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Yet another shockwave just hit the visual effects industry as Jellyfish Pictures ceased global operations, on the heels of Scanline VFX shutting down its German facilities and Technicolor shuttering its global operations and entering bankruptcy proceedings. Not surprised by this economic turmoil is Scott Ross, who experienced firsthand the inequity of the Hollywood studio system as the general manager of Industrial Light & Magic from 1988-1992 and co-founder of Digital Domain, where he worked from 1993-2006.The lessons he learned provide the narrative spine for Upstart: The Digital Film Revolution Managing the Unmanageable, written by Ross and Joanne OBrien-Levin and published by Native Book Publishing. In thinking about writing a book, Ross considered the memoir Enough by Cassidy Hutchinson, a former White House aide and assistant to Chief of Staff Mark Meadows. I found that I was more interested in how Cassidy Hutchison became a Trump supporter than her personal story, states Ross, who decided to seek out a ghostwriter. It was going to take a lot of time and energy to actually write the book, so I looked at Ed Catmulls book Creativity, Inc.which did quite well, and he had a ghostwriter. I asked a friend in Arizona if he knew anybody who was a good ghostwriter. I ended up having a conversation with Joanne OBrien-Levin and we clicked.Originally, Ross looked for a traditional publisher but found he needed an agent. All of the agents came back with the same comment, which was memoirs dont sell unless your last name is Obama or Trump, he remarks. It needs to be rewritten as a business book. I hired an editor who told me, You need to have 15 principles that are business oriented that resonate with all kinds of business people. Each one of those principles becomes a chapter and you write to that. After thinking about it a lot, I revisited why I should write the book and said, If the journey has lessons to be taught that are business, creative, and entrepreneurial, while at the same time is wrapped around things of interest and famous like Titanic and Lucasfilm, thats the story which needs to be told. I fired the editor and realized that I would never be accepted by a traditional publisher. I pinged about 15 self-publishing organizations and ultimately decided on Native Book Publishing.The books title dates back to 1994 when questions arose as to whether Digital Domain would go out of business. Employees were given T-shirts with the word upstart on the front. Ross laughs, What a perfect name for the book because it describes me as a person as well as the company and the attitude we had.Watch AWN / VFXWorld's 2-part interview with Ross at FMX 2015:Ross research involved talking to numerous people as well as referencing a personal blog that essentially served as a journal. There are things that I spoke to people about and they would say, I dont remember it happening that way, states Ross. And we would talk about it. The book didnt change my opinion of what happened; I put down on paper how I viewed things now that Im an old guy. At the time I was fighting wars, not battles. There was a lot of anger, and I was hurt. That pain of being written out of history and pushed out of the way has subsided. Now in my 70s, I can look back and say, Im grateful for some of the things that happened. In fact, I would not be where I am in my life had not those things happened. Ross anger and hurt stem from his feelings he was not properly acknowledged in the Lucasfilm and Imagine Entertainment documentary miniseries, Light & Magic, for his contributions in transforming ILM, with praise instead focused on his protg, Jim Morris. It has also been painful to him that James Cameron and Stan Winston took full credit for the establishment of Digital Domain while Ross hardly gets mentioned, despite being the primary force behind the VFX companys founding as well as running day-to-day operations. A constant joy throughout the emotional rollercoaster has been music. The saxophone is Ross instrument of choice. Its still a big part of my life, not only playing and practicing, but listening. The lesson I learned from music is that the whole is greater than the sum of the parts. Thats the same for a career business. Ross goes on to share that advertising executive Jay Chiat was a mentor. An important part of being a leader is not going in front of your team and talk about things in a corp speak way thats not transparent, he says. You need to tell the truth, be open about it all, and instill courage, excitement and a larger mission than what your employees might think that theyre on. Thats what I learned from Jay Chiat.He then notes that the three pillars for a business are finance, technology and culture, adding, Finance people are generally brake pedals. Theyll tell you, Theres not enough money. Come back with a better budget. Creative people are generally gas pedals. They want to go faster, have better software, and more time. If its not good enough theyll continue to work on it. You need a leader who understands how to use the brake, step on the gas, and drive the car. When theres an accident up ahead, he or she knows to slow the car down. But when theres an open road, put the pedal to the metal. Those kinds of people are generally rare.Core principles Ross believes in include looking for opportunities in problems, allowing for mistakes, and giving power away. Theres that scene in Apollo 13 when Gene Kranz, played by Ed Harris, realizes that there is a severe problem with the capsule in space, throws a box on table, tosses stuff into it, and states, This is what youve got to work with. Now fix it, Ross states. Often times, when people are faced with critical decisions and the sky seems like its falling, they dont look for possible solutions let alone a new way of doing things. You have to recognize that the sky is falling, be honest with your people, and say, Lets all get together and figure out how were going to fix this. The tolerance for mistakes, however, depends on the financial state of the company. Apple can make big mistakes and not suffer from it. But if youre Digital Domain, where your revenue is $65 million a year and your profit margin is three percent, you cant afford big mistakes. Adding that micromanagement is counterproductive, Ross shares, Giving power away is the most important one. Youve heard it hundreds of times from people in business, which is, I hire people who are smarter than I