Legend Has It—An Early Lead in the Post-Avatar Rush to Convert 2D Films to 3D

5/18/10Follow @bvbigelow

Barry Sandrew, who was once a staff neuroscientist at the Harvard Medical School, now presides over one of the fastest-growing companies in San Diego—with a business that has nothing to do with medical research.

As a matter of fact, the company known today as Legend 3D no longer resembles the digital colorization studio that Sandrew started here almost nine years ago (with $6 million in venture funding from what is now Boston’s Par Investment Partners). Legend 3D has about 260 employees at its San Diego headquarters, which is 100 more workers than it had here last year, according to Sandrew. And Legend 3D has another 700 employees in Patna, India—and plans to increase that number to 1,200 in coming months.

So what does Legend do now? What began in 2001 as Legend Films, one of Hollywood’s leading technology centers for digital movie colorization, has morphed seemingly overnight into Legend 3D, a fast-growth business that specializes in digital 3D conversion of TV commercials, feature films, and previously released movie titles. Sandrew calls it the “dimensionalization” of cinema, and he says studio demand for the technology is exploding.

The San Diego company completed work for Disney in February on about 25 minutes of 3D footage for Tim Burton’s “Alice in Wonderland,” and is working on three new feature film projects for Dreamworks, along with other major projects. “We have been turning away work,” Sandrew says. “We just don’t have the capacity. But we are moving to have the capacity.”

As anyone who’s been to the Cineplex knows, the reason for the rush to 3D is Avatar—the 3D science fiction epic written and directed by James Cameron. Avatar ranks as the highest grossing film in history, having generated nearly $748.5 million in domestic box office receipts and $2.7 billion worldwide, according to Box Office Mojo.com.

But what Sandrew refers to as a “tsunami” in 3D filmmaking has been building in Hollywood for more than a year. The reason is simple: Every 3D film since the January 2009 release of “My Bloody Valentine” has made more money at the box office than its 2D version. Even “Clash of the Titans,” which had already been completed as a 2D feature film when Warner Bros. ordered a rushed 3D makeover in 10 weeks, proved the new economics of 3D. While the 3D version was shown on only 28 percent of the screens—and at a higher ticket price—it generated 52 percent of the film’s overall revenue.

“Warner Bros. made a mistake with ‘Clash of the Titans,’” Sandrew says. “But they still made a lot of money.” By next year, he estimates there will be 20 to 30 conversion projects underway, transforming existing 2D movies from major studios into 3D versions.

Legend 3D is dividing its operations into three business units to accommodate the demand. One unit will be focused on producing 3D commercials for theaters (and the coming deluge of 3D-capable flat-panel TVs), another will work with major studios on new 3D feature film releases, and a third will work with studios to convert their catalogs of existing titles.

Think 3D versions of “Star Wars,” “The Matrix,” “Lord of the Rings,” “Gladiator,” and “Titanic.”

Legend anticipated the shift years ago, and began investing heavily in 3D conversion technology in 2008, after raising $5 million through a Series E preferred stock offering led by San Francisco-based Augustus Ventures. Legend’s longtime largest shareholder, now known as Par Investment Partners, also participated. “About five years ago, we knew that Avatar was coming out,” Sandrew explains. “We knew what Jim Cameron was doing. We also knew it was going to be a game changer.”

Yet Avatar really was more of a tipping point in a buildup of 3D feature-length films created through a variety of innovations, including advances in stereoscopic 3D cameras and computerized 3D rendering technologies that Sandrew helped invent. He holds 14 patents, mostly related to colorization and visual special effects. Using a frame-by-frame approach similar to colorization, Sandrew says he developed a digital 3D conversion process in 2007 with San Diego-based Passmorelab that makes conventional 2D TV and film appear as if it was originally recorded with stereoscopic 3D cameras.

About 70 percent is the same process as colorization, but 3D is much more complicated and very labor intensive, Sandrew says. “It requires designing special effects for every pixel of every frame,” Sandrew says. “So we’re in a unique position in this space that is rapidly growing.”

Sandrew also has been over this terrain before—not just at Legend Films, but previously with American Film Technologies, which was hired by Ted Turner in 1986 to colorize hundreds of MGM films.

As The Boston Globe told the story four years ago, Sandrew was working at Massachusetts General Hospital in 1986, using color to enhance the diagnostic value of medical imaging, when he was approached by the president and CEO of American Film Technologies (AFT). Sandrew ended his medical career to join AFT. He left about five years later, when AFT was faltering, to co-found Lightspan, one of the nation’s largest computer education companies. But Sandrew returned to colorizing movies when he formed Legend Films with David Martin, a former executive with Hollywood Enterntainment and Jeff Yapp, an MTV executive.

As for the future, Sandrew says the new film projects that Legend 3D has taken on includes one that is expected to be the runaway blockbuster of 2011. Beyond that, though, he’s not talking.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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