The parent company of VFX house Digital Domain plans to raise up to $US115 million to underpin a foray into live-action and animated feature film production, as well as expand its 3D and education business divisions.

The company, which was acquired by Digital Domain Media Group in October 2009, has won seven Academy Awards and counts credits on dozens of major effects-heavy blockbusters such as Titanic, The Curious Case of Benjamin Button, TRON: Legacy and Thor.

Revenue from its digital production business (which includes feature film and advertising VFX, digital advertising and marketing solutions, and 3D creation and conversion) rose 70 per cent to $101.9 million last year while Digital Domain Media Group’s feature film division posted a pro-forma operating profit of $US13.73 million.

However, the prospectus also warned that Digital Domain Media Group has posted losses for several years – it posted a pro-forma operating loss of $US45.2 million in 2010.

The document does not reveal executive compensation levels although the prospectus from an aborted attempt to float in 2007 showed former chief executive Scott Ross was paid an annualised salary of $US455,000 and a bonus of $US220,000. Including severance and other payments, he received $US1.35 million when he left the company in May 2006. (However, his compensation was inflated in that year because of a contractual arrangement, which significantly increased his payout due to the sale.) 

A key part of Digital Domain Media Group's current growth strategy is to capture an extra slice of profits generated through creating, producing and marketing live-action and animated feature films, as well as advertising.

The company said it is currently in various stages of development on multiple potential co-production projects, including an agreement with Oddlot Entertainment to co-produce an adaptation of classic sci-fi novel Ender’s Game. Gavin Hood (X-Men Origins: Wolverine) has written the screenplay and is attached to direct while Summit Entertainment will distribute the film in the US.

“Co-production opportunities allow us to invest in the film’s overall production budget on attractive terms, while playing a lead role in the production of digital content and integrated advertising campaigns,” the company said in its prospectus.

Digital Domain set up an animation film studio in 2009 and it has multiple family-oriented films in development “that we expect to release in partnership with major film studios”, it said.

It also plans to capitalise on rising demand for 3D content – the company counts films such as Transformers 3: Dark of the Moon and Alice in Wonderland among its 3D conversion credits – and grow its education business.

The Florida State University recently launched for-profit post-secondary educational institution Digital Domain Institute, which is expected to commence in the spring of 2012.

Meanwhile, Digital Domain this week announced that it had hired veteran visual effects supervisor Carey Villegas, who was nominated for an Oscar last year for visual effects on Alice in Wonderland.

Villegas spent 11 years at Sony Pictures Imageworks, where he was a visual effects supervisor on films such as Cast Away, Hancock and Bad Boys II.

The company has also bought a site license for 3D asset rendering software KATANA, which is owned by visual effects software developer The Foundry.


Source: Digital Domain Media Group prospectus, May 16, 2011
 

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1 Comment

  1. Why is Scott Ross’ salary etc made such a point of? It seems appropriate given the title, founding and achievements. VFX people are underpaid. Hooray for him. BTW I don’t personally know him.

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