TINSELTOWN'S DIGITAL TOMORROW GIZMOS MAY KEEP MOVIE WORK IN L.A.

Byline: Valerie Kuklenski Staff Writer

In the era of Clark Gable and Judy Garland, Hollywood was a local industry where actors, makeup artists and propmen would commute to the area studios. Since then, technological and economic factors have made ``Hollywood'' more a concept than a reality, with productions nearly as likely to happen in New Zealand or Toronto as in L.A.

Now the industry faces new challenges: Napster, TiVo, digital filmmaking, virtual technology, video and DVD piracy. These are the specters that should haunt entertainment executives. But Hollywood has always shown itself to be Darwinian, adapting to new technology not only to survive but to make money.

And interestingly, one of biggest changes down the line may bring Hollywood and jobs back home.

The virtual stage - computer-generated sets and exterior scenes - probably will be ``the greatest engine of change'' in film and TV production, according to James Korris, executive director of the University of Southern California's Entertainment Technology Center. ``It's kind of like a very advanced version of chromakey,'' he said, referring to the familiar blue-screen process that puts maps and rain scenes behind TV weathermen.

``What the virtual stage does is it puts hand props and live talent into a virtual environment. And the environment can be completely computer-generated or it can be something that exists.''

As an example, Korris says, you could go inside the French royal palace at Versailles and shoot a lot of pictures and then put actors into the scene.

This could save producers millions of dollars - and as many headaches - by eliminating location travel, set construction, weather complications and interference from passers-by. But the best news about the virtual stage is that it someday could stem the flow of runaway production, as filmmakers shoot the action on a local soundstages while the exterior shots are added in.

Meanwhile, as engineers try to make humans look believable in a synthetic background, other technological revolutions are brewing. The entertainment industry isn't trying to squash them but to co-opt them and cash in. It won't be an easy battle though, and there will be some casualties as jobs become obsolete.

--DIGITAL CAMERAS: In this new realm, anyone can be a filmmaker. It's creating a new way of thinking about Hollywood, parallel in a way to the 15th century when printing presses and rag paper became accessible to the masses, allowing almost anyone who could read to become a published writer or poet. People discussing the trend frequently use the word ``democratization.''

For low-low-budget filmmakers, some digital video cameras, priced as low as $750, are good enough for their projects. In fact, the Sony consumer models are so good that camera operators on the Sony lot must sign a waiver promising not to use them professionally before they purchase them at a discount at the studio store. Cut out the costly steps of buying and processing film and they're on their way.

--REPLAY TV: TiVo, the new television box, enables a viewer to watch a program live, pause it mid-scene for a phone call, do instant replays, store it for later viewing, and - gasp! - block out the commercials. (As if VCRs and remote controls weren't giving TV ad sales people enough headaches.)

But NBC and CBS have no fear. The networks' parents, General Electric and Viacom, own stakes in TiVo, which is working with advertising agencies to develop commercial alternatives such as incorporating brands into programming, as was common in the 1950s. Coca-Cola and Universal Pictures are exploring similar remedies with TiVo competitor ReplayTV.

--OTHER HIGH-TECH GIZMOS: Digital movie projection seems to be over the horizon still because of the ongoing debate over who is to pay for reoutfitting the country's theaters - the theater owners (many of them already in financial straits after their 1990s building boom) or the studios? However, the technology is ready, and it will be shown off Tuesday in New York when Ben Affleck, Miramax, Disney, AMC and Boeing present the new movie ``Bounce'' as the first ever satellite-delivered, digitally projected movie.

High-definition television, or HDTV, is entering the market at a snail's pace because of several factors, according to Robert Gustafson, director of the Entertainment Industry Institute at California State University, Northridge. There are about a dozen formats for broadcasters to choose from, and the system requires a roof antenna with no obstructions in the satellite's direction, currently cannot take local commercials and won't accept closed captioning. The purchase price of the screens and receivers is high (more than $3,000), and the outlay for networks and local stations to convert to HDTV is astronomical. The Federal Communications Commission has set a May 2002 deadline for broadcasters to switch over, but that may have to be extended.

