this week, one of the most powerful men in hollywood is a computer geek. lincoln wallin of dreamworks animation. a video game impacts the internet and the best-selling author tries to reinvent the book. with reporters rich jarislowski of bloomberg, this week on "press: here." good morning. the movie business is very complicated. a blockbuster movie can actually be a money loser. a small production can make a migtd. film is in the end about profit and nobody profits quite like dreamworks animation. >> circus, circus, pull it out. >> one estimate says dreamworks animation may be the most

profitable movie studio in the entire industry. its classic shrek cost a mere $60 million to make. shrek grossed nearly half a billion dollars. >> that was really scary. >> that's just for the single movie. there were three shreks after that. dreamworks animation may be a studio but it's a technology company as well, and mit's technology review named dreamworks as one of the most innovative companies in the world. but as the stature grows, so too does the pressure. investors would like to see them expand beyond the two films a year. their next movie hits box offices next year. >> the tooth fairy. i knew you'd come. >> lincoln wallin is the new

chief technology officer at dreamworks animation. aside from the animators themselves there's probably no more important position there, joined by martin giles of the economist. as you guys are developing the new technology, i know computers are moving faster and better, i know that the hair in the character is going to be, you know, easier to see and more refined. so that's out of the way. what else is new? what else is interesting in the digital animation world? >> i think that's a great question. computers are getting powerful, more powerful. but the way they're getting more powerful is quite unique. they're not just getting faster. you are getting more computers in a box. >> what's the difference between more powerful and more fast? >> when they were getting faster you didn't need to change the software to actually use that power. now that they're getting calls, if you don't change your software it will go slower.

so the software has to take advantage of being able to spread the problem out over all those different computers and that makes it sound and feel a little bit like a cloud. so for an animation studio like dreamworks, we use thousands of computers and data centers to actually make those individual images. what we're doing now is sort of bringing those thousands of computers into the desk, if you like, of a single animator. >> what does that do for the animator? >> one of the biggest things when they moved from drawing on paper from pens and pencils, their natural skill turned from sort of a physical activity to key worlds, mice and something like that. so the interaction became very difficult. they became more like engineers. with all of this power, we're starting to give them back the fluid approach to expressing their craft. putting a pen back in their hand. of course a digital tablet or digital screen, but it gives

them a smooth way of making the characters perform. that's the biggest thing that affects our movies and its economy in the years to come. >> jeff katzenberg, i heard him say that there's something like 130,000 different frames in an animated movie. can you give us an idea of sort of the scale that we're talking here with this process? >> so you can start from the outside, as you say. there's 130,000 frames in a typical animated movie. each one of which has to be manufactured. each one of those frames probably has in the reach of 100,000 individual assets. so a typical movie involves half a billion files and 250 billion individual pixels. so that's the scale of the finished product. if you think about that product going through its hundreds and hundreds of iterations, each frame, each shot, each performance, at different stages of the production that's why we it -- it takes 60, 70 million

render hours to produce a movie over its lifetime. >> now, dreamworks animation was spun out of the dreamworks live action operation, the steven spielberg and jeff katzenberg operation. hasn't live animation drown more closely together? where's the line between the two? >> that's right. >> tremendous amount of animation is cg and the -- >> exactly. by the same token you have things like polar express where you're using animation techniques. >> i mean, avatar, lord of the rings, the hobbit, i mean these films are increasingly using cg to deliver the final images. of course the performances come from live actor and they're fi l filmed against green screens. avatar being the easiest example. yes, film ask isome -- is

coming home into the computer. the filmmakers get enormous flexibility to create a vision of the world and really we're in the business of telling stories, introducing characters and we can do that incredibly flexibly in the computer. setting up the real world to behave is challenging. beautiful, but challenging. >> i think what rich is getting at is when you split a company into, all right, we'll have cameras and actors in this company and cartoons for lack of a better word in this company, things are shifting more your direction. >> yes. >> in the end, it's the animation and the cg that will really drive hollywood. >> i think that's -- i believe that's going to be the case. that's right. it's not just the way the media is made. it's also the way the media is consumed. so the relationship between animated films or digital graphic imaginary and video games or websites and the

digital media the consumers are consuming, seeing a sort of marriage between the means of delivery and the means of production. that creates all sorts of exciting possibilities. whether that's cinematic, interactive experiences or movies delivered to your cell phone. i mean, all of these are different ways of using that digital technology. >> there's a danger though if you become a technology company, pixar made finding nemo, yes, the sea was beautiful and the fish in the water. it was a story. toy story for that matter. toy story, very unsophisticated by our standards in our animation. the story, so you have to remain a movie studio as well. >> i think that's key. i mean when we start a movie, eventually we get the story simply up in hand drawn storyboards. you can see how powerful that story is. the goal of the digital production is to do justice to that core idea.

