Prem Akkaraju is leading the charge to transform Peter Jackson and Fran Walsh’s Weta Digital visual effects firm into a full-fledged production company delivering original content. Akkaraju explains how the New Zealand-based Weta businesses have evolved during the past two years and where they see opportunity for the company in the increasingly crowded entertainment marketplace.
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Speaker 1 (00:00):
M Welcome to Strictly Business Varieties weekly podcast featuring conversations
with industry leaders about the business of media and entertainment.
I'm Cynthia Littleton, co editor in chief of Variety Today.
(00:20):
My guest is Praim Acaraju, CEO of Wetta Effex. Wetta
is the extremely well respected visual effects firm founded twenty
five years ago in New Zealand by filmmakers Peter Jackson
and fran Walsh. Acaraju is a veteran digital entrepreneur who
joined Wedda in early He's helped transform the company through
the sale of some of its software and its tools
(00:42):
to San Francisco based distributor Unity for one point six
billion dollars last November. Now, the rest of the business,
known as Wedda Effex, is hitting the gas on developing
original content from filmmakers other than Jackson has Acaraju says
the company intends to capitalize on the strong reputation it
has among directors. Acaraju offers insights into the global content
(01:05):
boom that he sees from what as perspective of receiving
a tidal wave of bids every month for visual effects work.
Our conversation also takes a turn back a few years
to the time when Acaraju was working with his partner
Sean Parker on the screening room home theater concept. Acaraju
explains how the frustration of not being able to get
(01:26):
that off the ground helped bring focus to his next
business efforts. That's all coming up after the break. When
you need to know when you want to hear what's trending,
what's buzzing, from audiobook recommendations to leading podcasts, album reviews,
to news variety. As you plugged in What to Hear
(01:47):
powered by Audible, your home for all things audio, Visit
Variety dot com, slash what to Hear Frame. Acaraju, CEO
of whata f X, thank you so much for joining
us today. Thank you, thanks for having me grime. Let's
talk about uh. You joined the company which is very
well known, very established in Hollywood as a top, top
(02:10):
cutting edge source of visual effects, digital graphics, UM, computer
generated imagery, all of the things that have moved filmmaking
so far in the last decade or so. UM. We
know it to be established as a very you know,
state of the art company, but it's undergone a lot
of changes in the last couple of years since you
arrived in early as CEO. Tell us about the transformation
(02:34):
that's happened at WETTA, and and tell us why it
was important to take the business in the directions that
you have over the last two years. Oh, thank you
so much. Yeah. So, we have had a tremendous amount
of change, UM and UH in the last two years,
and I'm really proud of those changes in the success
(02:55):
we had. The thesis coming in when I came in
a CEO was really too broad in UM that influence
and that that you just mentioned, uh so so perfectly,
which was what is the household name in the households
that make movies? UM, and it's and we we felt
(03:16):
like we had a lot more to offer to the world.
And there were in two things, UM. On top of
the growing the existing V effects and animation graphics business
as you mentioned, so I knew we had more to
offer the world and V effects and animation number two
was UM really UH will dive in deeper for this
(03:37):
is a specific strategic advantage of coming in and doing
original original content. Was the second area that was of
great interest. In the third UH was really software and
technology and and and I think that one that's the
one that's the big headline right now, which is what
(03:58):
we were able to achieve even a very short period
of time, um with with our technology uh software stack,
which we just did that deal with Unity. But those
are the three areas that we really saw um a
great deal um of of opportunity in and and uh
and that's what we've been up to. Let me ask
(04:20):
you just to step back a little bit, so you
when you came in, you had you looked at obviously
the company had a couple of different lanes of activity,
and you reference that. Just towards the end of last year,
the end of one you did a big transaction to
take a part of a lot of the software, some
of that proprietary software that Wetta had and sold it
(04:40):
to a company called Unity, which is I believe is
actually based in the u s. It's the San Francisco
based f X tech tech company that couldn't wait to
get its hand on all the Wetta technology. But talk
us through, like when you got to the company, how
did you figure how did you determine that a transac
action with a company like Unity for this section of
(05:03):
what we was up to made sense. I'd love to
talk a little bit about the business rationale for how
you decided to reorganize, what made sense in a sale,
and what made sense for you to stay and build
build the company, up the company. Great question. So, UM,
when we first um started UM in our you know,
(05:27):
sort of learning about the company, Shawn and I so
a longtime business partner with Shohn Parker who's also the
vice chairman of the company, and made investment the company.
We developed a very close relationship with Peter Jackson and
fran Walsh over years, and we started learning a lot
about the technology that they've built, and it was just extraordinary. UM.
We we both come from obviously Sean in an enormous
(05:49):
way from technology background, and we just saw that the
company had created so many tools that could empower so
many artists around the world. And we also knew with
the proliferation of so many streaming services. UM just think
about it, at the time, it was really only Netflix
(06:09):
that was the dominant player. Then we knew these other
ones were coming online, whether that be Amazon and then
Disney Plus and all these others, is that that was
going to uh greatly outpaced the supply demand curve, and
we knew that we had an opportunity to help the
supply side of that by packaging our tools um and
(06:34):
and taking those to markets. So we were very, very
good at shipping movies at whether the digital twenty five
year history a bunch of Academy of nominations and awards
and things and extraordinary work. And I started as a
super fan, uh from the beginning before I joined the company.
I still remained a super fan. UH. And I think
(06:54):
that's where my my love and my passion is rooted
in the amazing work that what it does and what
Peter in frant of built over a twenty five year period.
While we're the greatest company or one of the best
companies of ship movies, we're not the greatest company to
ship software. So in and they're in lie the need
for a partner, and we knew we can because that's
(07:17):
a wholly different uh, you know skill, and that's really
a licensing business, it really is. You're in the right
a content creative, like very creative created these tools to
create the art and in service of the director. And
that's also one of the reasons I feel like we
have such great advantage of the originals, which we'll talk about,
but we knew from the get go we had something
(07:37):
very special, but we wanted a partner to bring it
to the world because it's like you said, it's licensing,
it's support, it's documentation, it's it's it's a whole different
animal UM to ship software and support that versus ship
movies UH and support that. So we we started on
our own to do it on our own, quite frankly,
(07:58):
and we had tremendous amount of investor interest, and we
recruited a big technology team and recruited a new ct
O into the company UM. But we really figured out
quite quickly that the fastest way to market is with
an established partner. Now you are Unity Software. They have
one of the top game engines UM in the business.
