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Jeffrey Katzenberg and the Future of Cinema

Jeffrey Katzenberg and the Future of Cinema

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Texas Instruments' DLP Cinema is the finest digital film experience around. If you've been fortunate enough to see a digital film presentation at a major cineplex, chances are it was projected in DLP. If you've seen Universal Studios' "Shrek 4-D," you've also send DLP projection. So how does DLP Cinema work?

1. A digital projector based on DLP Cinema? technology transfers the digitized image file onto three optical semiconductors known as Digital Micromirror Devices, or DMDs. Each of these chips is dedicated to one primary color-red, green, or blue. A DMD chip contains a rectangular array of over one million microscopic mirrors.

2. Light from the projector's lamp is reflected off the mirrors and is combined in different proportions of red, green and blue, as controlled by the image file, to create an array of different colored pixels that make up the projected image. Think of the DMD mirrors as the colored cards held up by an audience in a sports arena to create a giant image. Each person holds up a single colored card, yet when combined, these thousands of cards create a picture. If the card colors are changed, the picture changes too.

3. The DMD mirrors tilt either toward or away from the light source thousands of times per second to reflect the movie onto the screen. These images are sequentially projected onto the screen, recreating the movie in front of you with perfect clarity and a range of more than 35 trillion colors.

That's right - 35 trillion colors! And studio executives love it. Almost all of Disney's major films are being shown at Hollywood's El Capitan Theater (which Disney owns) in DLP Cinema. Eddie Murphy loves it. Practically all of his films over the last five years have been released in DLP (I'll never forgive myself for seeing "Pluto Nash" just because it was being shown in this digital format). George Lucas is gaga over it. And Jeffrey Katzenberg, the cofounder of Dreamworks and former head of The Walt Disney Studios thinks DLP is the future. Here's what he had to say during Rich Templeton, TI's CEOs keynote speech at this year's Consumer Electronics Show:

RICH TEMPLETON: Now, from small screens to big screens, options and quality for digital TV and video continue to improve. We're seeing the same kinds of improvements as people move from their living room to go out on the town. Going to the movies is one of the great American pastimes and DLP Cinema is TI's solution for bringing incredible picture quality to the digital movie theatre. DLP Cinema relies on our most advanced Digital Light Processing technology. It can create 35 trillion different colors and that's more colors than you can capture with film.

To give you a peek at how life at the movies is changing, we've installed a DLP Cinema in the back of this theatre and we're going to use it to visit with our next guest. He's everybody's favorite ogre, our swamp-loving fellow who churns out box office revenue like dragons breathing fire. Via the wonder of DLP Cinema, here's a true fairy tale hero, "Shrek."

(Screen lowers and segment of "Shrek 2" is shown in DLP Cinema)

Now, we couldn't actually get Shrek here today in person; it turns out he had a conflicting engagement in a land far, far away, but we do have a live guest that we're very excited about. In fact, he's one of the key people behind the company that created "Shrek" in the first place.

He's produced some of your all-time favorite movies, he was the president of Paramount Pictures and chairman of Walt Disney Studios. Today he's the cofounder of DreamWorks Studios and CEO and director of DreamWorks Animation. Please welcome Jeffrey Katzenberg. (Applause.)

DreamWorks co-founder Jeffrey Katzenberg (l.) talks with Texas
Instruments CEO Richard Templeton at the International Consumer
Electronics Show, which was held earlier this month in Las Vegas, NV.
Photo by Jonathan Kleiman. Copyright LPN Media.

RICH TEMPLETON: Well, Jeffrey, thanks for coming to our show today. I think you did have a chance to participate this morning in Carly Fiorina's keynote, so I guess we should call this your CES sequel or Katzenberg 2, if that's okay. You're an expert at sequels.

It's really fascinating, you saw the example of Shrek playing and what's happening and in many ways digital is revolutionizing the movie and the film business. And maybe you could take just a couple minutes, give us a sense, maybe starting on the creativity side, what does it unlock, what does it let you do?

JEFFREY KATZENBERG: Well, let me talk about it in terms of both on the animation and the live action side. First on the animation side, you know, digital has really created a revolution in our business. In literally less than ten years now we've seen the business pretty much transition from 2D into CG. And I think probably the most compelling thing about CG is how immersive it is for the audience. It really is an opportunity for us to take our audience into a world that's got a verisimilitude, a sense about it that feels as though it really envelops you in its story and in its characters and it's allowing us to tell different stories and to tell the story that we do tell in way more complex and creative ways.

Let me give you a teeny, little example of this. In 1988 "The Little Mermaid," which was the last movie that was inked and painted by hand, the color palette for the character of Ariel, the lead, originally was designed with 11 colors in terms of different aspects of skin tones, hair, costume and the movie was over budget and behind schedule and in order to get it back on schedule and budget we cut the number of colors from 11 to 7.

RICH TEMPLETON: It sounds like our industry sometimes.

