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Death in Toon Town 

San Francisco's digital animation district is foundering, and Duke may be down for the count

Wednesday, Nov 22 2000
Vinny Carrella takes a bite out of his bagel. I sip my coffee. We both look briefly away: at the table, out the window, at the other customers in this upscale yet gloomy Potrero Hill cafe. Duke may be dead. Likewise Sister Randy. Mr. Cranky's on the way out. And the Smile Time Puppet Theater guys are, for all we know, a couple of stiffs.

"I'm scared as hell," Vinny says.

Everybody is.

San Francisco Toon Town may be going down.

On Friday, Nov. 10, Protozoa, the S.F. tech company whose main division is the digital animation house Dotcomix, told its 60 writers, animators, modelers, and everyone else to take the weekend off and not come back. A few weeks earlier the Steven Spielberg-backed entertainment/animation Web site had crashed and burned. Entertaindom, the Warner Bros.-backed cartoon-heavy Web site, is downsizing, with a rumored burn rate portending more of the same. The cartoon producer Spunky Productions Inc. has decided to cut its cartoon-making business and focus almost entirely on running gift-shopping Web sites. The rest -- Web animation companies such as, Icebox, and others -- are likewise eating through cash.

Carrella's own small animation shop,, which had done work for Dotcomix, is seeing cartoon development contracts dry up. Carrella's figuring he'd better invent a new way to make money in the next month or two, or shut down.

"I'm thinking, I'm not going to make it through Christmas unless I change my focus," Carrella says. "To what, I don't know."

After a Fantasia summer of endless Web animation deals, San Francisco's Potrero Hill digital animation district is beginning to resemble the set of Who Framed Roger Rabbit following a cartoon version of the St. Valentine's Day Massacre. There are bright-colored, big-headed corpses everywhere.

The 'toon carnage is, in one sense, another banal casualty of our local technology industry's ongoing financial malaise. The collapse in technology stock valuations has scared off the sorts of investors who once hoped to get rich off Web-based IPOs, cartoon or otherwise. Because Web sites of every stripe are dying, the need for Internet content such as cartoons has greatly diminished. And, as in other hubris-driven Web industries, animation entrepreneurs vastly overstated the potential demand for their product, in this case slow-loading computer cartoon shorts.

It's all part of the most blithe industrial collapse history has ever known, if the conventional wisdom is to be believed. Every fun, cool, weird, or interesting Web-oriented business is closing down, or is about to. But, the conventional wisdom says, it's all for the good -- the bad companies are being weeded out, the good ones are merging with one another, and the end result will be a stronger, more sustainable technology business environment.

Even if there is a net loss of jobs, the local version of this CW holds, it can only help matters. Prices on apartments and commercial space will stabilize. Artists and other creative people will again be able to afford to live here. The city's cultural diversity will be preserved.

But to me, the decline of the local digital animation business, as exemplified by the recent closure of Dotcomix, feels anything but blithe. It seems as though, as our city remains engaged in the entirely laudable battle to preserve arts space in the face of a dot-com invasion, another portion of our city's cultural wealth may slip away without much notice.

When we lose the hundreds of animators and writers employed in the Web-animation district around the Potrero Brewery -- many of whom do performance art, radio theater, and all sorts of other cool things on the side -- I'm not certain a painters' colony will take their place. A bunch of Yahoo! shopping sites, perhaps?

A couple of weeks before Dotcomix went down, I had lunch with Damon Danielson, the company's CEO, at the same Circadia Coffee House where Carrella and I would later lament the company's demise. Danielson, a former VP at Sony, had been involved in some venture capital start-ups. He had joined Dotcomix back when it was assumed the company would bring in significant money with an IPO.

He was your usual venture-capital start-up CEO: a Yale MBA, the type of guy who's as happy making sausages as cartoon characters.

"If there's a medium, and there's a way to create some value, we'll be there," Danielson said of Dotcomix, adding that within three years he hoped to make his company competitive with the major Hollywood studios.

After that lunch, I went back to Dotcomix headquarters, where the company flack showed me the equipment they used to create their brand of animation, a sort of high-tech puppeteering that allows cartoon characters to interact with real people off screen. At the time, they were in the midst of the Duke 2000 presidential campaign, for which Dotcomix programmers and writers gave life to the Gary Trudeau cartoon figure loosely based on Hunter Thompson.

Thanks to a combination of computer graphics and a process called motion capture, the Duke cartoon character was able to interact with interviewers in real time. A backstage actor wore a special suit rigged with sensors, and when the actor moved, data about the scale and direction of his movements was translated into an on-screen image of Duke via a sophisticated combination of hardware and software.

According to a copy of the Dotcomix business plan I obtained, the company would make scores of relatively cheap cartoons -- once the suit, software, template illustrations, and technical jiggering were in place, production was mostly a matter of figuring out what the characters would say -- then lease the skits out to other Web sites in need of content.