(08:19):
The other that many people know is of course Unreal UM.
But the we were very familiar with unities platform and
their underlying technology. We're great admireers of it UM and
they essentially provide tools to empower gamemakers to make games,
and they were the perfect partner to then partner with
(08:42):
us to take our filmmaking tools out there to empower
new filmmakers in television, producers in the same line. So
now with that big transaction and that big you know,
evolution for the company, Now that that is that is
being completed, where is your focus now? So really is
the other two then? So it's growing the VFX business.
(09:04):
We've grown about since I've joined as CEO, which is
terrific growth rate. So we um, we're can I ask
what's driving that? Would you say? Is it all the
television shows that are being produced seemingly every hour? Kind
of exactly, It's like they can create. It's it's unbelievable, right,
(09:25):
Like every night I turn on Netflix or so and
there's like a new Yeah, exactly, it's it's it's exactly
the reason that when we turn on our TVs at night, UM,
new series, new film, UM, non trivial either like big ones,
you know, really stars, yeah, big stars, big shows. And
(09:47):
so we we have been oh yeah, we're way up it.
We we have and I'm sure we're just like other
VFX companies. Our bids outstanding, you know, is it is
kind of a good metric of the business, right like
how many bids were respond to studios call us up
and we are five times the amount of bids that
saying that we were, you know, four or four years ago, UM,
(10:10):
and we've grown the company nearly twice is twice. The
amount of the team has grown almost two x UM
since since I've since I've joined, growing revenue just just
like what you The reason that you said is just
an amazing amount of content production UM. And there's no
(10:33):
big release dates and things like you know on the
on the online you know, and and the streamer community
that they just released them right so and so the
so there's two things that are happening. We have way
more bids and the bids the turnaround times are shrinking.
They wanted super past yeah, exactly. So so that is
(10:57):
a major you can look at that as a very
good man trick of change, right beyond just the obvious
of grabbing our remote controls. UM is. Yeah, there's a
lot more bids and the turnaround times a lot shorter
than ever before. And so that has been great to see.
We're going to be expanding internationally. We already came to
l a UM that was really for original content as
(11:18):
well as the software as a service because as you
rightly mentioned, you know, UM, California is where Unity is based,
but also where all major tech companies that we would
have wanted to partner with. UM and the evaluated are
really mostly on this uh side of the side of
the coast and in the world, and so UM that
(11:39):
was why we were here. We're also going to be
expanding in New Canada and the UK and Australia UM
UH this year. I think all three of those, UM,
Australia and Canada first and we UH so we're we're
growing like crazy. So my focus is on that. My
second focus is of course on Originals as well. I
(11:59):
felt we have a particular advantage in that business because
of a relationship with storytellers, our relationship with filmmakers. They
want to work with what A because they know that
we're dedicated to the director and to the story more
than UM. If a business person, like I'm a business person,
so if I started what it would have looked Thank
god I didn't, it would have looked totally different, right UM.
(12:23):
But thank god we were founded by a visionary filmmaker
UM and visionary producer writer Fran Walsh, because that what
made it that that was that that etched into the
DNA of the company from day one, that we are
in the service of the director, of the storyteller. We're
(12:43):
in the service of the creative and at any cost.
So if they want to have visuals, as Peter has
proven over the years, Lord, yes, and by the way,
all the directors we worked with, I mean, uh, you
know we are doing the Avatar sequels and others, and
so yes, at any cost. That's it really is about that.
(13:04):
And if you can, if you look at the movies
that we've been involved with, it's not overdone. You know,
you're never pulled out of the story because of some
overwhelming visual effect or you know event. It's always really
and that's why I keep saying it's in service of
it is that, Um, it's never underdone or overdone. I
mean the best visual effects ever is non obvious visual effects,
(13:27):
meaning that you're in, you just it really did happen.
People can fly, yeah, direct and also or you see
these dramatic things. Yea, worlds can explode if people can fly,
like you know, you're just in that. You suspended all
disbelief because you just believe in what you're seeing. And
that's that's the home run. And um, I think we
(13:48):
deliver that, you know, consistently, and I think that's why
it's amazing filmmakers that we've had the absolute pleasure worrying with.
And that's that was our leg up UM and getting
too originals UM. I can't name the two directors we're
working with right now because we haven't announced these projects,
but they were too long time clients of what UM
(14:11):
and I went to them and I said, hey, we're
doing originals and one of them said, the best compliment
I've ever heard. And I said, you know, I want
you to make original with us and and and really
only with us. And then the filmmaker said, but you
only want movies only with what honest? Yeah, and uh
filmmaker said, well that's easy. No one else knows how
to make them, so that's like, that's a huge compliment.
(14:33):
Obviously that person has been working with us for quite
some time, but it was that trust I think over
built over twenty five years UM being founded like by
a director UM and never losing that dedication and spirit
I think is what earned us UM that reputation UM
(14:56):
and and trust in the in the creative community, and
that something I can say that is a huge advantage
for us UM in in in a very crowded space
of originals were also very very much um like like Peter,
very selective, and so we're not going after a huge
(15:17):
number of originals like I'm gonna see like a hundred
you know, on the slate and things like that. It's
gonna be very selective a handful of projects that we
do really really really well versus fifty projects that you
know we're in some kind of you know, volume game
or something like that. We're very much dedicated to quality
(15:38):
above all else. And if that means we make one movie,
then that means we make one movie. Don't go anywhere.
We'll be right back with more from prame Akaraju, CEO
of what a ex When you need to know, when
you want to hear, what's trending, what's buzzing, from audiobook
recommendations to leading podcasts, album reviews, to news Variety. As
(15:59):
you plugged in What to Hear powered by Audible, your
home for all things audio, visit Variety dot com, slash
what to Hear, and we're back with more from what
a FX CEO prame Akarashu. What a no doubt has
the incredible pedigree, but it is still such a crowded
field and it's not you know it's to to do
(16:21):
really high end content is not inexpensive. You have such
a great FX business going what what is the what
is the real driver of going into original content? Because
it's also like it's a hard marketplace for independent companies.