JEFFREY KATZENBERG: Right. And so today if you were to make that, as you look at Will Smith's character in "SharkTale," there are 300-some-odd colors used and it's unlimited, it could be any number of them.

So it's had such a dramatic impact and become an enormous creative tool for the artists, empowering them in ways that I think none of us really imagined or anticipated. Well, I shouldn't say none of us, I'd say John Lasseter did, who really is the pioneer of CG animation.

Interestingly, on the live action side of it, DreamWorks released this last summer a movie called "Collateral" with Tom Cruise that Michael Mann directed and it probably represents to this moment in time right now today in terms of what's been in the movie theatres probably the most ambitious film that has embraced digital production, digital cinematography in the process of making this movie and for Michael, who we talk a lot about this, as a storyteller creatively he literally would not have made the film were it not for the creative empowerment that came from digital production. His ability to shoot at nighttime, his ability to shoot, you know, almost 30 percent of that movie literally takes place in a cab. With film you could never get a depth of field, you could never actually get a sense of the environment of Los Angeles as you were moving through it, the movie would have been too claustrophobic. The shots that he did it at night, the coyote walking across the street, literally not achievable using film.

So from a creative standpoint I think Michael would say that the film was not something that he could have or would have been able to make without this new technology.

RICH TEMPLETON: That's fascinating. How far in terms of we've got the revolutionary leaders like yourself and working with folks like you, how much change have we seen or are we just at the beginning in terms of the impact on the creative side?

JEFFREY KATZENBERG: Well, it is very much just the beginning. Again, for CG animation there's now been nine movies made in history that are really sort of the full bells and whistles production. And you think of that nine pictures in the ...

RICH TEMPLETON: I think of your name associated with a lot of those nine.

JEFFREY KATZENBERG: Well, not enough, thank you. But that is a business that's not out of the in, we're not past our toddler stage yet and the sky is the limit. I mean, the opportunities, the rate of change, the rate of empowerment that comes; this again is a tiny example of this one little detail, the facial structure mechanism for the character of Shrek, so in the three years between "Shrek 1" and "Shrek 2" the complexity of what we were able to do in "Shrek 2" is times ten what we were able to do on "1."

So whether it's the amount of controls -- and these are all things that our artists use to act, eyebrows, skin movements, cheeks, jaw line; it's just the more and more detail and complexity that we give to it the better the acting is. So this rate of change, I have to say that I think Moore's Law actually seems to have its own application in our business, which is every 18 months it seems to double in its speed and its complexity and its capabilities. It's missing that part of getting half as expensive each time though so that part is not working out so well. We've got half of Moore's Law, the other half we've got to work on.

RICH TEMPLETON: Well, it's clear as we look out into the world today that communications and entertainment are driving technology and I think you just really hit the nail on the head. We are investing tremendous amounts of money to put more capabilities in extremely creative people's hands like yourself and fascinated by it. But I know also as it comes the aspect of moving the creative side to the production, post production and then distribution there's a lot of change going on and underway. Can you speak a little bit about what you see there?

JEFFREY KATZENBERG: Sure. Well, I'd kind of divide it into a couple things. First is as a productivity tool again it's having a tremendous impact and we do actually see savings. The fact is again just looking on the animation side of it first, our costs of our films have actually stayed pretty constant now for the last three years and since our movies do take between three and four years to make, we actually can look out over thenext three years and see again that it's holding pretty constant. That's a six year period of time. Clearly the costs for manpower goes up a little bit every year but we are getting productivity savings that are offsetting the sort of natural cost of labor that goes up. So there is a value on that.

On the live action side, again Michael Mann, you know, I have to use as sort of the example of the moment, there is absolutely no question, first of all he can do a take that's 17 minutes long, in film you've got to stop, you've got to change cartridges and you don't have the capability of doing that. The lighting packages, all of the support personnel involved in it, the stuff is so much lighter and more mobile and all of those things, so
once again there is a real productivity savings.

I think the place that people are focused on right now, and rightfully so because it's the place of greatest opportunity in a way, is how do you now move into the distribution and the exhibition side of the business and there's lots of talk, there has been a lot of talk about it over the last few years and there is absolutely no question about if; it's when.

And I think from a filmmaker standpoint and a distributor standpoint and an exhibitor standpoint it cannot happen soon enough. It has tremendous, tremendous cost savings involved in it on all sides of the equation and ultimately, which I think will be the real driving force for it, is for movie-going. It is such a richer experience, the quality of presentation in a great digital cinema is unequal. And we've had a lot of experience with it on the animation side of it.

And I can tell you that if you look at "Shrek" on film you are seeing at the very most, in perfect presentation at the very most 80 percent of what, in fact, we have created. You don't see a tremendous amount of atmosphere and detail and lighting. On one of these great monitors, an HD monitor and a high-end DVD what you would see would blow you away in the detail and the creativity and therefore the viewing experience.

