A Hollywood Star Called...Newtek?

Tinseltown's leading supplier of animation software is gearing up for HDTV

Remember the Video Toaster? In 1990, the funky Amiga PC add-on made it possible for a novice to create, animate, and edit video on a PC--launching a video revolution in television animation and movie special effects. Creator Tim Jenison's plug-in card and graphics software replaced television studio gear costing up to $100,000, unleashing a new wave of Hollywood innovation.

For a time, Jenison's NewTek Inc. was the toast of technology startups. But when Amiga PC maker Commodore International Ltd. went belly-up in 1994, Jenison's San Antonio company nearly burned up with it, forcing the 43-year-old inventor back to the drawing board. For the past four years, NewTek has survived by churning out innovative computer graphics software, which has helped to craft everything from fireball-spewing dragons on television's Xena: Warrior Princess to the intergalactic spaceships in the movie Lost in Space. NewTek's Lightwave 3D software was among the technologies used to simulate the Titanic in the recent hit movie. Margot Pipkin, head of TV animation production for DreamWorks SKG, says Jenison's software is "taking over Hollywood." NewTek expects to be modestly profitable this year, on revenues of $17 million.

But for Jenison, NewTek's comeback is just beginning. Whether it can regain its past glory will depend mostly on the success of Jenison's newest invention, now nearing completion: a Video Toaster for the era of high-definition TV--technology that will let programmers and animators produce standard, digital, and HDTV content on a Windows PC. Says Jenison: "Our goal is to leapfrog the competition and create another upheaval like the Video Toaster created."

High sights for a guy who grew up without a television. Indeed, Jenison credits his parents' strict ban on TV- and movie-watching for his fascination with moving images and technology and for his desire to bring video technology down to the farm for anyone with access to a personal computer. Raised in rural Iowa, Jenison was a brilliant if nerdy kid, the son of strict Lutherans "who thought TV was a bad idea," he says. While other kids were watching Leave it To Beaver, Jenison was at his father's workbench, devising mechanical and electrical wonders. Those inventions often had a direct application, even then: In grammar school, Jenison rigged up an electric cord and battery pack to deliver a 10,000-volt jolt to a school bully.

Still a bit of a nerd in high school, Jenison learned to write software by reading IBM manuals and later picked up chip engineering from textbooks. Jenison also developed an interest in moviemaking and in the kind of TV sets he never had as a kid. Jenison now boasts a collection of 300 antique sets, including a rare 1959 Philco Predicta Danish Modern, now on display at NewTek's headquarters. "My career motivation was to make a real TV show," Jenison says. "I was just a frustrated filmmaker."

HOLY GRAIL. It all came together for the entrepreneur in the 1980s, when he discovered the Amiga and its unique ability to generate a standard television image. He found personal computers the perfect outlet for cutting the costs of TV production equipment, thereby allowing ordinary people to produce their own shows.

But Jenison's greatest challenge lies ahead. Recreating the Video Toaster for HDTV will require nothing less than discovering the Holy Grail of computer filmmaking--a low-cost way to produce and distribute live video for standard, digital, and high-definition television. Creating and editing such video means devising a system able to handle the digital equivalent of three CDs a second. That equipment now costs upwards of $500,000. But Jenison's goal is to make such a device as affordable as the $2,500 Video Toaster was in its heyday. "If Tim can do that, he'll have a real hit on his hands," says Charles A. Pantuso, head of HD Vision Inc., an Irving (Tex.) high-definition video production house familiar with NewTek's work.

Besides the technical challenges, Jenison is facing other hurdles. His forte is inventing, not managing. "Tim's a good engineer, not a good CEO. He's afraid to give up control," says NewTek co-founder Paul Montgomery, now co-CEO of rival Play Inc. NewTek loyalists hope Jenison's search to replace former chief executive Dwight Parscale, who left NewTek last March and recently joined rival Electric Image, will help keep Jenison on track.

LOYAL LEGIONS. Another challenge for Jenison: money. The company has plans to finance the launch and dealer training for NewTek's next-generation Video Toaster via a $10 million private placement of stock.

Can he do it? Jenison has learned from his mistakes. Once a company exclusively focused on one product, NewTek has since broadened its offerings, with software for Web developers and a color-test generator for studio engineers. NewTek also has kept its army of filmmakers and animators loyal by developing 3-D software for Windows, Mac, and Unix computers. NewTek regularly supplies customers with software to achieve new effects. "Tim's always coming up with unusual ways to make things happen," says Ron Thornton, a friend who runs Foundation Imaging, a Valencia (Calif.) TV special-effects producer.

Case in point: Frankie, the Singing Duck, a toy Jenison invented three years ago that moves around the office emitting Frank Sinatra tunes. Jenison created the duck to test an idea he had to use MIDI--or musical instrument digital interface software--to operate motors that move its feet, beak, and blue eyes. That's the kind of zany creation that has made Jenison and his NewTek a Hollywood legend. Next stop: proving he can bring the same creative spunk and staying power to HDTV.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE