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DREAMWORKS PACT JOLTS RIVALS

Many Hollywood effects and animation houses are casting a wary eye on DreamWorks in the wake of the company’s announcement last week of its $50 million partnership with Silicon Graphics Inc.

The technology deal, announced at SGI’s Mountain View, Calif., headquarters by SGI chairman and CEO Ed McCracken, along with DreamWorks partners Steven Spielberg and Jeffrey Katzenberg, will allow the film studio to get its first animated film on screens by Christmas 1998.

Several established, well-regarded effects studios that also utilize SGI gear have been grumbling that DreamWorks, with its deep pockets and famous-new-kid-in-town appeal, has the ability to draw top level talent from other companies.

At the press conference, Katzenberg described an eventual project staff of 500 for the DreamWorks animation department, a figure that makes other effects and animation execs nervous.

“Those people have to come from somewhere,” said one industry insider.

But some established effects companies, despite the potential drain of talent, remain optimistic about the marketplace.

Tom Leeser, visual effects supervisor at Rhythm & Hues, which completed work on upcoming films “Batman Forever” and “The Babe,” said market shifts are inevitable whenever a new effects or animation house opens. “There are more job opportunities now than there are available people, so we’re going to see a big competition for talent. Anybody who understands computers in filmmaking is very valuable right now.” The move also puts DreamWorks in direct competition with other major studios releasing animated features, including Disney, Universal and Fox.

Katzenberg said the animation department at DreamWorks already is up and running. “It has been in production for over six months,” he said. “We have over 85 artists at work today.”

First fruit

Spielberg said DreamWorks has begun work on an animated film, “Prince of Egypt,” about Moses and the Ten Commandments. The feature is directed by Brenda Chapman.

Spielberg cited his experience with SGI technology, through pics employing visual f/x created on SGI platforms at Industrial Light & Magic, as a deciding factor in forming the alliance.

“We couldn’t have done ‘Jurassic Park’ without Silicon Graphics,” said Spielberg, whose Amblin Entertainment hit “Casper” got its leading digital characters from ILM animators operating SGI workstations.

A central goal of the alliance, which includes U.K. software company Cambridge Animation, will be developing an automated cel-animation system dubbed Digital Animation Dream-machine. When up and running in 1996, the system will allow computer animators to greatly speed up the cartoon-making process for full-length features.

“These tools have become the artist’s pencil and paper,” said Katzenberg, under whose guidance the animation department at Disney produced “Beauty and the Beast” and “The Lion King.” Katzenberg is leading the animation effort at DreamWorks, which plans to release one animated feature per year.

The Cambridge deal doesn’t exclude use of rival software packages, such as Softimage, an animation and graphics software package owned by Microsoft, DreamWorks’ partner for interactive ventures. SGI machines can use a number of different types of software.

Silicon Graphics’ core business has centered on design applications for the aerospace, automotive and architectural industries.

Historically, only about 10% of SGI’s business has focused on Hollywood, but that percentage has been increasing. SGI also recently established a Santa Monica subsidiary, Silicon Studio, geared toward the entertainment and interactive industries.

McCracken said his $2.5 billion company now is taking in $300 million in yearly revenues from the entertainment industry.

JEDI master

A precedent for the Silicon Graphics-DreamWorks pact was SGI’s alliance formed three years ago with Industrial Light & Magic, the visual-effects company owned by Lucasfilm.

Dubbed JEDI (joint environment for digital imaging), the arrangement is credited by ILM execs as key to the company’s ability to cope with the enormous computing demands of projects such as “Jurassic Park.”

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