Pixar Fights to Regain Software Dominance
Long before toys had a story and bugs got a life, Pixar Animation Studios Inc. was a software company.
It started in the 1970s with a team of programmers who wanted to transform mountains of computer instructions into images that would move across a screen. The result was a product called RenderMan, which became an essential tool for creating the dinosaurs of “Jurassic Park” and the murderous robots of “Terminator.”
Today, the heirs of those Pixar pioneers work in a tiny loft here overlooking the blue expanse of Elliott Bay -- nearly 800 miles north of headquarters in Emeryville, Calif., where hundreds of employees are busily creating several films, including an action-adventure comedy about a superhero family called “The Incredibles.”
To outsiders, it seems a strange form of exile. To the RenderMan team, it’s simply a way to focus on their jobs.
“It was difficult to run a software company while being situated in the middle of a movie studio,” said Dana Batali, director of the RenderMan product line.
In Emeryville, the RenderMan team spent 15 years dominating the market for software that converts computer code into digital images, a process known as rendering. Meanwhile, the studio side began cranking out hits such as “Toy Story,” “A Bug’s Life” and “Finding Nemo.”
As Pixar’s films went on to earn a collective $2.1 billion at box offices worldwide, company executives let the software business atrophy. But that box-office success prompted plenty of rivals to fill the void with their own versions of rendering software.
Now Pixar finds itself in the unlikely position of fighting to regain leadership of a field it practically invented.
Rendering accounts for a minute share of the $27.2 billion spent each year on hardware and software for computer animation, “but it’s a key piece,” said Robi Roncarelli, president of research firm Pixel Inc., which studies the digital animation industry.
“Everyone needs it,” Roncarelli said. “Everyone -- from movies to TV to games -- uses it.”
As the rendering market grows -- from $39 million in 2001 to $69 million by 2007 -- competition will increase as the tools appeal to an ever wider group of users, said Wanda Maloni, an analyst who follows the computer animation industry for M2 Research, a market research firm.
“People are starting to use more than just RenderMan,” Maloni said.
Pixar executives have acknowledged the problem. They hope the solution lies inside the company’s snug industrial loft in Seattle, where a dozen employees under Batali’s direction furiously type away at their computers. Buzz Lightyear and Flik the Ant peer down at the staff from the movie posters that cover the walls.
Batali, a lanky man with a quiet disposition, moved to the Puget Sound area eight years ago for personal reasons and continued to work on software for Pixar. From that distance, he observed a troubling pattern: The software group was constantly being pulled away by colleagues on the studio side who needed help overcoming their high-tech production hurdles. That was distracting, but at least it benefited their research and development efforts. To make matters worse, the RenderMan team had become the de facto tech support office for Pixar’s software customers, spending crucial time that could have been spent on new products.
Pixar decided the software group had to move, for its own good. With Batali as a beachhead, Seattle was the logical choice.
In the loft one recent afternoon, the low rumble of a commuter ferry muffled the sound of active keyboards and ringing phones. For now, the tiny staff must wear multiple hats.
As software engineer Julian Fong picked up his phone, he knew it could be an animator at Pixar asking for software design help, or a young computer scientist, eager to sell Fong on a new product. This caller, however, was a post-production executive looking for someone to tell him why his software wasn’t behaving. The 25-year-old stopped being an engineer and stepped into customer support, with no complaints.
‘Because It’s Pixar’
“Regardless of what we do, we’re here because it’s Pixar,” Fong said. “How can you not want to be part of a company with such a deep history in this field?”
Pixar’s roots go back to the 1970s, when George Lucas recruited a handful of engineering and software experts from universities around the country and challenged them to build a machine that could print digital effects onto film. That would allow artists to create more precise special effects than they could achieve with traditional methods of manipulating chemicals on frames of celluloid.
The scientists developed a computer language that translated lines of code into an image on a monitor. Those images could be strung together into clips of animation.
Their efforts made it to the big screen in 1982. Artists at Lucas’ effects house Industrial Light & Magic used rendering techniques in “Star Trek II: The Wrath of Khan” to blast a torpedo carrying Spock’s body into a dead planet, prompting barren stone to bloom with greenery.
In 1986, the Lucas group joined forces with Steve Jobs, founder and chief executive of Apple Computer Inc. For $10 million, Jobs got a controlling stake in the venture and rights to some of the early rendering technology the group produced.
The fledgling company focused on two fronts. Its Pixar Image Computer compiled vast amounts of data to form 3-D images and cost more than $120,000, plus at least $60,000 for the software and accompanying accessories such as tape drives.
