Digital Domain

Digital Domain (also known as Digital Domain Media Group or DDMG) is a global visual effects and digital production company headquartered in Playa Vista, Los Angeles, California.

Digital Domain produced effects for more than 500 films, including Dante's Peak, Titanic, Apollo 13, What Dreams May Come, The Fifth Element, Armageddon, Star Trek: Nemesis and The Day After Tomorrow.

The company is known for creating digital imagery for feature films, episodics, advertising and games, and virtual and immersive experiences from its nine locations across North America and Asia in Los Angeles, Vancouver, Montreal, Hyderabad, Luxembourg, Beijing, Shanghai, Shenzhen, and Hong Kong.

History
The company was founded by film director James Cameron, Stan Winston and Scott Ross in 1993. They began producing visual effects in 1993 with its first three films, True Lies, Interview with the Vampire, and Color of Night, being released in 1994.



Early 2000s
In October 2002, Digital Domain launched a wholly owned subsidiary, D2 Software, Inc., to market and distribute its Academy Award-winning compositing software, Nuke.

In 2002–2003, Digital Domain co-produced its first feature film, Secondhand Lions, written and directed by Tim McCanlies and starring Michael Caine, Robert Duvall, Haley Joel Osment, and Kyra Sedgwick.

The founders were known for feuding, principally due to internal conflicts over the film Titanic. Founder Scott Ross announced plans to raise $100 million in financing to become more active as a production company. This plan never materialized, forcing management to seek a buyer of the company.

2006–present
In May 2006, Digital Domain was purchased by an affiliate of Wyndcrest Holdings, LLC, a private holding company. Wyndcrest's principals then included founder John Textor, director Michael Bay, former Microsoft executive Carl Stork and former NFL player and sports television commentator Dan Marino. The buyers purchased the company for an estimated $35 million. Textor and Bay would become co-chairman of Digital Domain and Stork was named CEO.

In 2007, Wyndcrest also acquired The Foundry which was tasked with taking over the development of Nuke. The Foundry was subject to a management buy-out in 2009.

In 2011, Digital Domain Media Group entered into the film production business with a major investment into the feature film Ender's Game, which was a co-production with OddLot Entertainment and Summit Entertainment. The film was released November 1, 2013.

In November 2011, DDMG took the company public through an initial public offering (IPO), and the company was listed on the NYSE under the symbol DDMG, achieving a market valuation of more than $400 million.

In 2012, subsidiary Digital Domain created a virtual likeness of the late rap star Tupac Shakur for Dr. Dre's and Snoop Dogg's show at the Coachella Valley Music and Arts Festival. The performance earned Textor's studio the Titanium Award at the 59th annual Cannes Lions International Festival of Creativity. Digital Domain also announced that the company would create virtual Elvis Presley in partnership with CORE Media Group.

In 2015, the UFC hired Digital Domain to create a commercial series for their UFC 189 event.

In 2016, the Pokémon Company hired Digital Domain to create the visual effects for their "Train On" Super Bowl ad, released to celebrate the Pokémon series' 20th anniversary.

In 2017, Voltron Chronicles, a VR game Digital Domain co-developed with Universal based on Netflix's Voltron Legendary Defender, went live. Fans can play this game on PSVR, Oculus Rift and HTC Vive for $15.

In 2018, Digital Domain celebrated its 25th anniversary while announcing the opening of its second Canadian studio in Montreal, Quebec.

In 2019, Digital Domain Head of Software and virtual avatar DigiDoug presented a talk during TED2019 as the first digital human to give a TED Talk in real-time.

In 2020, Digital Domain introduced Masquerade 2.0, the next iteration of its in-house facial capture system, rebuilt from the ground up to bring feature film-quality characters to next-gen games, episodics and commercials. Masquerade 2.0 uses the same tech that was utilized to create Thanos in Avengers: Infinity War and Avengers: Endgame. The development allows the technology to be applied to smaller projects, bringing the full depth and emotion of an actor’s performance to any screen.

In 2021, Digital Domain utilized its new proprietary face-swapping tool, Charlatan, to create a realistic hologram/digital human combination of Vince Lombardi for Super Bowl LV.

In 2022, Digital Domain announced “Zoey,” the world’s most advanced autonomous virtual human. Powered by machine learning and created using an advanced version of the technology and process that helped bring Thanos to the big screen, the photorealistic Zoey can engage in conversations with multiple participants at once, remember people, access the internet to answer questions and more, paving the way for the next step in the evolution of AI.

Digital Humans Group
The company has a sub-division called New Media Group, which is currently led by Hanno Basse, the Chief Technology Officer. This sub-division provides machine learning-based scanning and digitization services to create immersive experiences for any screen.The process involves two programs called Masquerade and Direct Drive, which use high-resolution scans and motion capture technology. The data generated by these programs can be mapped and animated to create compelling visual experiences.

Financial difficulties
In 2009, Digital Domain parent company DDMG launched Tradition Studios in Florida to develop and produce original, family-oriented CG animated features. The studio moved on January 3, 2012, to a new 115,000 sqft facility in Port St. Lucie, built with the city's incentives. The studio attracted a number of creators, including Aaron Blaise, the director of Brother Bear, and Brad Lewis, co-director of Cars 2, who together were developing an animated feature film The Legend of Tembo for a planned 2014 release.