Do you want to go into own the sprockets? Do
you think it's a licensing game? Like how how are
(16:43):
you going to really make that work at a larger
volume than certainly what it has been associated with Peter
Jackson's project, Peter and France parts over the years. But
to bring in, as you say, like new people and
have holy original development, that's a really crowded field. Well, um,
it's in public announced, which is great that Peter and
Fran are going developing content for it. So that's a
(17:05):
nice start. Yeah, that one works, um and uh and
the other two are are absolutely brilliant. And we're just fans.
We just start with being fans, like you know, and
I think that that always would be a great guiding light.
But again we know it's crowded. Um, it's not so
(17:27):
crowded at the top, like when you're talking about great
content and great movies, right and um, and I think
that that's what gravitates towards what We are very very busy,
that's true, But we're not the biggest shot by any means.
And we are not the first shop that people call
when it comes to burning and turning and kind of
creating really quickly and like all that kind of stuff.
(17:48):
People call us for the big complicant stuff, like people
call us for the big third acts, right, and for
the big movies that are impossible and the world has
to blow up exactly and then reassembled by itself and
so like it's it's exactly right. So so we're not
by any means. You know, there there are many other
vidual effects companies out there much larger than us that
(18:09):
that are in that volume game. So I don't think
that we're not in a hurry um and and and again,
I think quality always has a place, no matter how
crowded it is. And so if you have quality stories
with quality filmmakers in a in a quality script, then
I think that you're going to always find that place
(18:31):
and it's going to be break out of the path.
As far as a business concern, which I think was
also part of your question, to be honest with you,
the whole film industry has changed since we wanted to
go into originals, right like, because remember it's I've been
there for two years, but then it has been about
two or three years in the planning, you know, since then.
And you know, there wasn't just the buy out or
(18:54):
the margin type of business. You know, there was theatrical
uh in a it's more real best way. Obviously they
were back end. You know, there was the film industry itself,
the head coode financing opportunities which largely don't exist now
for the most part. And so it is it is
interesting where it's going to go because I don't think
anyone really knows because it's when you again, when you're
(19:17):
on you're doing a thing for Disney Plus or Peacock
or or Netflix and stuff, they're buying it out. You know.
There it's theirs. And so that's what I'm saying, Like,
it's hard to it's hard to build that library and
that kind of value where you can take it around
the world. Because the platforms now reach around the world.
They reach around the world, they're not really economically a
(19:38):
subscription model is not a transactional model, so it's very
hard to audit to get paid back in because why
did someone subscribe to Netflix. Was it for Stranger Things?
Or was it for you know, you know, you an
obscure French film that you know exactly exactly and so
and so you know that's it. That's hard to audit,
(20:01):
right and so, um so, given given their all around
the world, given the fact that there are subscription models,
I think that it's it's largely changing the business to
where um, you know, people have to really kind of adjust,
um to to to this new way of But now
(20:21):
there's great benefits to that too. There's way more content
being created, there's way more risk being taken. There's you know,
it doesn't have to be just as sort of like
a superhero or a comic book, you know based movie
or film. It's it's so many different types of movies
in series make. I mean, for as a as a
fan of film and TV, there's like more choice than
ever in that way. So there are there are great benefits.
(20:44):
And for a creator, you get the chance to make
squid games, you know, or or things like that. And
so where maybe you weren't you know, didn't have the
opportunity to make that and have it being seen all
around the world. So um, I think of it. To
finally answer your question that you were asking, I don't
look at our originals as any different than the other
(21:08):
films that we're doing as a as a vendor. It
would be it just would be happen to be that
we would own or develop that i P and kind
of be a little bit of a control our own destiny,
if you will, like, because then we can actually own
this i P development. It will be pitched to those
normal players. Right We don't plan on becoming on our
own studio or distributing our own content in that way.
(21:31):
I mean, that's certainly not on the docket right now.
But do you plan to fund it? Do you plan
to finance your own content? We definitely will finance the
development of the content. I would actually be happily happily
co financed the content. But I've met with many of
the studios and they are not interested at this point.
And that's what that that would be that tough deal
(21:51):
making environment I was referring to. Yeah, stuff now they're like, hey,
will you know, and so we love it, we'll take all.
We'll give you a little piece exactly exactly. And that's
part of the new world that I think that we
are living in and again and as has its um as,
its pluses and minuses. UM, but it's um. It is
(22:12):
where we are. And I do think that consumers, you know,
I want it right and I think that that's the
that's the high road that the streaming companies could take,
is that it clearly the consumers wanted, there's demand for this.
You've mentioned movies number of times. Are you looking at
movies and television or are you focused on the film business?
(22:33):
So we are. We are focused on film. We're also
focused on movies right now, but also series. But the
three things that we're looking at um that are sort
of currently in development are all feature films. I know
you mentioned that your partner in this venture is one
of your partners is Sean Parker. Yes, UM, who and
(22:53):
I know if I've got the right Sean Parker. Sean
was involved some years ago now in a venture in
Hollywood called The Screening Him, which was probably a little
ahead of its time, UM, in terms of an ability
to give people the um the you know, the ability
to watch a feature film in your home, to be
able to watch it on you know, premier weekend or
shortly thereafter it was. It was a bold venture. It
(23:17):
came it came up very quickly and it and it
did not take root in Hollywood. Can I ask you
did you learn from that experience where you I know
that if I understand right, you were part of you
were involved. Yeah, I was a founder. I was a
founder and CEO of that company, and Sean was a
founder and chairman. Um. And we had tremendous support from Hollywood.
It was a tremendous learning experience. Um. It's funny many
(23:41):
of the CEOs right at the beginning of the pandemic,
many of the CEOs of the studios I spoke to
after like kind of like April May, they all one
way or the other said they all wish they did
the deal then because certainly, and I agreed with them.
Um and uh, yeah, that was a that is the
(24:02):
same Sean Parker. Um. And although there was a weather
man named Shawn Parker and which is funny, but it's
but that's uh so I'm I'm I'm partnered with the
one who's not a weather man and uh and so
it was a tremendous learning experience for me for sure. Um.