And then there was RenderMan. Pixar’s computer scientists went to work expanding the capabilities of their initial technology and launched the RenderMan line.
Pixar produced several short films to test its technology, including the 1988 Academy Award winner “Tin Toy.” To make a name for itself, along with some revenue, the company also did TV commercials.
For the first decade, most of Pixar’s money came from software. During the five years before the company went public in 1996, it pulled in nearly $20 million from software sales, compared with $12.8 million from animation services.
In addition to selling RenderMan, the company wrote custom programs for ILM and other visual effects firms. It also licensed some of its patents to Microsoft Corp. and hardware manufacturer Silicon Graphics Inc. for use in their own 3-D graphics efforts.
But RenderMan was the key product in Pixar’s software portfolio. All of the big special effects companies relied on it -- ILM used it on everything from the “Star Wars” series to “The Mask” -- and most of the small ones did too.
Then “Toy Story” changed everything. The 1995 film, which grossed $362 million worldwide, transformed the little-known tech firm into a Hollywood player.
With movies on Pixar’s mind, commercializing its technology took a back seat.
Seeing an opportunity, a new breed of RenderMan rivals stepped up. One of the strongest is Mental Ray, a product from a small German team of math and geometry specialists, Mental Images. The Berlin-based firm had spent nearly two decades making software for industrial companies such as DaimlerChrysler’s Mercedes-Benz unit, which uses rendering software to make photorealistic models of prototype vehicles.
What sets Mental Ray apart from RenderMan is its focus on light. The software treats light not as a single beam but as an active stream of particles that bounce several times off ceilings, walls and objects to create shadows and reflections. That helps give highly reflective surfaces, such as the glass skyscrapers in “The Matrix Reloaded,” more of a photorealistic look.
Dozens of effects houses have embraced Mental Ray, even Industrial Light & Magic. Although ILM relies primarily on RenderMan, it uses Mental Ray on complicated projects involving water and sunlight, such as the film “Pearl Harbor,” said Cliff Plumer, ILM’s chief technology officer.
Some effects firms have switched to Mental Ray altogether. Officials at ESC Entertainment Co., the Alameda-based effects shop behind the “Matrix” movies, said they went with Mental Ray for both creative and financial reasons.
Cheaper Alternatives
Others have opted for even smaller, and often cheaper, alternatives. When San Francisco-based visual effects firm Orphanage landed the job of creating virtual monsters for the movie “Jeepers Creepers 2,” executives said they contacted Pixar about upgrading the rendering software on nearly 200 of their computers. Pixar quoted them a price of about $12,000 per computer -- which would have worked out to $2.4 million.
So the Orphanage executives looked elsewhere and discovered SiTex Graphics, a one-man shop run by software hobbyist Scott Iverson in Denton, Texas. Iverson had built a rendering program called Air that was similar to, and compatible with, RenderMan. The cost was only $450 a computer, or $90,000 altogether.
“RenderMan is an amazing technology, but it’s incredibly expensive,” said Stu Maschwitz, Orphanage’s chief technology officer. “There was no way we could afford to use it.”
Even former employees are competing with Pixar.
Larry Gritz, the former head of Pixar’s rendering research unit, and three of his colleagues left the company in 2000 to start ExLuna Inc. in Berkeley. Their rendering program, called Entropy, costs less than half as much as RenderMan.
But Pixar claimed ExLuna’s software infringed some of its RenderMan patents, including one for smoothing out jagged lines on a digitized image. Pixar sued the start-up in March 2002, and the companies settled the case last summer for terms that weren’t disclosed. By then, ExLuna had been purchased by Nvidia Corp., maker of high-end graphics chips. Details of the acquisition weren’t disclosed.
At the Siggraph computer graphics conference in San Diego earlier this month, there was less buzz about the latest advances in RenderMan than about Pixar’s rivals, big and small. At a booth featuring the Venice-based start-up Splutterfish, staffers fielded nonstop questions about their rendering program called Brazil R/S. Throughout the week, admirers crowded around the booth to catch a demonstration of the product, whispering about the “hot” new company.
In Seattle, Batali insists Pixar is up for the challenge. The company has lowered the price for RenderMan licenses by at least 35% and, in response to customer requests, is reconfiguring software packages to offer more choices. Pixar also is exploring ways to expand its customer base for RenderMan beyond Hollywood into the video game and industrial design markets.
Batali is hiring more software engineers, and the whole team is set to move into a larger office this fall.
“Yes, there’s competition,” he said. “But we understand what artists need and want, because we are an artists’ company. We make movies. This is what we do.”