In November 2011, DDMG completed a successful IPO capital raise for $40 million. Textor's Florida expansion plans did not overcome the continuing negative cash flow of Digital Domain's primary visual effects business. In the summer of 2011, Lydian Private Bank failed. As DDMG's principal lender and major shareholder, this had a major impact during the peak of DDMG's capital consumption. Lydian's sizable stake was sold to a hedge fund affiliated with Florida Power & Light which was then traded to hedge fund and lender Tenor Capital. Tenor Capital engaged in heavy short-selling of DDMG's publicly listed stock as a strategy to pull cash proceeds from the daily trading of DDMG stock.

Once considered critical funding for the future of DDMG, the IPO became the vehicle by which hedge funds could prevent the company from accessing capital while profiting from the decline in DDMG's stock price. Tenor became a stakeholder in DDMG in early May 2012, with DDMG stock price trading at an all-time high, but DDMG would soon be unable to access the cash needed to fund its Venice operations and its Florida studio growth. Documents and emails demonstrate that Digital Domain senior management believed they had options to put cash into the company. However, Tenor Capital had significant weight as a chief lender and, according to Palm Beach Capital and the Tenor strategy, may have been shorting DDMG stock to profit from its failure.

When a deal to fund the company failed on July 31, Tenor Capital cited a violation of a minimum cash covenant and demanded $51 million on August 20 as repayment for its $35 million loan made four months earlier. The lenders appointed Mike Katzenstein as interim chief operating officer of the company who acted without conferring with DDMG senior management, deciding to close the Florida studio, causing Chairman John Textor to submit a letter of resignation "in profound disagreement" with this decision.

On September 7, 2012, it was announced that all of DDMG's Port St. Lucie's operations—including Tradition Studios—were to be shut down, laying off nearly 300 newly trained and recruited employees.

Bankruptcy, Financial Restructuring, and Lawsuits
On September 11, 2012, Digital Domain Media Group Inc. filed for Chapter 11 bankruptcy protection after the company's hedge fund lenders alleged the company defaulted on a minimum cash covenant relating to a $35 million loan. DDMG's lenders proposed a deal to sell its operating businesses–Digital Domain and Mothership—to a private investment firm, Searchlight Capital Partners, for $15 million. At the public auction on September 21, 2012, Digital Domain's visual effects business and its principal animation feature film properties were instead acquired by a joint venture led by a leading DDMG shareholder Beijing Galloping Horse America, LLC in partnership with Reliance MediaWorks (USA) The sale was approved on September 24, 2012.

In July 2013, approximately nine months after Digital Domain filed for bankruptcy, the majority ownership was acquired by Hong Kong listed public company Sun Innovation. This acquisition placed an approximate $3.5 billion valuation on Digital Domain, with Reliance MediaWorks continuing to own the minority stake. Daniel Seah was appointed CEO. Seah spearheaded the bankruptcy acquisition and protection of Digital Domain by DDMG shareholder Beijing Galloping Horse America, LLC.

The bankruptcy and financial restructuring of Digital Domain triggered a number of lawsuits naming John Textor, former Apple CEO John Sculley and the entire Board of Directors, the auditors and others involved in the business and in the IPO offering.

In February 2015, the Supreme Court of New York and the Inspector General of the State of Florida cleared Textor of any financial wrongdoing, and The Athletic reported that he had received a settlement from the hedge fund that caused the collapse.

Palm Beach Capital, the largest investor in DDMG, identified hedge funds, Tenor Capital et al., as the primary cause of the company's difficulties. Palm Beach Capital cited unlawful finance penalties and possible illegal short selling strategies designed to damage the company's public stock price. Ultimately, the hedge fund lenders agreed to settle outstanding claims by the DDMG parties through a May 2016 settlement agreement awarding $8.5 million to former CEO John Textor and $3 million each to the city of Port Saint Lucie and the state of Florida. The settlement also assigned all technology assets of Digital Domain's Florida studio.

Film
Digital Domain has also earned multiple British Academy (BAFTA) Awards for excellence in digital imagery and animation.

Awards
Digital Domain artists and technologists have been recognized with ten Academy Awards: three for Best Visual Effects (Titanic, What Dreams May Come, The Curious Case of Benjamin Button); and seven for Scientific and Technical Achievement for its proprietary technology such as Track (tracking software), for Nuke (compositing software), for Storm (volumetric renderer), and for its fluid simulation system.

The company's work has been nominated for eleven Academy Awards for Best Visual Effects (Apollo 13, True Lies, I, Robot, Real Steel,Transformers: Dark of the Moon, Iron Man 3, X-Men: Days of Future Past, Avengers: Infinity War, Ready Player One,Spider-Man: No Way Home, and Free Guy). In addition, its excellence in digital imagery and animation has earned Digital Domain multiple British Academy (BAFTA) Awards.

Digital Domain's advertising division provides digital imagery and animation for television commercials, working with top commercial directors. To date, it has been awarded 21 Clio Awards, 25 AICP Awards, 15 Cannes Lion Awards and numerous other advertising honors. The advertising division has also produced multiple music videos working with artists (including The Rolling Stones, Faith Hill, Creed, Janet Jackson, Busta Rhymes, Björk, Celine Dion, Michael Jackson and Nine Inch Nails) which have earned Grammy and MTV "Music Video of the Year" Awards.