(24:26):
We had so many false starts at screening room by
the way, UM made our way through the exhibitors, made
our way through the studios, and what we all, what
we ultimately wanted to do was just provide more opportunity
and more choice for the consumer, you know, and if
you pay the premium, you can watch it at all,
(24:46):
if you went to the theater and watched it. We
all love theater. And in fact, the irony of it
all is that we did sign term sheets with many exhibitors,
including many, you know, major exhibitors around the world, and
at one point we had one out of four screens
in the US and one out of ten worldwide signed
up with us because we did the thing that nobody
(25:08):
really would have thought of doing, uh and no one
certainly would have given us credit for doing it because
we're more disruptors looking is that we we made sure
the exhibitor were financially participating in and at home viewing.
So all we did was it was that model was
much like Uber how Uber makes any car into a
(25:29):
taxi or Airbnb makes any home into a hotel room.
We used our software hardware to turn any living room
into an a m C, or any living room into
a regal or AIM into it and so and shared
the economics just the same as if it was you know,
and allowed our hardware software to UM to for for
(25:49):
for the exhibitor for a m C and Regal and
others to expand without any capital expendature. And then we said, look,
there's not too many theaters in the world. We had
the countrarian view. We said, there's not enough. They're just
not in the right place, you know, because and let's
let's use this software to light up like an uber
or like a like the Airbnb example. Let's use our
(26:10):
software hardware to to create these home theaters. And if
we kept the economics the same which we were doing.
We had a lot of interest from from from studios,
but at the end of the day, one thing or
another would have would would would spook them, and unfortunately
we were victims of media leak that did not come
from us UM and UM and unfortunately that that made
(26:35):
it a public conversation, which made it a lot harder
to get to get the deals done. But little did
we know that a looming global pandemic was right around
the corner. Um that basically then greatly accelerated it to
the point to where the studios is did it on
the run, right, I recall it seemed like a cool idea,
(26:55):
but where anybody's interests might be threatened. Of course, Hackle
get raised and and you mentioned the media leak, which
I do believe was a variety. Yeah it was. It
was real, Uh doing our jobs. Yeah, he's a I
mean I begged him not to do it. He said, listen,
if I don't do what someone else is going to,
which is true. I get it. I get it. I
(27:17):
still like on the f X side of your business
coming out of the pandemic, both the pandemic conditions and
the incredible leaps forward that we've been seeing with virtual
reality a r AI, all the acronyms of just there's
so much innovation going on at such a high rate.
Are you seeing Are you seeing like big productivity and
(27:41):
technology gains in the FX world at this time? Oh?
Absolutely absolutely. I mean probably the biggest thing that are
affecting UM effects right now is going to be artificial
intelligence and machine learning AI and m L and automating
a lot of the things. You'll never take the genius
out of the creative, You'll never take that artist touch
(28:05):
out of the equation, but you can get that artist
to that point a lot faster with you know, with
with you know, sort of machine learning and artificial intelligence.
So I think that's a very that's an accelerator, that's
a disruptor, and that's going to be very, very UM
important over the next three to five years. In VFX
(28:27):
in a R you mentioned a R and v R two.
Those are also disruptive, even positive, you know, fashion for filmmaking.
For example, UM, we are using Microsoft UM hollow lens,
which are the their their gargles UM to to do
remote location scouting. You know, you can actually put those
(28:50):
on and look around. It saves so much time and
energy and environmental impact and everything you can imagine, UH
is speeding up the process. We're also using a R
on set, so we're to help filmmakers visualize a set
or a scene. We can use iPads to actually have
an A R experience through there so they can actually
(29:11):
see what UM the virtual environment they're they're looking to create.
So you see an a R on set, you see
VR UM in location scouting anywhere in the world. Using
those UM and certainly VFX in particular UM a whole
new general it's gonna be generation three dot oh no,
(29:32):
I think it's gonna the whole pipeline is going to
change UM and the people are going to be the
winners and that are the ones who are embracing AI
and m L Are you and I mean, are you
find do you find lots of practical It sounds like
you're finding lots of practical applications for these technologies and
(29:52):
in your work completely completely absolutely and UM. I think
also as we talked about the the pandemic accelerating windows
over there, I think the pandemic has accelerated the use
of these UM technologies as well. I think they were
they were kind of there already. But if you can't
get on a plane to do to do something, uh,
(30:16):
and you can't, you know, then then maybe you use
the Microsoft Hallow lens to kind of like you know,
beam in and and have those And I think obviously,
you know a lot of you know, obviously, in the
worst in the in the height of it, a lot
so many companies had to shut down product television production
companies came back online and had people, you know, doing
(30:37):
all remote post production. Do you think that any of
that as we hopefully start to get out of these
you know, these really intense pandemic conditions. Do you think
any of that will be any of those innovations that
were born out of necessity and pandemic times will be
long lasting in the industry and drive those you know,
the kind of productivity games without question, there's without question.
(30:59):
And in fact, we you know, we have over two
thousand people at webther now, so we'll do we do
a lot of we we we we talked to our
team a lot and you know, a lot of the
things that we've made available UM technologies and choices to
work remotely, UM are overwhelmingly um uh overwhelming. Is that
(31:23):
is the demand to keep that going even post pandemic,
whether that be the choice of kind of a hybrid
workspace where you can be at home or in in
the office or in the studio. UM. A lot of
these technologies I think are here to stay, and I
think they've made leaps and bounds and technology in the
development of them as well, so and I think they should.
I think ultimately it it attacks the one killer of filmmaking,
(31:49):
which is time. You know, it just takes so much
time to do things. And if you can decrease that, UM,
you you basically benefit all other aspects of it. You know,
it's less money, is less complex, it's you know and
UM and obviously get turnarounds faster. So I think part
of that is gonna be remote compute as well. So
(32:11):
you have a lot of cloud providers UM like AWS
and Microsoft Azure providing compute power all around the world,
so you could do these renderings in the cloud now,
and so your staff can really be you can have
what's essentially distributed workforce and distributed compute UM. That's definitely
going to be part of the future. Thanks for listening.
