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EDS

Electronic Data Systems Corp., the information technology giant formed by Ross Perot and later aquired by General Motors Corp., is going Hollywood and doing it with big-money investments that are turning heads even in freespending Tinseltown.

Two and a half years after entering L.A.’s post production market by acquiring Varitel Video in January 1995, EDS has built what was formerly a mid-sized film-to-video transfer operation into the world’s biggest digital film restoration facility.

This spring, EDS Digital Studios spent $12 million to buy eight high-resolution drawing pads and monitors, known as Quantel Dominos, which are used for film restoration, compositing and the creation of digital special effects. It was one of the largest single purchases of this equipment there are only 15 of these state-of-the-art computer systems on the West Coast, eight of them at EDS Digital.

Doing things big is relatively easy for EDS Digital because its parent company, Electronic Data Systems, is huge. With 1996 revenues of $14.4 billion, EDS has a way of shaping and remolding any business into whatever it wants it to be.

“EDS’ mission in life is to take a look at any business, like Hollywood, and say, ‘We could do this. We could make it faster, better and cheaper,’ ” said Martin Greenwald, president and chief executive at Image Entertainment Inc., the nation’s largest laserdisc distributor and an EDS Digital customer. “EDS supplies Hollywood with tools to make stuff better … they’re the perfect marriage to Hollywood.”

The EDS resume is impressive enough. Over 70 percent of U.S. automated teller machines are made by EDS, making it the nation’s leading designer and supplier. It also is one of the leading contractors for designing and providing complex computer network systems for government offices.

As Hollywood’s demand grew for computer and digital effects, EDS executives began to take notice, according to Greg Granello, president and chief executive of EDS Digital Studios.

“We got real excited as the industry became more and more digital,” said Granello. “We know how to do that it plays to our strength.”

The first thing EDS executives did, said Granello, was look at Varitel Video’s post-production operation and explore ways to improve its services.

“The business wasn’t what we wanted it to be,” said Granello. The next step has been to “grow the traditional business, editorial, graphics … then launch new businesses.”

Though Granello would not disclose how much money has been invested into the studio facility by its parent, EDS Digital has added about 50 new employees, growing from Varitel’s staff of 115 to about 160. And then, of course, was the purchase of the Dominos.

Granello wouldn’t say whether all this new staffing and equipment has garnered new clients. But he did note that EDS Digital is working with one major studio (Granello called it “The Magic Studio,” possibly a veiled reference to Walt Disney Co.).

“Our plan is to launch more lines of business,” said Granello. “What we’re looking for is someone to give us multiple projects.”

EDS Digital recently began offering several of its own inventions, one of which is called “Post Paint,” a patented application that reduces an animation problem known as “paint crawling.”

Paint crawling happens when restoring animated films that are more than 20 years old. Since each cell is individually painted, the paint on individual frames tends to smear. “Post Paint” makes the film look as if it were newly painted, according to Granello.

Another EDS-patented process is “Post Camera,” which simulates a camera move after film has been shot.

“If a director looks at a shot and says, ‘This is not what I wanted. I should have zoomed, panned off’… we put it in for them,” Granello said.

Another technique now being developed by EDS Digital is called “Post Rez,” which improves film resolution and produces a sharpness to the picture.

“This is our stuff,” said Granello, who was brought over from the company’s Dallas headquarters in May 1996. “It’s going to be really hard for our competitors. EDS has been doing (computer) technology for 30 years. It’s not easy to compete with us.”

Five more inventions are in the works and are expected to be running in early 1998. An additional 12 employees will be hired to oversee the new services, according to Granello.

“Anything we want to do, we’ll do.” said Granello. “We’re looking for big-time opportunities.”

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