The Next Billion Dollar Disruption. You Read About It Here First

The Next Billion Dollar Disruption. You Read About It Here First

If there’s anything true about high tech, it’s that the big fortunes are made when a new technology disrupts an existing industry. The money to be made is greatest when 1) the industry being disrupted is bureaucratic and inefficient, and 2) the new technology transcends, rather than merely automates, the previous processes.

Early in my career, I lived through and participated in, one of the biggest disruptions of all time: desktop publishing. Within ten years, photo-offset printing setups that cost millions of dollars each were replaced by PCs and laser printers. Entire job categories and companies disappeared. Millions lost their jobs but entrepreneurs made untold billions of dollars.

While I built my career riding that wave, I was too young and inexperienced to start my own company until the revolution was over. Now, as I see another, even more amazing technology about to massively disrupt another hidebound, inbred industry, I’m past the point where I want to start my own company. Too much damn work. (I’m a lazy S.O.B., truth be known.)

So I’m going to share with all you readers what I absolutely know is about to happen. I say “absolutely” because entirely by accident I’m uniquely positioned to see the disruption coming and uniquely qualified to explain how it’s going to happen. And, strangely perhaps, it has nothing whatsoever to do most of the stuff I write about in this column.

So let’s get started but, bear with me and be patient, because I’m going to explain this in my own way and without trying to package the concept with a nice, neat bow. Put on your thinking cap.

Rick and Morty

About two weeks ago, I attended a live interview with Bryan Newton, one of the animation directors of the hit cartoon series Rick and Morty. He’s been involved with the project since its inception and has become a bit of a legend among animators for pioneering some of the crazed look-and-feel of that style of animation.

Why was I at that interview? Well, it was presented by AniMAtic Boston, a group of student and professional animators, mostly graduates of local colleges, most of whom work in the fields of commercial and corporate animation but many of which are true artists in this field.

I belong to that group and support it because, in addition to all the business writing and experiences I’ve had over the years (and which I chronicle in this column), I’ve also been a hobbyist in the field of computer animation since the mid 1980s. I’ve animated using several programs; I also made a feature-length film that’s pretty well-known in some circles. (Let’s just say it gave me permanent nerd cred.)

From time to time, I’ve played around with the idea of changing careers and becoming a professional animator, probably in the field of cut-scene animation for computer games, which is a field I know pretty well. Anyway, I was interested in Newton’s perspectives about working in a big studio.

Well, I don’t know whether it was because he had had a long day and was tired, but he made it very clear that he was no fan of the studio system. As he ragged on all the inefficiencies and politics, I realized that I’d heard all this before. It seems like EVERY creative person in Hollywood hates the studios–especially the executives with their “notes.”

Anyway, it turns out that even shows like Rick and Morty–which involves relatively simple animation–must go through an insanely Byzantine process to move from conception to writing to animation to completion. Over a hundred people are involved and from what I can see a great deal of them aren’t adding much or any value.

And, don’t kid yourself, animated entertainment–TV, movies and Internet–is a multi-billion-dollar business. More important, it’s a business that’s weighed down by bureaucratic overhead and entrenched power-brokers who essentially drag down the creative process.

Revolution in Real-Time

At the end of the interview with Newton, he speculated about what animation technology might look like in the future. He said that writers could create characters by morphing standard characters, use libraries of animations to make them move, use motion capture to customize and add dialog. And then release it directly to the Internet.

Essentially he described an environment where creatives like himself would not require the infrastructure, investment, and meddlesome overhead of a studio to develop and release an entertainment product. As I heard him describe this, I considered pointing out that all of this was not just possible but day-to-day reality, at least in the real of 3D animation. 

The technology is called “Real-Time Animation” and it’s been flying under the radar for about a decade. So much under the radar that although I’ve brought up the subject with several people at AniMAtic Boston, I have yet to run into anyone who has even heard of the software-;even though they’re recent graduates of top animation college programs.

The reason I know about Real-Time is that I’ve been working with Real-Time animation software since 2004, probably because I have no formal training in animation. I suspect that most “real” animators have tended to ignore it because up until about two years ago real-time animations have been fairly crude.

However, as CPUs and GPUs (graphics cards) have gotten more powerful in order to handle ultra-realistic games, it’s become possible to create reasonably high-quality 3D animation using real-time tools. These tools are to traditional animation what desktop publishing was to typesetting and paste-up. You create animation on a WYSIWYG (What You See Is What You Get) environment.

A few (very few) traditional, high-end animation shops are getting wise to the incredible power and productivity of developing animation in Real-Time. One of these is UK-based Axis Animation, which created the computer graphics world for the excellent Netflix series Kiss Me First, and which does specialty work for several big name organizations.