(32:39):
Be sure to leave us a review at Apple Podcasts,
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next week for another episode of Strictly Business. When you
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(33:00):
what's buzzing, from audiobook recommendations to leading podcasts, album reviews,
to news variety as you plugged in What to Hear
powered by Audible, your home for all things audio, Visit
Variety dot com slash What to Hear
M Welcome to Strictly Business Varieties weekly podcast featuring conversations
with industry leaders about the business of media and entertainment.
I'm Cynthia Littleton, co editor in chief of Variety Today.
(00:20):
My guest is Praim Acaraju, CEO of Wetta Effex. Wetta
is the extremely well respected visual effects firm founded twenty
five years ago in New Zealand by filmmakers Peter Jackson
and fran Walsh. Acaraju is a veteran digital entrepreneur who
joined Wedda in early He's helped transform the company through
the sale of some of its software and its tools
(00:42):
to San Francisco based distributor Unity for one point six
billion dollars last November. Now, the rest of the business,
known as Wedda Effex, is hitting the gas on developing
original content from filmmakers other than Jackson has Acaraju says
the company intends to capitalize on the strong reputation it
has among directors. Acaraju offers insights into the global content
(01:05):
boom that he sees from what as perspective of receiving
a tidal wave of bids every month for visual effects work.
Our conversation also takes a turn back a few years
to the time when Acaraju was working with his partner
Sean Parker on the screening room home theater concept. Acaraju
explains how the frustration of not being able to get
(01:26):
that off the ground helped bring focus to his next
business efforts. That's all coming up after the break. When
you need to know when you want to hear what's trending,
what's buzzing, from audiobook recommendations to leading podcasts, album reviews,
to news variety. As you plugged in What to Hear
(01:47):
powered by Audible, your home for all things audio, Visit
Variety dot com, slash what to Hear Frame. Acaraju, CEO
of whata f X, thank you so much for joining
us today. Thank you, thanks for having me grime. Let's
talk about uh. You joined the company which is very
well known, very established in Hollywood as a top, top
(02:10):
cutting edge source of visual effects, digital graphics, UM, computer
generated imagery, all of the things that have moved filmmaking
so far in the last decade or so. UM. We
know it to be established as a very you know,
state of the art company, but it's undergone a lot
of changes in the last couple of years since you
arrived in early as CEO. Tell us about the transformation
(02:34):
that's happened at WETTA, and and tell us why it
was important to take the business in the directions that
you have over the last two years. Oh, thank you
so much. Yeah. So, we have had a tremendous amount
of change, UM and UH in the last two years,
and I'm really proud of those changes in the success
(02:55):
we had. The thesis coming in when I came in
a CEO was really too broad in UM that influence
and that that you just mentioned, uh so so perfectly,
which was what is the household name in the households
that make movies? UM, and it's and we we felt
(03:16):
like we had a lot more to offer to the world.
And there were in two things, UM. On top of
the growing the existing V effects and animation graphics business
as you mentioned, so I knew we had more to
offer the world and V effects and animation number two
was UM really UH will dive in deeper for this
(03:37):
is a specific strategic advantage of coming in and doing
original original content. Was the second area that was of
great interest. In the third UH was really software and
technology and and and I think that one that's the
one that's the big headline right now, which is what
(03:58):
we were able to achieve even a very short period
of time, um with with our technology uh software stack,
which we just did that deal with Unity. But those
are the three areas that we really saw um a
great deal um of of opportunity in and and uh
and that's what we've been up to. Let me ask
(04:20):
you just to step back a little bit, so you
when you came in, you had you looked at obviously
the company had a couple of different lanes of activity,
and you reference that. Just towards the end of last year,
the end of one you did a big transaction to
take a part of a lot of the software, some
of that proprietary software that Wetta had and sold it
(04:40):
to a company called Unity, which is I believe is
actually based in the u s. It's the San Francisco
based f X tech tech company that couldn't wait to
get its hand on all the Wetta technology. But talk
us through, like when you got to the company, how
did you figure how did you determine that a transac
action with a company like Unity for this section of
(05:03):
what we was up to made sense. I'd love to
talk a little bit about the business rationale for how
you decided to reorganize, what made sense in a sale,
and what made sense for you to stay and build
build the company, up the company. Great question. So, UM,
when we first um started UM in our you know,
(05:27):
sort of learning about the company, Shawn and I so
a longtime business partner with Shohn Parker who's also the
vice chairman of the company, and made investment the company.
We developed a very close relationship with Peter Jackson and
fran Walsh over years, and we started learning a lot
about the technology that they've built, and it was just extraordinary. UM.
We we both come from obviously Sean in an enormous
(05:49):
way from technology background, and we just saw that the
company had created so many tools that could empower so
many artists around the world. And we also knew with
the proliferation of so many streaming services. UM just think
about it, at the time, it was really only Netflix
(06:09):
that was the dominant player. Then we knew these other
ones were coming online, whether that be Amazon and then
Disney Plus and all these others, is that that was
going to uh greatly outpaced the supply demand curve, and
we knew that we had an opportunity to help the
supply side of that by packaging our tools um and
(06:34):
and taking those to markets. So we were very, very
good at shipping movies at whether the digital twenty five
year history a bunch of Academy of nominations and awards
and things and extraordinary work. And I started as a
super fan, uh from the beginning before I joined the company.
I still remained a super fan. UH. And I think
(06:54):
that's where my my love and my passion is rooted
in the amazing work that what it does and what
Peter in frant of built over a twenty five year period.
While we're the greatest company or one of the best
companies of ship movies, we're not the greatest company to
ship software. So in and they're in lie the need
for a partner, and we knew we can because that's
(07:17):
a wholly different uh, you know skill, and that's really
a licensing business, it really is. You're in the right
a content creative, like very creative created these tools to
create the art and in service of the director. And
that's also one of the reasons I feel like we
have such great advantage of the originals, which we'll talk about,
but we knew from the get go we had something
(07:37):
very special, but we wanted a partner to bring it
to the world because it's like you said, it's licensing,
it's support, it's documentation, it's it's it's a whole different
animal UM to ship software and support that versus ship
movies UH and support that. So we we started on
our own to do it on our own, quite frankly,
(07:58):
and we had tremendous amount of investor interest, and we
recruited a big technology team and recruited a new ct
O into the company UM. But we really figured out
quite quickly that the fastest way to market is with
an established partner. Now you are Unity Software. They have
one of the top game engines UM in the business.