The plan's core tenet -- "rapidly prototype diverse offerings and exploit those that succeed" -- basically meant the company would cook up dozens of cartoon shows, in the blind hope that it'd get a hit, and perhaps even move a character from Web to television. In this way, the logic went, Dotcomix might sidestep the traditional Hollywood development process, and end up owning its own shows.

"Getting a television show on the air through the traditional channels is a very time-consuming, very unrewarding process," said Dotcomix creative director and founder Brad DeGraf, during a conversation in his office a couple of weeks before the company closed. "One of the great things about the Web is that you get feedback immediately. It's a better way to go to TV."

And they were succeeding, after a fashion, despite the mixed quality that resulted from their mass-production-oriented business plan. Duke appeared on the Larry King show during the presidential campaign in a rather funny bit done with Al Franken as a foil. Sister Randy, a chain-smoking nun who gives bogus yet authoritative-sounding lectures about famous artworks, was just signed to a deal with the BBC.

"We've been successful in multiple projects. We're talking with New Line Cinema right now," Danielson explained, without bothering to mention that he was in secret negotiations with three companies to leave Dotcomix, that he may have been less than clear to other Dotcomix managers about the company's apparently dire financial straits, or that a few of days after lunching with me he would take a job elsewhere, maiming if not destroying Dotcomix's chances of getting new funding.

"When these things blow up nobody wants to be around. Right now we're trying to fight this thing out as far as a landing that keeps the team together. That's what I'm concerned about right now," Danielson noted a week after Dotcomix closed, calling on his cell phone from Taipei, on his way to the Philippines as part of a fund-raising trip for his new employer, which he said is called Video 4 Eye.

Others, both in and outside Dotcomix, say Danielson's concerns lay more with saving his skin, leaving the artists, technicians, and company officers who had worked under him to twist in the wind.

In post dot-com San Francisco, Danielson and his tribe will be fine. It's the others we have to worry about.

And that's what brought me to a table at Circadia with Vinny Carrella, discussing San Francisco's current 'toon malaise, wondering what the current downturn might mean for San Francisco Toon Town.

The current malaise represents quite a change from June's World Animation Celebration. Then, the swimming pool at the Hollywood Roosevelt Hotel was packed with Bay Area cartoon-company canopied kiosks, where executives handed out expensive development deals as liberally as other conventioneers might distribute logoed mouse pads. Within a couple of months, many of the deals dried up.

"Now, the bottom line is there's no money," said Carrella. "These shows cost a lot of money, and there aren't enough eyeballs [visiting Web sites] to fund these projects. What it comes down to is there isn't a wide enough audience for this technology yet. If what the Web is attempting to do is duplicate a television experience in this space, it is destined to fail. Television does it so much better.

"Nobody's done the Birth of a Nation of interactive media," Carrella said, referring to David W. Griffith's racist masterpiece, which single-handedly invented much of the language of modern film. Before that, movies largely consisted of stage plays put to screen.

Web animation is at a similar developmental stage. On Entertaindom, the Warner Bros. site that is effectively the slickest of the Web cartoon venues, feature presentations include Web-cartoon versions of the television show Xena, and the old TV show Kung Fu, only now it's Kung Fu 3D -- old standards pumped through a new venue.

The parallels with early cinema also extend to San Francisco civic discourse. Our city's intellectuals make disparaging dot-coms the center of conversations about local social woes. Intellectuals 85 years ago denounced cinema as an infantile facsimile of Broadway, a corrupter of the national soul populated by nihilistic, narcissistic charlatans -- their era's dot-commies.

So if history is any guide, there's an idealistic hope that something good might come of all this, that the current downturn is just a detour on the way to the creation of a new literary language.

There's practical hope, too. Dotcomix founder DeGraf called me a couple of times over the weekend to say there's a possibility his closed shop may be bought by another company, and resurrected. "We may be pulling a rabbit out of the hat," he said.

Now, sure: This is exactly the kind of thing he might tell a journalist in order to keep the Dotcomix collapse out of the public eye. But DeGraf's the kind of guy one likes to believe -- he did, after all, spend Dotcomix's final day visiting competitors, trying to help his laid-off employees find new jobs.

So I'd like to imagine that DeGraf succeeds, that the Duke doesn't really die, and that the cartoon character's brief silence was merely the result of one of his routine, drugged-out stupors. In my dream, Sister Randy continues blowing smoke, cracking wise about Rembrandt. Mr. Cranky continues bitching. And the Smile Time Puppet Theater guys -- two crude digital hand puppets who move around in a box -- continue getting themselves into tangles with the Ku Klux Klan.

I imagine they'll continue, in their odd, haphazard, perhaps even doomed way, to turn San Francisco into the birthplace of a Web cartoon nation.

About The Author

Matt Smith


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