those characters and the way the characters make you feel, what's being said. how they're behaving can get across with the images. the digital images draw you into the story. the story is paramount. >> when jeff katzenberg was at disney, he oversaw most of the most loved animation features. "the lion king" and "little merma mermaid", et cetera. is there anything that technology can do to bring backhand drawn animation or have we seen the last of that genre that goes back to the earliest days of disney? >> i don't think we have seen the last of it. obviously, i think one thing jeffrey took away from his time at disney was how fundamental technology was to the art of storytelling. if you remember beauty and the beast and the beast and beauty coming down that spiral

staircase, the only way the animators could actually produce those images was by actually moving to a form of automated drawing, because drawing the pictures from all the different perspectives was overwhelming. so that was the start of digital technology assisting the way in which you want to tell a story. he brought that to dreamworks and founded it on technology because he knew what would that do. i think as i mentioned, as the computers get more powerful we are able to get the artism closer to the natural skill. so graphic art will become increasingly important the way we texture and color the images will become important. we can produce very sort of 2-d hand drawn looking images. that can be very charming and compelling. i think the power is broadening rather than the narrowing and moving away from that. >> are we seeing a digital arms race going on? because disney has just splashed

out $4 billion on lucas films, right? >> not standing alone right now. >> you know, you're like the last man standing. i'm going to warn you we have to go to commercial break in a minute. but last man standing. >> we are one of the biggest animation studios. even with disney and pixar together, we still produce more high quality, top ten blockbusters than disney does in the animation area. i think that's partly to do with the way we approach this. the way we treeat each movie, ad with the creative vision unbounded. then we try to satisfy that using all of the resources of the company. that helps us deliver not only all the movies but each one better than the last. so in that sense there's an arms race, but an arms race in terms of maintaining the quality. in the end we're showing the movies to the same consumer. hopefully every single movie is seen by every single person. so we've got to satisfy them and

take them to new heights every single time. both companies. >> dreamworks animation. thank you for being with us this morning. up next, what's in that packet? keeping an eye on the traffic crossing the internet.

welcome back to "press: here." all over america this weekend, teenage boys are failing to mow the lawn or do their homework and are instead choosing to play halo 4 against each other on the internet over xbox. which means a small but significant amount of the information moving back and forth across the internet will be data from video game laser guns. halo is a $3 billion franchise. one of microsoft's most successful products.

sean sweeney has been tracking the traffic across the internet and he's a deep packet inspector from silicon valley's prosarah. may we call you inspector? >> yes, you may. >> there's a small but measurable impact. you can see halo 4 come on the internet. >> we could, yes. but the results were somewhat surprising. there was some other event going on tuesday as it happens. and so -- >> that was popular too. >> it was. in fact, a little more popular than halo, so what it appears the early returns are that while there was an uptick in gaming in a broad way, counterintuitively had something to do with some of the other gaming platforms. and halo is just now starting to take off today. i took a closer look at the data today and we're just now starting to see the impact. so on release date it didn't take off quite the way you'd expect. there's something -- there's some information out there from forbes that there may have been some glitches and some issues

relative to that. looks like -- yeah, looks like those are getting ironed out. but there were more users on the internet. however, they were reading. they were doing traditional web traffic as it occurs. >> do the analogy for us. use the analogy of the envelope passing through the post office. >> sure. >> how do you know that's a halo and not in too specific a term, how do you know it's halo packet? >> there's all kinds of fields within the packets and we can look at those and determine what they're saying, for example, halo has a specific title i.d. so we know exactly where -- what it's going to and how to deteriorate differential it from one of the previous versions. >> i saw something that suggested that one application was responsible for close to a third of all the u.s. band width. you can guess what it is. it's netflix. of course.

can that possibly be true? >> it can be true. in my review up in the lead-up to this, i was saying between 25% of -- i was seeing 25% of the provider's band width, it can be netflix. it shut down around sunday. it climbed and then sunday night it went away. again, people went back towards reading and researching and more and more people coming on the network. they were paying attention to their civic duty apparently. >> the kind of technology you've got, if i'm an internet service provider on the telecom company, i'm interested in what traffic is coming across my network. if i was say a government in china or iran i might be interested to see what is sending what kind of messages. so your technology works. it can be used for good or for

censorship, for shutting down opponents. how do you make sure that that doesn't happen? >> well, we're an honest company. that's what i can say around that. we don't specifically market or sell the product around the more devious aspects. again, our providers are so worried about managing the traffic in the network and trying to keep their subscribers which they can do with our equipment via personalized services for the gaming public. they can tailor services around that as an example. so our customers are really focussed on that. clearly, other things can be done with the data that we provide. but that's always been true of all internet technologies. it has always been there. while we provide a little more detail on it and certainly more color, we like to think, you know, these -- the ability to do some of these kind of nefarious things that you're suggesting has always been out there.