(08:19):
The other that many people know is of course Unreal UM.
But the we were very familiar with unities platform and
their underlying technology. We're great admireers of it UM and
they essentially provide tools to empower gamemakers to make games,
and they were the perfect partner to then partner with
(08:42):
us to take our filmmaking tools out there to empower
new filmmakers in television, producers in the same line. So
now with that big transaction and that big you know,
evolution for the company, Now that that is that is
being completed, where is your focus now? So really is
the other two then? So it's growing the VFX business.
(09:04):
We've grown about since I've joined as CEO, which is
terrific growth rate. So we um, we're can I ask
what's driving that? Would you say? Is it all the
television shows that are being produced seemingly every hour? Kind
of exactly, It's like they can create. It's it's unbelievable, right,
(09:25):
Like every night I turn on Netflix or so and
there's like a new Yeah, exactly, it's it's it's exactly
the reason that when we turn on our TVs at night, UM,
new series, new film, UM, non trivial either like big ones,
you know, really stars, yeah, big stars, big shows. And
(09:47):
so we we have been oh yeah, we're way up it.
We we have and I'm sure we're just like other
VFX companies. Our bids outstanding, you know, is it is
kind of a good metric of the business, right like
how many bids were respond to studios call us up
and we are five times the amount of bids that
saying that we were, you know, four or four years ago, UM,
(10:10):
and we've grown the company nearly twice is twice. The
amount of the team has grown almost two x UM
since since I've since I've joined, growing revenue just just
like what you The reason that you said is just
an amazing amount of content production UM. And there's no
(10:33):
big release dates and things like you know on the
on the online you know, and and the streamer community
that they just released them right so and so the
so there's two things that are happening. We have way
more bids and the bids the turnaround times are shrinking.
They wanted super past yeah, exactly. So so that is
(10:57):
a major you can look at that as a very
good man trick of change, right beyond just the obvious
of grabbing our remote controls. UM is. Yeah, there's a
lot more bids and the turnaround times a lot shorter
than ever before. And so that has been great to see.
We're going to be expanding internationally. We already came to
l a UM that was really for original content as
(11:18):
well as the software as a service because as you
rightly mentioned, you know, UM, California is where Unity is based,
but also where all major tech companies that we would
have wanted to partner with. UM and the evaluated are
really mostly on this uh side of the side of
the coast and in the world, and so UM that
(11:39):
was why we were here. We're also going to be
expanding in New Canada and the UK and Australia UM
UH this year. I think all three of those, UM,
Australia and Canada first and we UH so we're we're
growing like crazy. So my focus is on that. My
second focus is of course on Originals as well. I
(11:59):
felt we have a particular advantage in that business because
of a relationship with storytellers, our relationship with filmmakers. They
want to work with what A because they know that
we're dedicated to the director and to the story more
than UM. If a business person, like I'm a business person,
so if I started what it would have looked Thank
god I didn't, it would have looked totally different, right UM.
(12:23):
But thank god we were founded by a visionary filmmaker
UM and visionary producer writer Fran Walsh, because that what
made it that that was that that etched into the
DNA of the company from day one, that we are
in the service of the director, of the storyteller. We're
(12:43):
in the service of the creative and at any cost.
So if they want to have visuals, as Peter has
proven over the years, Lord, yes, and by the way,
all the directors we worked with, I mean, uh, you
know we are doing the Avatar sequels and others, and
so yes, at any cost. That's it really is about that.
(13:04):
And if you can, if you look at the movies
that we've been involved with, it's not overdone. You know,
you're never pulled out of the story because of some
overwhelming visual effect or you know event. It's always really
and that's why I keep saying it's in service of
it is that, Um, it's never underdone or overdone. I
mean the best visual effects ever is non obvious visual effects,
(13:27):
meaning that you're in, you just it really did happen.
People can fly, yeah, direct and also or you see
these dramatic things. Yea, worlds can explode if people can fly,
like you know, you're just in that. You suspended all
disbelief because you just believe in what you're seeing. And
that's that's the home run. And um, I think we
(13:48):
deliver that, you know, consistently, and I think that's why
it's amazing filmmakers that we've had the absolute pleasure worrying with.
And that's that was our leg up UM and getting
too originals UM. I can't name the two directors we're
working with right now because we haven't announced these projects,
but they were too long time clients of what UM
(14:11):
and I went to them and I said, hey, we're
doing originals and one of them said, the best compliment
I've ever heard. And I said, you know, I want
you to make original with us and and and really
only with us. And then the filmmaker said, but you
only want movies only with what honest? Yeah, and uh
filmmaker said, well that's easy. No one else knows how
to make them, so that's like, that's a huge compliment.
(14:33):
Obviously that person has been working with us for quite
some time, but it was that trust I think over
built over twenty five years UM being founded like by
a director UM and never losing that dedication and spirit
I think is what earned us UM that reputation UM
(14:56):
and and trust in the in the creative community, and
that something I can say that is a huge advantage
for us UM in in in a very crowded space
of originals were also very very much um like like Peter,
very selective, and so we're not going after a huge
(15:17):
number of originals like I'm gonna see like a hundred
you know, on the slate and things like that. It's
gonna be very selective a handful of projects that we
do really really really well versus fifty projects that you
know we're in some kind of you know, volume game
or something like that. We're very much dedicated to quality
(15:38):
above all else. And if that means we make one movie,
then that means we make one movie. Don't go anywhere.
We'll be right back with more from prame Akaraju, CEO
of what a ex When you need to know, when
you want to hear, what's trending, what's buzzing, from audiobook
recommendations to leading podcasts, album reviews, to news Variety. As
(15:59):
you plugged in What to Hear powered by Audible, your
home for all things audio, visit Variety dot com, slash
what to Hear, and we're back with more from what
a FX CEO prame Akarashu. What a no doubt has
the incredible pedigree, but it is still such a crowded
field and it's not you know it's to to do
(16:21):
really high end content is not inexpensive. You have such
a great FX business going what what is the what
is the real driver of going into original content? Because
it's also like it's a hard marketplace for independent companies.