And to me one of the things I'm really excited about, because again it's sort of at the essence of what we do, we create our product three-dimensionally. So the richest experience for a moviegoer is actually to see it three-dimensionally. One of the things that will happen I think in reasonably short order of cinema around the world converting from film to digital will be a broadly available exhibition of movies in 3D, not as a gimmick but as an immersive movie-going experience unreplicateable in your home, by the way, which is part of why it's just good business. As the home experience gets better and better and better, if exhibition, if this business is going to stay robust, it must offer a better experience.

And again exhibition has done a fantastic job. For all of you going today, you know now the movie theatres that you go into have stadium seating in them, their presentation is terrific, those boxes that were around 10 and 20 years ago are for the most part gone and the cinema experience is way, way better today than it was even five or ten years ago. But then when you look a handful of years into the future, we have to offer the audience a
unique experience and I think the digital cinema and digital presentation is of the essence to us achieving that.

RICH TEMPLETON: Well, we are in many ways lined up. As you see the demo of the 1080P TV that's over your shoulder, it makes a brilliant image when you see it exhibited, but what you're doing creatively ...

JEFFREY KATZENBERG: If I can carry it, I can take it, right? Isn't that the rule? (Laughter.)

RICH TEMPLETON: I've got a chance to slow you down versus Howie.

JEFFREY KATZENBERG: I should say. (Laughter.) Howie didn't get away with the good stuff. (Laughter.)

RICH TEMPLETON: But really as we keep taking even the home experience up we agree very strongly we want to put more powerful tools in your hands and in the exhibition hands to create a very unique experience in the cinemas. We're hoping that breaks through pretty soon and we hit that curve.

JEFFREY KATZENBERG: Well, I think it is, you know, a number of the things that we've done together people have followed and TI has been a great partner to DreamWorks. "Shrek" was the first animated movie accepted into competition at the Cannes Film Festival in over 50 years and when we brought it there one of the things that we were able to do was to get the Cannes Film Festival also for the first time ever to have a digital presentation and people were blown away by the quality of what they were able to see.

Once again this last September the Venice Film Festival invited "SharkTale" and for those of you that were at the presentation this morning you know I talked about some of the drama of our getting the movie finished in order to make it there. The other half of the equation was the drama of putting up a six-story inflatable screen, one of the largest screens ever built, and the fact that this was inflatable, and then we put it in the middle of San Marco Square in Venice and showed "SharkTale" in digital with TI projectors and it really was an extraordinary experience.

And I think that what we are trying to do is to kind of coax along all the involved parties, including the consumer and the media to create this real interest and real demand for something that makes tremendous business sense.

RICH TEMPLETON: Well, Jeffrey, maybe I'm asking a dangerous question but can you pick your favorite film that you've worked on or is it always the next one?

JEFFREY KATZENBERG: "Madagascar" is my favorite film ever. It will be out in May of this coming year. (Laughter.) It's really, really funny.

RICH TEMPLETON: That was not an arranged prompt.

JEFFREY KATZENBERG: And I brought a trailer of it just in case I was asked that question.

RICH TEMPLETON: Well, the best part that I find about this opportunity today and getting to sit with some of these is I get to actually see these trailers before my kids do and they come home and tell me about them, so a great opportunity to be here and to see that. So do you want to try to give some introduction to the "Madagascar" clip that you have and give us a sense of what really stands out or what's different or unique in your mind of
what the team has achieved?

JEFFREY KATZENBERG: No, not really. (Laughter.) Just play the trailer and then we can talk afterwards.

RICH TEMPLETON: So they should watch some other movie coming out this year? But, no, please, if you have any setup on it or if we want to just ...

JEFFREY KATZENBERG: No, I think we can run the trailer and it actually kind of tells the story, which is what a good trailer does.

(Video segment, followe by applause.)

RICH TEMPLETON: Fantastic is all I can say.

JEFFREY KATZENBERG: Well, we've got our fingers crossed. You know, each one of these movies we just try and do something that's unique, never been seen before and, as I say, with a technology that just seems to empower the artist and push their imagination, we just love making these movies, it's a lot of fun for us. And you know we are, we're very, very excited about this.

RICH TEMPLETON: Well, we certainly loved seeing it. All of us are either parents or grandparents or children that haven't grown up yet and seeing these films like "Shrek 2," we're looking forward to this, I just can't describe the feeling it gives. I know how our kids react to it. It's a great presentation so you guys should be extraordinarily proud of what that team can do and has presented.

So we certainly appreciate you joining us this afternoon and running the Katzenberg 2 sequel. We wish you the best of luck with "Madagascar" and we encourage you to keep wowing the consumers of the world.

JEFFREY KATZENBERG: Well, thank you, Rich, appreciate it.

RICH TEMPLETON: Thanks very much.

JEFFREY KATZENBERG: And, as I say, we appreciate what you guys are doing.

RICH TEMPLETON: That's great.


RICH TEMPLETON: Jeffrey, thank you. (Applause.)

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