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Note from FilmJockey: The following article appears in the current issue of InterPark. Written by Judith Rubin and used with permission from Paul Roundell and InterGame Ltd. Contact information can be found at the end of the article.
Iwerks Entertainment Inc., the Burbank company that bears Don Iwerks' name, has been through a lot of ups and downs since its founding in 1986. Iwerks' roller coaster ride began with a spectacular initial public offering in 1993, followed by an equally spectacular stock-price crash. CEO Stan Kinsey departed and the company, under stockholder pressure, embarked on a long episode of belt-tightening. More blows followed: this year alone, an attempted merger with Showscan Entertainment was blocked by stockholders, and a potent anti-trust suit Iwerks brought against competitor Imax Corp. was dismissed (Iwerks is appealing the ruling).
Through it all, the company has held onto the general goodwill of the industry. Don Iwerks himself, a venerable, second-generation Disney veteran, still works full-time at the company and recently received an Academy Award for Scientific and Technical Achievement. Iwerks' newest chapter began early this year, when Charles Goldwater became its new chair, CEO and President. To get an idea of the company's current direction and emphasis and its plans for the future, we spoke with Goldwater and two other members of the Iwerks team, Jon Corfino and Don Savant.
Charles "Chuck" Goldwater recently succeeded Roy A. Wright, who was CEO/President since July 1995 and chairman of the board since March 1997. Some of the actions he took shortly after assuming his new position were: the hiring of Jack Shishido as Senior VP, Worldwide Sales and Marketing; the appointment of Bruce A Beda, Chief Executive of Orion Partners and Peter Hanelt, CEO of Natural Wonders as new outside members of the Iwerks Board of Directors; the hiring of Schroders as the company's investment bank and a number of internal promotions.
One of the assets Goldwater brings to Iwerks is a solid footing in commercial cinema. Formerly CEO and President of Mann Theatres (Cinamerica Theatres L.P.) he served at Mann Theatres from 1995 through its sale in December 1997. During his tenure there, he presided over a major expansion push, developing and implementing plans to give Mann's multiplex circuit a brand identity based on the company's Mann's Chinese Theatre in Hollywood.
As Senior VP and General Manager of Sony/Loews Theatres from 1990-1995, Goldwater directed the development and operation of the Lincoln Square theater complex in New York City, which includes the first of the new generation of commercial large format 3D theaters. He was responsible for bringing in Mary Jane Dodge as theater director. Goldwater describes his involvement with the complex as "intensely prideful and professional."
He's left his name on it, too. "At the main lobby level is a scene showing an old movie theater front, and a marquee with pennants. Each pennant bears the name of someone connected with the theater."
Goldwater was one of the first to look at the project sites for similar Sony theaters in Berlin and San Francisco, and participated in their early planning and development meetings. "San Francisco was going to be the next generation of the model that began with Lincoln Square. Now it's developed into more of an entertainment project. But it all began with a spark of vision from Peter Guber."
Goldwater stayed with Sony from 1990-1995, prior to joining Cinamerica. Before that, he served in various senior executive capacities with National Amusements and with USA Cinemas in Boston. Active in a number of professional associations, Goldwater has since 1987 a member of the board of directors of the Natl Assn of Theatre Owners (NATO). He has chaired a number of NATO committees and currently serves on its executive committee. He serves on the board of directors for both the Motion Picture Pioneers and the Will Rogers Organization, of which he is also Secretary.
Iwerks has a large network of theaters in for-profit venues, especially simulation theaters in amusement parks, and produces and distributes films for those theaters. But most of its large format theater sales have so far been in the nonprofit world of museums and science centers. Will Goldwater be moving the company more toward commercial large format sales? He's not ruling anything out in either direction. "We're very committed to the institutional business and will complement that with our entry into the commercial arena," he says. "It's an extension of existing initiatives and an addition of new ones, designed to grow the large format industry, expand the company's business potential and better serve our clients."
While Iwerks serves the giant-screen cinema market in multiple formats - with both systems and films in 8/70 (8-perforation, 70mm) and 15/70 (15-perforation, 70mm) - Iwerks' major competitor in the large format business, Imax Corp., offers only 15/70 systems and films to the same market, steadfastly and publicly insisting on that format as the only one of acceptable quality for giant-screen theaters. (This forms the basis of what, in the industry, is known as the 'perf wars.')