I recently had a long conversation with Michael Zaman, who is the supervisor of Real-Time Computer Graphics at Axis. He noted that while in the past they used Real-Time primarily for prototyping, they’re now using it for actual project because the technology can now create quality that rivals the more laborious CG processes of the past.

Zaman had the same “knowing grin” that I’ve come to associate with the handful of people who “get” what’s coming; I have a feeling that he and Axis will end up being major players in the disruption that’s just around the corner. I’m going to save the best part of our conversation for the end of this post, so you’ll want to read the entire thing.

The Underlying Tech

There are four reasons that Real-Time animation has vastly increased in quality. (I’ll be giving some examples soon; bear with me.) 

  1. The first trend is the need to develop video games quickly; real-time animation more naturally emulates the environment in which computer games will be played.
  2. The second trend is the desire among consumers for video games that are more realistic and cinematic; to satisfy his desire, companies like NVidia have developed specialized hardware to process complex 3D graphics.
  3. The third trend is the commoditiziation of high-end technologies, like motion capture (mocap). Ten years ago, a full-body/facial mocap system cost a million dollars; a functionally identical system can be had today for $6,000.
  4. The fourth and final trend is a lively market in pre-created 3D models, including sets, props, and characters, along with the ability to very easily modify those models to suit individual projects.

The result is very much like the “next generation” environment that Bryan Newton described on stage–not just for simple 2D animation like Rick and Morty–but full-on 3D animation similar to major Disney releases.

More important, Real-Time technology makes it possible to do all of this without the overhead of the studio system; in fact, developing a short animated film is considerably less effort than writing a novel.

How do I know this? Because I’ve actually written a novel and have also been using the best (IMHO) Real-Time animation tool–iClone from Reallusion–to do exactly that over the past two years. Here are excerpts from my last three major projects, showing the incredibly rapid development of this technology (very short video):

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I’m not saying any of the above is great art, although The Blood Pope did get selected for several film festivals and won two awards and I have hopes that Salvage may be included in a fairly major Sci-Fi film festival. What’s important for the purposes of this post is that all three projects were created by a single person (me) who has NO formal training in animation and with a very limited budget.

The total cost for this kind of Real-Time animation comes out to less than $500 per minute, maximum. For perspective, a typical Disney feature, done with traditional animation tools in a studio setting, costs upwards of $50,000 per second which calculates out to $3,000,000 per minute. 

I’d say that a cost reduction from $3,000,000 to $500 definitely qualifies as disruptive technology, eh? And that’s just for creating animated cartoons which, although a multi-billion dollar business, is only the tiniest tip of the proverbial iceberg.

What’s Next Is Insane

Real-time animation technology is developing so quickly that even people inside the industry are struggling to catch their breath.  However, what all the insiders see very clearly is that the studio technology that Disney uses to insert deceased actors (like Carrie Fisher) into the Star Wars movies will rapidly become available to individuals.

We’re already seeing this kind of thing with the so-called “deep fake” technology where AI pastes a celebrity’s head onto a video with another actor’s body on it. But the real power happens when you combine mocap with ultra-realistic real-time rendering.

And that’s happening already. Real-Time is currently experiencing is a quantum leap in quality from a technology called iRay, which is being built into the newest graphics cards. Here’s a very short video showing how iRay radically increases realism inside Reallusion’s Character Creator tool:

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To understand where this is all going, here’s a demonstration of a high-end system (it uses the Unreal gaming engine) being used to create ultra-realistic animation in Real-Time–so realistic that it’s hard to tell that it’s not a real person:

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While the setup used above is more expensive than most independent film-makers are likely to be able to afford, it’s still geometrically less expensive–and insanely faster–than the systems used inside the studios.

The point here is that the technology shown in the video above will soon drop in price so that it will be widely available to anybody who can spend, say, $5,000 or $10,000. And that’s what’s going to completely change not just animation but the entire filmmaking industry.

Here’s what’s going to happen, based on my conversations with insiders like Michael Zaman from Axis Animation. Within five to ten years, it will be possible for a single person or a small group of people to make entire movies in virtual worlds, without ANY of the overhead of a traditional studio.

And I’m not just talking about animated cartoons. I’m talking about actual feature films with massive special effects. People like you and me will be able to create, with very little investment, content that resembles high-end cinematic work that today costs hundreds of millions of dollars.

So here’s what we’ve got: rapidly developing technology that will upend a massively inefficient and bureaucracy bloated studio system. This revolution will be more disruptive than Amazon was to the book business, or than Netflix was to the TV business. We are about to experience the kind of massive market disruption that happens only once or twice in anybody’s lifetime.

And almost nobody sees it coming. But now YOU do, because you read about it here first. The question is: are you going to start a business that surfs the tsunami? Or are you going to sit back and watch it happen?

Your move.

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