Market Outlook, Industry News - 5/04
Issue: Volume: 27 Issue: 5 (May 2004)

Market Outlook, Industry News - 5/04

What's driving this renewed optimism? New projects remain the top new business opportunity for 93 percent of all studios and facilities—up 6 percent from a year ago. At the top of this list are corporate projects, television commercials, multimedia and DVDs, television content, and Web and interactive media projects. Many studios and facilities expect new business this year and, as a result, have been investing in production and creative capabilities—and hiring more employees—to help them win new projects and improve productivity.

More studios and facilities are incorporating the Web into their businesses, while at the same time, existing Web and interactive media companies say their business has improved. Some of the reasons for this trend include improved Web technology, the continued adoption of broadband, and movement of Web-based media and plug-and-play media devices into the living room. Moreover, many clients today expect their projects to be output for delivery via the Web, and for many studios and facilities, the Web is one of their primary sales and marketing tools.

Another industry trend is the use of high-definition (HD) video among the professional video community. Some 19 percent report currently using HD in their production, and almost half (48 percent) say they plan to use HD in production soon. Independent filmmakers top the list of those acquiring or shooting in HD, followed by post facilities and FX studios. Among those using HD, the top two formats are Sony's HDCam and Panasonic's D7HD (DVCPRO HD) format. Of the two, we expect HDCam SR's 10-bit 4:4:4 HD to be the wave of the future.

—Jim Whittington, principal of market research firm TrendWatch, Inc., Mill Valley, CA.

The University of Southern California's (USC; Los Angeles) School of Cinema-Television, in partnership with publisher Electronic Arts (EA), plans to add a Master of Fine Arts (MFA) degree in video game design beginning in the fall of 2004. Electronic Arts presented the school with a multimillion-dollar gift to help fund the program. EA president Don Mattrick will join Jeffrey Katzenberg and Steven Spielberg on the school's Board of Councilors. The USC School of Cinema-Television is celebrating its 75th anniversary this year. Square Enix (Tokyo), developer of the popular Final Fantasy and Dragon Quest game franchises, announced its acquisition of UIEvolution, a wireless software company based in Bellevue, Washington. UIEvolution will serve as the research and development center working on the advancement of mobile and broadband platforms as well as technologies that aid Square Enix in producing new network-based entertainment. Several Disney character animators have joined forces to form Project Firefly Animation Studios (Orlando). The new company was co-founded by Paulo Alvarado, Gregg Azzopardi, Dominic Carola, John Webber, and Glen Gagnon—who collectively worked on such Disney projects as Brother Bear and Treasure Planet. From its offices on the Universal Studios Florida back lot, Project Firefly will create family-friendly animations that combine 2D and 3D technologies. Technology-focused private equity firm Accel-KKR (Menlo Park, CA) announced a definitive agreement with Silicon Graphics Inc. (SGI) under which Accel-KKR will acquire Alias from SGI for $57.5 million. —CEH