Goldwater is willing to let the market decide for itself. With Sony, he presided over the opening of a landmark theater that featured an Imax 15/70 system; now he presides over a company that offers both 15/70 as well as its best-established alternative, 8/70. "This is a market-driven, consumer-driven business," he says, pointing out that nearly 30% of institutional large format theaters today are 8/70 theaters. "If alternative formats were not acceptable to the market, they wouldn't be there. It's not our place - or anyone's - to dictate standards self-righteously. Rather, it's our mandate to provide products that the market needs."
"There's every reason to bring the magic of large format films to more people in more places," says Goldwater, "and offering a choice of formats makes that possible. Not every client can support the capital investment and expense of the 15/70 format. I applaud Imax for helping to expand the market, but one can't impose terms on it. The average movie-goer has the ability to decide for himself or herself what constitutes good quality."
"The issue should be addressed sensibly and with an open mind," continues Goldwater. "A fair share of revenue should go back to the filmmaker and distributor, and the exhibition of a film should not be limited because of film size or perfs. If you allow technology to limit who can play a film, you hurt the filmmaker and curtail the growth of the industry. You cut back on the potential of filmmakers and distributors to get a return on their investment of time and money."
Under Goldwater's leadership, Iwerks has deepened its commitment to expanding and maintaining a quality film library. With nWave Pictures, the company entered its first large format film production venture, investing more than $1 million in the movie Encounter in the Third Dimension (E3D). This film will be co-distributed by Iwerks and nWave in multiple formats and versions: a 40-minute, stereoscopic 3D version for large format 3D theaters; a 40-minute, anaglyphic 3D version for other (single-strip projection) theaters; a four-minute ride film version for simulation theaters; and a 12-minute 3D entertainment version for specialty theaters in amusement parks.
Iwerks currently distributes ride films to more than 100 motion theaters, for which it provides systems in 5/70 and 8/70. Continuing the E3D distribution model, the company is now looking for additional potential within the existing large format library. "We're talking to filmmakers and distributors about extracting motion-simulation sequences from existing films," says Goldwater. "It's an easy way to expand the library and gives the film a new life."
He's also excited about the company's new generation of 3D simulation theaters, and about plans to take specialty theaters in amusement parks even further, to a "4D" level through the addition of in-theater special effects. "I was never more impressed by the power of ride simulation than with a recent demo our company put together," he says.
"It takes an existing cartoon film and adds motion programming plus effects - a spray of water in the theater when a character in the film gets splashed, pieces of foil fluttering down when something is blown to ashes. The impact on the viewer goes beyond anything else in simulation today."
The new CEO of Iwerks views the company now in his charge as an essentially powerful entity that needs guidance but no radical changes of direction or personnel. "Iwerks has always had and continues to have an outstanding reputation," he says. "It has always been a great technical and hardware provider. It is a company of talented, qualified people doing good things. I intend to build upon that - to add opportunities that expand our business and prospects of revenue - to make the company perform beyond hardware sales and add a strong service orientation. We need to better understand our relationships with our clients. We also need a sharper focus, a little more discipline - and more marketing to get the word out. Jack Shishido [Iwerks' new VP of Marketing, appointed by Goldwater] is going to be a major leader of that effort."
In Goldwater's vision, Iwerks will become "increasingly, one of the world's leading entertainment companies: moving, in a carefully focused way, toward being the ultimate full-service provider of hardware and software for specialty venues." And those specialty venues could crop up in some unexpected places. Looking beyond existing markets, the company is investigating retail centers and other non-traditional venues for further expansion.
The news hasn't been all cheery since Goldwater moved in. Fiscal revenues at Iwerks have dropped considerably in recent months, and the company staff was trimmed. "This was primarily due to a loss of sales in Asia," he says, "where revenues disappeared completely last year." Another setback came when the attempted merger with Showscan failed.
"As a logical consequence," says Goldwater, "the company reduced overhead, which included personnel and other operating expenses. This is what any good management would do. We are pushing for every penny of operating cost efficiency, and we learned a good lesson from the Asian downturn. Sales are coming back and we are well positioned to benefit from the recovery. Our cash position is solid - we have no debt on the books and we have adequate cash and working capital." Goldwater continues, "Our current fiscal year plan shows a significant projected turnaround that will put us on the road back to profitability."
According to Goldwater, the future of the specialty film industry is dependent on the quality of the films, and the key to better films lies in increasing the financial return to filmmakers and distributors. Iwerks reaches out to filmmakers by providing tools, facilities, a variety of viewing formats, production sponsorship and other support.