>> i'm interested in the net neutrality debate, about whether net nix or halo -- able to get a free ride or have to pay for the amount of bandwidth they're consuming or get special treatment. >> sure. we're neutral in net neutrality, of course. but i think in many countries there are no net neutrality rules. there is a recognition that the service provider has to maintain his network. however he sees fit. and they need to be able to manage capacity within that network. so in the example we were talking about previously, you know, if netflix is taking up 50% of the band width, well, that needs to be looked at or addressed or at least understood from a service provider perspective. so we think over time you'll kind of see a maturation in views and service providers will be looking to personalized services if you're a netflix watcher so you can get --

>> which you're paying for. but i do see the argument though, you know, net neutrality sounds like a very good idea until the kid next door is using so much traffic on bit torrent that i can't get anything completed and i go complain to comcast, because now i'm a dissatisfied customer. >> we need to understand we're dealing with a shared resource here. if there is no responsibility on the end user, then somebody needs to enforce it. the service provider needs to look at these things and do something about it. otherwise, as you say, bit torrent might take over the world or represent the larger internet bandwidth. that wouldn't be good for anybody. >> sean sweeney, we appreciate you being here this morning. we'll be back in a minute.

welcome back to "press: here." my next guest is a best selling author of four books. richard mason wrote the first book "the drawning peopowning p oxford. the book critic at "the washington post" said it was the best book to cross his desk in some time. nobody likes a good bodice ripper quite as much as martin giles does. this has got our interest, you have created e-books which are not new either, but this is an interactive book that you are selling on apple's ipad. >> yes. it's an app actually. we are calling an illuminated app. i guess in many ways i'm very old fashioned. i wrote the whole book by hand. >> the original book -- >> original book, yeah. >> this is it here.

>> this is it. right here. >> yes. >> my little portable office. >> very primitive. >> yes. then i saw an ipad for the first time and it was almost as though i had written a book knowing that an ipad might exist. i write about real history and places. i thought i just got to make an illuminated app for the ipad that really lets me tell the story in a way i always wanted to. >> so you import this over to ipad, not just apple book. >> no, gosh, i had no idea what a big adventure it would be to make. it took us two years to code. a year ago we had a perfectly adequate product, so once we worked out what it should be, we went back to the drawing board. coded it from scratch again. and, you know, there's a light version. if people want to try it, you can buy the real version for $12.99. it's so exciting to see people start to read it. >> what does it do that makes it different than an e-book?

>> you know, i thought about what the key pleasure is in reading. it's about emerging yourself. e-books all look alike and i hate that. once you've read 50 or 60, they drift into themselves. the app looks like itself, it's on 19th century paper. the illustrations are by hand. if you want to read it it's a beautiful illuminated manuscript, you can. but at the tap of the button you can see into the world. dan stephens, he reads it to you. you can just tap a paragraph and he starts to read at any point. i love being read to. at night, you know, switch off the light and be read to. >> as an author, as the wordsmith as opposed to the designer of this beautiful app which i was very impressed by, as an author, do you worry about disrupting the narrative when your readers go off to -- >> yeah. >> or engage in these multimedia

features? >> i worried about that a lot. it can distract and take out of the story. when a character plays a piece of music, you hear that music when you tap the screen. you hear it as the character plays it. singing mozart and that experience takes you deep into the story. doesn't take you away from it. >> did you write when -- when you were writing the book, were you thinking as you went along, here's where i should have some music or have an interview with me the author or did you finish the book and then come to that? >> well, it's interesting. as i write my new books, i do think that. >> is that -- >> yeah. >> hang on a moment, i might be ruining the book. >> that's -- >> i don't think it ruins the book at all. i mean, a great feature called the history button and you tap it and you can read the

historical background of the scene. but you're in the story. that means that characters don't have to tell each other things that the reader needs to know which is wonderful for a writer. particularly if you write historic historical fiction. i get asked a lot of questions and i want to ask authors questions while reading their work, and you can. you can ask me different questions directly on facebook and twitter. it's great to connect with your readers in that way. >> you'll make that template available to other authors through the publishing house, so they can create this enhanced book. >> yes. as we write, i show it to you. i think the writer created it, not a coder. it appeals to other writers and they talk about books already written that would work as an illuminated app. books they want to write. so i'm really -- i'm a great believer in sharing these things. >> we have a few seconds left. >> go into the ibookstore, if not, how do you find quit.

>> on the app store. go to history, you'll see the different editions. the app. a light version which is free. or just buy it. just buy it. >> okay. >> android -- >> let's be equal here. any android? >> we'll probably do an android edition. >> no. >> no. i love the ipad. i thought the ipad inside me -- >> richard mason, author of many good books. thanks for being with us. >> thank you for having me. >> we'll be back in a minute.

welcome back to "press: here." rich, you have been writing about windows 8, the new operating system with all the tiles that you touch. not necessarily a fan. >> well, it depends. if you've got a modern computer.

if you just bought something or buying a tablet or something that has a touch screen it's not bad. but my advice to people who have slightly older pcs and running windows 7, save yourself the money and don't upgrade. >> we're showing our age here. but there was a time in which you really needed to upgrade to get all the coolest things. these days on a pc, i don't care if it's a couple years old. at least a couple of years old. >> they really designed it for mobile devices, right? >> this is for the new device. >> it's sort of schizophrenic. they tried to create a new interface but oh, by the way, they kind of bury it. you have to go find it. >> the ability to touch if you have the touch screen i think is going to speak to a younger generation. i have seen people do that, touch screens are touchable. >> i think that i even found myself doing that on a non-touch screen pc.

if you have a mouse, it doesn't make sense. >> look for rich's column on bloomberg. thank you for being with us this morning. that is our show for this week. i'm scott mcgrew. thank you for making us part of your sunday morning.