hear about are the same ones: outsourcing, tax incentives, global competition, etc.

Twenty years from now it does not matter. At all. Because twenty years from now the business that you’re in today isn’t going to be relevant. If you don’t change and figure out what your new business is, then you will be sidelined.

So here is my frustration: Where is that vision? Who’s looking ahead and talking about what they’ll be doing in the future that’s impossible today?

I care about that future.

My students do, too. And they are your current audience; they are your employees; and they are your future competitors. They have a big vision for their future, and they will make it happen.

My students are from the United States, Canada, Venezuela, Columbia, France, Spain, South Korea, Singapore, India, and China. That’s this semester. If you’re xenophobic, or are a protectionist about your community, state, country, continent, or hemisphere, you can learn something from them. They’re smart, they embrace their multi-cultural experiences, and they work together easily despite the seven (or more) native languages they speak.

And here’s an interesting irony: like you, they all believe they need to leave their native countries to find work. But they want to come to California because that’s where the opportunities are.

Your business concerns are irrelevant to them. They want to follow someone with a great vision or they want to be entrepreneurs themselves.

They are thinking young. They have time to pursue their dreams. They are looking far into the future.

What about you? What’s your vision? What impossible problems are you trying to solve?

Are you going to be just a member of the orchestra playing the same old song, or are you going to stand up and be a part of the future of this industry?

Thank you.

6 thoughts on “fxpodcast #237: Carl Rosendahl, from PDI to the future of VFX”

  1. Firstly Carl, Thank you for taking the time to record this podcast. I enjoyed listening to this podcast. But I have to personally disagree that we must move away from linear story telling, there will always be a place in my heart for movies and good novels. For me watching movies is a way to kick back and relax for a few hours and enjoy a good story or experience good visuals. I am lazy, I don’t really want to have to work for my entertainment. Playing games take way to much time, who has 60+ hours to complete a game? Film making to me is a great craft. To tell a story within such a short time is not easy but when done right its great. I think both film and games will always exist and cross overs will happen no doubt. With respect, John.

  2. Interactive media vs. linear media is a big difference in cost. Interactive “anything” is fine for those who can invest more money to produce it.

    Carl Rosendahl also thinks movie theaters are going to be around for a long time. There’s no way that will be possible, because larger TVs and on-demand movies are what’s closing down the big theaters. If the premiere of Star Wars 7 was initially available as on-demand (not held as a release hostage by the distribution studio) a massive percentage of people would just watch it at home and never go to the theater. No one wants to get in the car and go to Blockbuster anymore. An estimated 50% of Christmas shoppers did their shopping online this year. It’s easy to see the pattern and see the future.

  3. From the book Being Digital by Nicholas Negroponte – originally published in 1995:

    A book has a high-contrast display, is lightweight, easy to “thumb” through, and not very expensive. But getting it to you includes shipping and inventory. In the case of textbooks, 45 percent of the cost is inventory, shipping, and returns. Worse, a book can go out of print. Digital books never go out of print. They are always there.

    Other media has even more immediate risk and opportunity. The first entertainment atoms to be displaced and become bits will be those of videocassettes in the rental business, where consumers have the added inconvenience of having to return the atoms and being fined if they are forgotten under a couch ($3 billion of the $12 billion of the U.S. video rental business is said to be late fines). Other media will become digitally driven by the combined forces of convenience, economic imperative, and deregulation. And it will happen fast.

    — end excerpt—

    1995,,, loved that book. Greed figures heavily in this – protection of existing business models – Blockbuster’s massive decline was due to believing those late fees would continue forever (and providing a terrible customer experience). I think theaters are heading down the same path – high ticket prices, forcing 3D for profit instead of creative, outrageous concession prices, not ensuring a premium experience… all while ignoring the reality of an improving home experience and even encouraging piracy by tightly controlling release windows.

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