Do you want to go into own the sprockets? Do
you think it's a licensing game? Like how how are
(16:43):
you going to really make that work at a larger
volume than certainly what it has been associated with Peter
Jackson's project, Peter and France parts over the years. But
to bring in, as you say, like new people and
have holy original development, that's a really crowded field. Well, um,
it's in public announced, which is great that Peter and
Fran are going developing content for it. So that's a
(17:05):
nice start. Yeah, that one works, um and uh and
the other two are are absolutely brilliant. And we're just fans.
We just start with being fans, like you know, and
I think that that always would be a great guiding light.
But again we know it's crowded. Um, it's not so
(17:27):
crowded at the top, like when you're talking about great
content and great movies, right and um, and I think
that that's what gravitates towards what We are very very busy,
that's true, But we're not the biggest shot by any means.
And we are not the first shop that people call
when it comes to burning and turning and kind of
creating really quickly and like all that kind of stuff.
(17:48):
People call us for the big complicant stuff, like people
call us for the big third acts, right, and for
the big movies that are impossible and the world has
to blow up exactly and then reassembled by itself and
so like it's it's exactly right. So so we're not
by any means. You know, there there are many other
vidual effects companies out there much larger than us that
(18:09):
that are in that volume game. So I don't think
that we're not in a hurry um and and and again,
I think quality always has a place, no matter how
crowded it is. And so if you have quality stories
with quality filmmakers in a in a quality script, then
I think that you're going to always find that place
(18:31):
and it's going to be break out of the path.
As far as a business concern, which I think was
also part of your question, to be honest with you,
the whole film industry has changed since we wanted to
go into originals, right like, because remember it's I've been
there for two years, but then it has been about
two or three years in the planning, you know, since then.
And you know, there wasn't just the buy out or
(18:54):
the margin type of business. You know, there was theatrical
uh in a it's more real best way. Obviously they
were back end. You know, there was the film industry itself,
the head coode financing opportunities which largely don't exist now
for the most part. And so it is it is
interesting where it's going to go because I don't think
anyone really knows because it's when you again, when you're
(19:17):
on you're doing a thing for Disney Plus or Peacock
or or Netflix and stuff, they're buying it out. You know.
There it's theirs. And so that's what I'm saying, Like,
it's hard to it's hard to build that library and
that kind of value where you can take it around
the world. Because the platforms now reach around the world.
They reach around the world, they're not really economically a
(19:38):
subscription model is not a transactional model, so it's very
hard to audit to get paid back in because why
did someone subscribe to Netflix. Was it for Stranger Things?
Or was it for you know, you know, you an
obscure French film that you know exactly exactly and so
and so you know that's it. That's hard to audit,
(20:01):
right and so, um so, given given their all around
the world, given the fact that there are subscription models,
I think that it's it's largely changing the business to
where um, you know, people have to really kind of adjust,
um to to to this new way of But now
(20:21):
there's great benefits to that too. There's way more content
being created, there's way more risk being taken. There's you know,
it doesn't have to be just as sort of like
a superhero or a comic book, you know based movie
or film. It's it's so many different types of movies
in series make. I mean, for as a as a
fan of film and TV, there's like more choice than
ever in that way. So there are there are great benefits.
(20:44):
And for a creator, you get the chance to make
squid games, you know, or or things like that. And
so where maybe you weren't you know, didn't have the
opportunity to make that and have it being seen all
around the world. So um, I think of it. To
finally answer your question that you were asking, I don't
look at our originals as any different than the other
(21:08):
films that we're doing as a as a vendor. It
would be it just would be happen to be that
we would own or develop that i P and kind
of be a little bit of a control our own destiny,
if you will, like, because then we can actually own
this i P development. It will be pitched to those
normal players. Right We don't plan on becoming on our
own studio or distributing our own content in that way.
(21:31):
I mean, that's certainly not on the docket right now.
But do you plan to fund it? Do you plan
to finance your own content? We definitely will finance the
development of the content. I would actually be happily happily
co financed the content. But I've met with many of
the studios and they are not interested at this point.
And that's what that that would be that tough deal
(21:51):
making environment I was referring to. Yeah, stuff now they're like, hey,
will you know, and so we love it, we'll take all.
We'll give you a little piece exactly exactly. And that's
part of the new world that I think that we
are living in and again and as has its um as,
its pluses and minuses. UM, but it's um. It is
(22:12):
where we are. And I do think that consumers, you know,
I want it right and I think that that's the
that's the high road that the streaming companies could take,
is that it clearly the consumers wanted, there's demand for this.
You've mentioned movies number of times. Are you looking at
movies and television or are you focused on the film business?
(22:33):
So we are. We are focused on film. We're also
focused on movies right now, but also series. But the
three things that we're looking at um that are sort
of currently in development are all feature films. I know
you mentioned that your partner in this venture is one
of your partners is Sean Parker. Yes, UM, who and
(22:53):
I know if I've got the right Sean Parker. Sean
was involved some years ago now in a venture in
Hollywood called The Screening Him, which was probably a little
ahead of its time, UM, in terms of an ability
to give people the um the you know, the ability
to watch a feature film in your home, to be
able to watch it on you know, premier weekend or
shortly thereafter it was. It was a bold venture. It
(23:17):
came it came up very quickly and it and it
did not take root in Hollywood. Can I ask you
did you learn from that experience where you I know
that if I understand right, you were part of you
were involved. Yeah, I was a founder. I was a
founder and CEO of that company, and Sean was a
founder and chairman. Um. And we had tremendous support from Hollywood.
It was a tremendous learning experience. Um. It's funny many
(23:41):
of the CEOs right at the beginning of the pandemic,
many of the CEOs of the studios I spoke to
after like kind of like April May, they all one
way or the other said they all wish they did
the deal then because certainly, and I agreed with them.
Um and uh, yeah, that was a that is the
(24:02):
same Sean Parker. Um. And although there was a weather
man named Shawn Parker and which is funny, but it's
but that's uh so I'm I'm I'm partnered with the
one who's not a weather man and uh and so
it was a tremendous learning experience for me for sure. Um.
