Effects Look Better on Screen Than Balance Sheet : Simi Valley: Although Dream Quest Images won an Oscar for its optical wizardry in ‘The Abyss,’ the company actually lost money on the project.

“I really truthfully wish there was no business aspect to it,” said Hoyt Yeatman, talking about Dream Quest Images, the Simi Valley motion picture special effects company he owns with two partners.

The boyish, 35-year-old special effects artist, wearing jeans and a loose-collared shirt, bubbles over with excitement when he talks about creating the illusion that models hanging on wires are really submarines in the deep, but not so much when the topic is balance sheets.

“That’s not my area,” he said.

Visual effects work is a business, however--and a tough one, where even artistic triumphs can entail financial losses. Take, for example, Dream Quest’s work on “The Abyss.”

Yeatman shared an Oscar this year with three others for visual effects in the film--which included Dream Quest’s creation of realistic underwater action scenes with computer-manipulated models.

But despite the boost it gave Dream Quest’s reputation, “The Abyss” must have caused Dream Quest’s accountants to fret. The project actually cost 5% to 8% more to complete than Dream Quest was paid, according to Keith Shartle, executive producer of feature film projects at the company.

The Simi Valley company--owned by Yeatman and partners Tom Hollister and Fred Iguchi--had already done the visual effects for movies from “Nightmare on Elm Street 4” and “Gremlins” to “Big Business” and “Fat Man and Little Boy.”

Winning the Oscar was a breakthrough for the company that helped put Dream Quest in the visual effects big league with companies such as George Lucas’ Industrial Light and Magic (ILM). “I consider our main competition to be Dream Quest,” said Scott Ross, ILM’s vice president and general manager.

That means Dream Quest is one of only a handful of companies that can hope to bid for work on giant special effects movies.

In fact, only two companies--ILM and Dream Quest--were considered to do the effects for “Total Recall,” said Buzz Feitshans, producer of the upcoming Arnold Schwarzenegger release, which is set on Mars. The film’s $50-million budget included a whopping $8 million for visual effects, according to Feitshans. Dream Quest’s Eric Brevig supervised the shooting and post-production optical work on all but 11 of the 120 different special effects shots for the movie. ILM did the opticals on the rest.

Recognition has swelled Dream Quest’s revenues by 50% a year for the last five years, according to Shartle. In 1989, Dream Quest’s sales--which come about 60% from feature films and 40% from television commercials--were in the range of $10 million to $20 million, Shartle said. The company as a whole is profitable, despite the loss on “The Abyss,” Yeatman said.

But the more challenging and complicated Dream Quest’s assignments become, the more difficult it can be to make a profit on them. The basic problem is that visual effects aren’t widgets--they can’t be stamped out the same way every time.

Take, for example, the script for “The Abyss,” which called for some underwater prospectors to encounter shimmering aliens deep in the ocean.

The aliens were built out of clear urethane with optical fibers woven through to make them luminescent. The puppets were also mechanized to make their wings beat “Peter Pan-like,” as Yeatman put it. After being filmed, the image of the aliens was to be essentially superimposed onto to footage of the human characters in the movie.

But Yeatman said the mechanical wings just didn’t look right flapping loosely in the air. On the other hand, director James Cameron discovered that the aliens’ wings beat angelically when the puppets were held underwater, bobbing “like a toilet plunger, up and down.”

Because special effects cameras shouldn’t be submerged in water, filming the aliens that way entailed building a clear plexiglass tank--the alien went inside and the camera stayed outside. And to create the impression that the alien was hovering in place--even though it was actually being plunged up and down to make its wings beat--the camera and alien had to be attached so they bobbed together.

Even then, the work wasn’t done. The plexiglass tank, it turned out, created an optical distortion that had to be corrected with a specially built lens.

“I would say that added several weeks of shooting,” Yeatman said. And every week of extra shooting increased Dream Quest’s losses. Even so, Yeatman said, the result was worth it.

Although their work is valued, special effects companies can’t just hand a tab to the producer and expect full payment. Many visual effects contracts pay only a fixed fee, and although the fee can be renegotiated if directors and producers make more demands, the fixed amount doesn’t always cover costs. Some contracts cover costs plus a percentage fee, but the profit in such deals obviously depends on what gets counted as a cost.

The fees are large. But Yeatman said the money “comes in in wheelbarrows but it goes right back out.”

Mostly it goes back into the hands of dozens of special effects workers--matte painters, film editors and others. Shartle estimated that at least 70% of fees for special effects go to labor. Make that about 80%, ILM’s Ross said.

“We’re talking over 100, 120 people working for a year,” Yeatman said, adding that the special effects crew can be bigger than the live action crew. “People are working a minimum of 10 to 14 hours per day--many times, six-day weeks--and often, towards the end, seven-day weeks.”

All that labor is necessary because of the nature of special effects work.

“You’re constantly being asked to do something you haven’t done before,” Shartle said. Then thinking some more, he added: “You’re usually being asked to do something no one’s done before.”

An example is the matter of filming action scenes involving several submarines and underwater crafts at once for “The Abyss.” Clearly, it wasn’t possible to build full-scale versions and film them at sea. The only option was to use models.

But director Cameron insisted that because the action was set thousands of feet under water--where no sunlight penetrates--the only light visible could be cast from one craft onto another.

Unfortunately, that ruled out the standard method of creating the illusion that ships are flying or floating past each other, which involves shooting models separately and adding their images, one by one, to the background. That wouldn’t work for “The Abyss” because Cameron’s lighting called for the models actually to be next to each other when filmed.

To control many models at once, Dream Quest built a gantry system--a sort of mechanized puppet-master--from which to hang them. To record the models’ motions so they could be repeated or just slightly changed, they devised special computer hardware that could keep track of more motions than previous hardware. The gantry alone, which Dream Quest may not have use for again, cost $120,00.

Yet even the gantry and the computer didn’t do the whole trick. That’s because the wires from which the models dangled were too thin to carry electricity to light the ships. And batteries placed in each model kept running down during extended filming.

So Yeatman and his crew installed radio receivers in the models, which allowed them to turn the lights off every time the camera shutter closed--effectively doubling the life of the batteries.

“It was an overwhelming film in general,” Yeatman said.

It was a long way to the Oscar from Yeatman’s start in visual effects, working on “Close Encounters of the Third Kind.”

While still at UCLA film school, Yeatman’s job on that Steven Spielberg film was small. “They needed somebody to baby-sit the camera,” Yeatman said. “I didn’t know what I was doing. I just sat there and made sure it didn’t burn down.”

But after working on “Star Trek--The Motion Picture,” Yeatman and five friends decided to start their own tiny special effects company in West Los Angeles. After investing $1,500 each, they converted the garage of a house into a studio and set up shop, leaping at any opportunity they could get, such as creating futuristic computer-screen characters for “Blade Runner” and making clay balls seem to whirl around like planets for “E.T.”

Shartle and Yeatman say they hope Dream Quest has come far enough since those days that it can afford to pick its challenges. “Now it’s not quite so hard-nosed a business,” Shartle said. “We might pass up a project because it’s something that we’ve already done.”