"By making it more affordable to build large format theaters, we make it possible for films to reach more locations and bigger audiences. This returns more money back to the filmmaker. The number of filmmakers using our facilities is a testament in itself. For 11 out of the last 12 large format films produced, the filmmakers have done their post-production screening work at Iwerks. Our cameras and rigs are top quality, and anyone can rent them for any production, with no strings attached."
"More great films are our number one need," Goldwater told an industry audience at the 1998 ISTC meeting. "To produce them, filmmakers need to receive a substantial economic return. Film is our product and the lifeblood of our industry. Film - not technology - is what's important to the audience."
Jon Corfino
Senior Vice President of Film/Executive in Charge of Production
"The future of the business is all about film," concurs Jon Corfino. It's not about the "I" companies; it's about the content that will be produced and distributed. The future will relate to how we distribute, market, promote and create excitement around content."
"If you stimulate production, you put more butts in seats," he continues. "What the large format nonprofit network has done up until now works well, but there are also commercial theaters and destination theaters. Everest created a new awareness of special format film, but there's still great opportunity to define the industry through other types of films and theaters."
Charles Goldwater promoted Jon Corfino to his current position in March 1998. Prior to the promotion, Corfino was VP of Attractions for two years at Iwerks. As such, he was responsible for film production, marketing and sponsorships for the company's owned and operated theaters. His new responsibilities include aggressively expanding Iwerks' participation in film production and distribution. Corfino began doing consulting work for Iwerks as an independent producer in 1993. His 20-plus years of experience in the leisure industry include 13 years with Universal Studios, where he was involved in the creation and production of such attractions as Back to the Future - The Ride; E.T. The Extraterrestrial; and Earthquake. Corfino also worked in the areas of business development and corporate sponsorship at MCA.
Corfino engineered the partnership with nWave Pictures to co-produce and distribute Encounter in the Third Dimension. Recently, he negotiated Iwerks' acquisition of distribution rights for Pirates, a 3D entertainment film produced by Busch Gardens, which Iwerks will distribute to specialty theaters in amusement parks.
Don Savant
VP, Worldwide Sales
Don Savant has been with Iwerks Entertainment for a full 11 years. He began his professional life in the insurance and real estate businesses.
"I made the transition through nepotism," he says. "My uncle, Don Porterfield, worked with Don Iwerks for 30 years at Disney, and helped Don start Iwerks Entertainment. My brother in-law, Mark Adams, was the company's first employee, becoming VP of Manufacturing. Mark eventually left to work on Tokyo Disneyland."
"I wanted to switch gears," says Savant. When real estate got slow at the end of 1987, Mark invited me to help with import/export documents at Iwerks. Then I was invited on a film shoot by Don Iwerks. He was shooting the Grand Canyon to test the 9-camera 360-degree rig. Iwerks was so small then, everything was a team effort - selling, manufacturing, procurement, even loading the truck. I got into sales in 1993. I was captivated by the dream that Don Iwerks and Stan Kinsey had."
Savant opened the company's Asia-Pacific office in Japan and made his home in Asia for several years. The office was moved to Hong Kong in 1995, and Savant remained there through 1997. Now he supervises international sales from Burbank. "I learned the business from the ground up," he says. "I got to see every aspect of things, and it gave me a complete understanding of the company and the business. It makes me a better salesperson. I can talk to a client knowledgeably about how the product works, and I understand the film element as well."
Other prominent sales staff at Iwerks include Bob Dean, who is dominant in North American business and has sold systems to Premier Parks, Great America, Paramount and Dollywood. Fitz Otis is VP of Sales for South America, Africa, the Middle East and parts of Europe. Cindy Zelkha is Director of Sales for Iwerks in Europe, and since April 1997 has held the company's London office. "We've had five recent sales in Europe," says Savant, "a large format theater to Virgin Cinemas in Edinburgh, a simulation attraction at Newcastle in Edinburgh, a large format and a simulation theater for Agape S.p.A. in Rome, and a simulation theater to a client in Austria."
"We are poised to succeed and become profitable," he says.
"Stan Kinsey was once the life force of the company, and since his departure we hadn't fully recovered. Chuck Goldwater brings new focus, experience and credibility that had been missing since Stan's departure. He's not flashy, but Iwerks doesn't need flash now. We need a strong, stable leader. Goldwater has focused us to move forward and expand."
Judith Rubin is a freelance writer and publicist for the attractions industry.}
©InterGame Ltd. (InterPark) - Published on 1570.com with permission.
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