am and let them run with it because theyre better at it than I could ever be. Even if youre the smartest visual effects producer in the world you cant manage six shows and do them well.As Ross sees it, the billion-dollar question is how to unite the fractured visual effects industry to achieve a financially sustainable business partnership with Hollywood studios. Unfortunately, I tried for 25 to 30 years [to establish a trade association] and was not successful at it, he says. In the mid to late 1980s, there were only four or five shops that were doing cinematic visual effects and the shop that I was running [ILM] probably had 75 percent market share. We had profit margins anywhere between three to seven percent, which is not enough to do much of anything. The reason it was never a really profitable business was there were only five or six clients; they talked to each other and had a trade association. The studios understood that the business model that was in place at that point and until this day was beneficial to them. As there were more visual effects companies coming online, there was a studio executive who was quoted as saying, I dont feel like Im doing my job unless I put a visual effects company out of business.Visual effects companies bear the entire responsibility for delivering final sequences on projects where determining every element needed on-screen is often a moving target throughout the production. Ive never heard a movie director say, I want my visual effects to look exactly like that last movie you did, remarks Ross. No. Every film is a new invention. And they want it faster. Even precise instructions change. When I started Digital Domain and was working with James Cameron, we realized that one of the biggest problems in the visual effects pipeline was that the director never had any relationship with the men and women actually creating the effects. Its an impossibility. We tried it. The reason why its impossible is the director is a general out in the field fighting this war on the Eastern Front and your troops are sequestered underground. The only time that he has to go see them is when theyre delivering shots and says, That sucks. [That happens] even if the directions are precise. Ive always felt that an international trade association was the only way to address the business model, notes Ross. It has nothing to do with price fixing. Its to do with how businesses charge [for their services]. Diversity makes visual effects companies less financially vulnerable. Commercials divisions were established at ILM and Digital Domain where we were doing adverts around the world. We started location-based entertainment activities where we would do theme park rides. Had we not looked at those opportunities and figured out a way to utilize the skills of the men and women already in the studio, and bolted on a marketing and client service team that had expertise in a specific area, we probably would have been out of business.Ross also says that fiscal sustainability can be achieved through owning intellectual property. If we look at any of the visual effects/CGI companies that actually made it and had value, almost every single one produced their own IP in the animation world, whether it was Blue Sky Studios, Pixar or Pacific Data Images. They were similar in many ways to Digital Domain and ILM but decided to become animation studios. Then they wound-up, and this is the magic, having a distribution deal or being acquired by a major studio. With the financing and distribution, they transitioned from being a service company into creating their own IP. In the beginning Hollywood studios had their own effects departments. As recently as 2022, Netflix purchased Scanline VFX while Sony Pictures Entertainment bought Pixomondo. Were still in the cycle of studios acquiring visual effects companies, but we might have seen the first crack in the wall where Netflix closed Scanline VFX in Germany, observes Ross. A studio realizes how important visual effects and animation are and ends up acquiring or starting its own effort. The studio runs it for a couple of years and discovers, There is no money in this. Let the outside guys lose the money. Then video game technology comes around, like Unity and Epic Games; those companies think, Maybe our big area of growth is in the movie business. Unity spent ridiculous amounts of money on acquiring Wts software group only to find out, What the hell are we going to do with it? This cycle keeps on going. Of course, compounding recent VFX industry upheavals has been the expansive growth of AI, which Ross acknowledges will fundamentally change society for better and worse. AI is going to do incredible things in lots of different areas that will help humanity, he believes. But if we limit the scope to media and entertainment, its going to have a major impact. Look at the reactions, where unions are stipulating that you cant recreate the voices of actors. Look at the guardrails theyre trying to put in place.As the studios continue applying pressure to produce good work done faster and cheaper, the use of AI will significantly eliminate visual effects jobs, which Ross says are 80 percent of the overhead. The majority of visual effects workers are not visual effects artists, he explains. Theyre at best putting the arms on the Venus de Milo. Theyre not creating the Venus do Milo out of pure granite. The faster and cheaper mode has forced people to do things that arent always feasible [such as setting up facilities in countries with a lower cost of living], and with the new technology of AI and machine learning, then generative AI and agent AI, most of those tasks [roto, paint and compositing] in my opinion will become obsolete.However, according to Ross, AI will not democratize filmmaking in that there is one fundamental element that will remain elusive. I have not yet seen an example of an AI film where I went, Wow. I care about these characters and want to learn more about them, he concludes. Its pulling my heartstrings, making me laugh and cry. What I have seen is amazing production value, and production value is a whole lot easier, particularly with the toolsets that are available today, than actually creating great stories.You can purchase Upstart: The Digital Film Revolution Managing the Unmanageable at Amazon.com. Trevor Hogg is a freelance video editor and writer best known for composing in-depth filmmaker and movie profiles for VFX Voice, Animation Magazine, and British Cinematographer.