The manufacturers of new and soon-to-be-released writeable DVDs - which someday will replace videotape for recording off of TV - apparently have not learned from the Betamax debacle. There are three different formats coming out (DVD-RAM, DVD-RW and DVD+RW) that are incompatible with each other and, in the case of DVD-RAM, with current DVD players. The DVD Forum, representing 230 manufacturers, was established in hopes of reaching a compromise for the consumer's sake, but that effort failed.

--'NET MUSIC: Napster, the music downloading Web site, is mired in a legal challenge over its presumed threat to the recording industry's tightly controlled ways of making money and protecting artists' rights.

But even as the battle wages in the courts over whether it is piracy or one of the greatest promotional tools ever, German media giant Bertelsmann has decided to join it rather than beat it. Bertelsmann last month announced a deal with Napster to develop a new membership-based distribution system that would allow for artists' payments, which could lead to Bertelsmann owning a stake in Napster.

In exchange, Bertelsmann, which owns megalabel BMG, agreed to drop its lawsuit against the file-sharing service. But this won't end it. Other free music sites have already cropped up.

--'NET MOVIES: Films on the Web, for example, have a small audience at present and are limited to shorts because features would take too long to download. But with their new digital cameras, budding Martin Scorseses will not be at the mercy of major studios, networks and distributors to get their projects out there. There are several small companies looking for short films for Internet, airlines, schools, shopping malls and other nontraditional outlets.

Studios, however, don't feel threatened by this subculture; in fact, they see it as a farm club of sorts for new filmmakers with big-league talent. For example, the two creators of ``405: The Movie'' were signed by talent agency CAA within days of the debut on iFilm of their effects-laden short. The short animated series, ``Thugs on Film,'' created by Mondo Media, will soon be seen in expanded form on the cable channel BBC America.

``It isn't about seeing movies on the Web,'' said Errol Gerson, once the head of new media for CAA and now principal director of Four Leaf Management, a venture capital firm. ``It's about leveraging great content so you can see it anywhere.''

There are going to be issues of how do we filter all that material, adds Ken Howarth, executive vice president of sales for IMAX Ltd.'s digital division. ``But what a great opportunity to access a tremendous body of creative talent out there. And they don't have to have $200 million and be a James Cameron to get into production.''

--THE WEB: The 'Net is having its own problems with many high profile companies going under. Pop.com, the much-ballyhooed site backed Steven Spielberg, Jeffrey Katzenberg, David Geffen and billionaire Microsoft co-founder Paul Allen, went down two months ago, without launching a single program or film, but burning through millions of dollars.

``It isn't a good time to be in the content field these days,'' says Michael Stroud, a writer for the Wired News online service who also runs the iHollywood Forum, a monthly panel featuring tech-oriented entertainment specialists.

Even the ones making a living, more or less, online are wondering what they can do to compete with Hollywood. ``It's a difficult time for our whole industry right now,'' said Heather Redman of Atom Films, one of the premier online entertainment sites.

Stroud tells the story of a panel where an audience member who worked for a entertainment Web site asked a speaker, a big studio executive, why the studio wasn't investing in his company.

His reply, says Stroud, was: ``If you're a hit, I can buy you. Maybe I'll pay twice as much as I could have otherwise, but I've already got all the money I need. And if you fail, what have I lost?''

Meanwhile, while the virtual stage may be years away, a Hollywood akin to its golden days may be possible. The majority of North America's movie and TV actors and directors still live in Southern California.

``(Right now), an entire lifestyle is built around gathering your possessions and leaving town,'' Korris says about shooting on location. ``It is very possible that this will revert to the old style of working where you go to a lot and put in a day's work and then go home.''

Staff Writer David Bloom contributed to this story.