(24:26):
We had so many false starts at screening room by
the way, UM made our way through the exhibitors, made
our way through the studios, and what we all, what
we ultimately wanted to do was just provide more opportunity
and more choice for the consumer, you know, and if
you pay the premium, you can watch it at all,
(24:46):
if you went to the theater and watched it. We
all love theater. And in fact, the irony of it
all is that we did sign term sheets with many exhibitors,
including many, you know, major exhibitors around the world, and
at one point we had one out of four screens
in the US and one out of ten worldwide signed
up with us because we did the thing that nobody
(25:08):
really would have thought of doing, uh and no one
certainly would have given us credit for doing it because
we're more disruptors looking is that we we made sure
the exhibitor were financially participating in and at home viewing.
So all we did was it was that model was
much like Uber how Uber makes any car into a
(25:29):
taxi or Airbnb makes any home into a hotel room.
We used our software hardware to turn any living room
into an a m C, or any living room into
a regal or AIM into it and so and shared
the economics just the same as if it was you know,
and allowed our hardware software to UM to for for
(25:49):
for the exhibitor for a m C and Regal and
others to expand without any capital expendature. And then we said, look,
there's not too many theaters in the world. We had
the countrarian view. We said, there's not enough. They're just
not in the right place, you know, because and let's
let's use this software to light up like an uber
or like a like the Airbnb example. Let's use our
(26:10):
software hardware to to create these home theaters. And if
we kept the economics the same which we were doing.
We had a lot of interest from from from studios,
but at the end of the day, one thing or
another would have would would would spook them, and unfortunately
we were victims of media leak that did not come
from us UM and UM and unfortunately that that made
(26:35):
it a public conversation, which made it a lot harder
to get to get the deals done. But little did
we know that a looming global pandemic was right around
the corner. Um that basically then greatly accelerated it to
the point to where the studios is did it on
the run, right, I recall it seemed like a cool idea,
(26:55):
but where anybody's interests might be threatened. Of course, Hackle
get raised and and you mentioned the media leak, which
I do believe was a variety. Yeah it was. It
was real, Uh doing our jobs. Yeah, he's a I
mean I begged him not to do it. He said, listen,
if I don't do what someone else is going to,
which is true. I get it. I get it. I
(27:17):
still like on the f X side of your business
coming out of the pandemic, both the pandemic conditions and
the incredible leaps forward that we've been seeing with virtual
reality a r AI, all the acronyms of just there's
so much innovation going on at such a high rate.
Are you seeing Are you seeing like big productivity and
(27:41):
technology gains in the FX world at this time? Oh?
Absolutely absolutely. I mean probably the biggest thing that are
affecting UM effects right now is going to be artificial
intelligence and machine learning AI and m L and automating
a lot of the things. You'll never take the genius
out of the creative, You'll never take that artist touch
(28:05):
out of the equation, but you can get that artist
to that point a lot faster with you know, with
with you know, sort of machine learning and artificial intelligence.
So I think that's a very that's an accelerator, that's
a disruptor, and that's going to be very, very UM
important over the next three to five years. In VFX
(28:27):
in a R you mentioned a R and v R two.
Those are also disruptive, even positive, you know, fashion for filmmaking.
For example, UM, we are using Microsoft UM hollow lens,
which are the their their gargles UM to to do
remote location scouting. You know, you can actually put those
(28:50):
on and look around. It saves so much time and
energy and environmental impact and everything you can imagine, UH
is speeding up the process. We're also using a R
on set, so we're to help filmmakers visualize a set
or a scene. We can use iPads to actually have
an A R experience through there so they can actually
(29:11):
see what UM the virtual environment they're they're looking to create.
So you see an a R on set, you see
VR UM in location scouting anywhere in the world. Using
those UM and certainly VFX in particular UM a whole
new general it's gonna be generation three dot oh no,
(29:32):
I think it's gonna the whole pipeline is going to
change UM and the people are going to be the
winners and that are the ones who are embracing AI
and m L Are you and I mean, are you
find do you find lots of practical It sounds like
you're finding lots of practical applications for these technologies and
(29:52):
in your work completely completely absolutely and UM. I think
also as we talked about the the pandemic accelerating windows
over there, I think the pandemic has accelerated the use
of these UM technologies as well. I think they were
they were kind of there already. But if you can't
get on a plane to do to do something, uh,
(30:16):
and you can't, you know, then then maybe you use
the Microsoft Hallow lens to kind of like you know,
beam in and and have those And I think obviously,
you know a lot of you know, obviously, in the
worst in the in the height of it, a lot
so many companies had to shut down product television production
companies came back online and had people, you know, doing
(30:37):
all remote post production. Do you think that any of
that as we hopefully start to get out of these
you know, these really intense pandemic conditions. Do you think
any of that will be any of those innovations that
were born out of necessity and pandemic times will be
long lasting in the industry and drive those you know,
the kind of productivity games without question, there's without question.
(30:59):
And in fact, we you know, we have over two
thousand people at webther now, so we'll do we do
a lot of we we we we talked to our
team a lot and you know, a lot of the
things that we've made available UM technologies and choices to
work remotely, UM are overwhelmingly um uh overwhelming. Is that
(31:23):
is the demand to keep that going even post pandemic,
whether that be the choice of kind of a hybrid
workspace where you can be at home or in in
the office or in the studio. UM. A lot of
these technologies I think are here to stay, and I
think they've made leaps and bounds and technology in the
development of them as well, so and I think they should.
I think ultimately it it attacks the one killer of filmmaking,
(31:49):
which is time. You know, it just takes so much
time to do things. And if you can decrease that, UM,
you you basically benefit all other aspects of it. You know,
it's less money, is less complex, it's you know and
UM and obviously get turnarounds faster. So I think part
of that is gonna be remote compute as well. So
(32:11):
you have a lot of cloud providers UM like AWS
and Microsoft Azure providing compute power all around the world,
so you could do these renderings in the cloud now,
and so your staff can really be you can have
what's essentially distributed workforce and distributed compute UM. That's definitely
going to be part of the future. Thanks for listening.
(32:39):
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