Kerner Tech Ready for Revolution

Despite a contracting marketplace, Kerner Technologies CEO Thomas Randolph is lining up partners all over Hollywood for a revolution in imaging. Armed with a laptop and software called "Phloto," Randolph has begun making licensing agreements with entertainment companies for a patented technology that turns still photos into moving images.

Kerner has already struck licensing deals for Phloto with Marvel and Fuji Film, among others, and more entertainment companies are pursuing it with an eye toward making video production cheaper and easier. Phloto fills the gaps between still images to create full-motion video. Unlike other "keyframe animation" software, it creates that video instantly, so it can be used for Web streaming.

"With Phloto," said Randolph, "user-generated video content can be created solely using photos, which go like butter through the Web because they require relatively no bandwidth."

Phloto video can also be made 3-D with the touch of a button, so Phloto expects to be the first home software for stereoscopic user-generated video. Phloto is based on FrameFree, a high-tech imaging system Randolph brought to Kerner when he joined the company. FrameFree records pictures as math instead of video frames.

Randolph unveiled FrameFree earlier this fall with a Marvel Studios licensing deal tied to the DVD release of The Incredible Hulk. Fans could upload their own photos to Marvel's website and watch their own face morph into the Hulk. Now Marvel and Randolph are discussing other uses for the technology. Marvel Studios marketing and distribution consultant Tom Sherak said, "This is in its infancy, but it has the potential to change a lot of things.

"Marvel has 5,000 comic titles that are stagnant on the page, and (Randolph) came to me and said, 'What if I told you I could make these comics move, and that what it takes animators years to do, I can do in a matter of seconds, at negligible cost?' "

Though Randolph wouldn't name specific deal partners until pacts close, he said he is in "exclusive negotiations" with a major music label that wants its developing musical acts to use Phloto to make videos very inexpensively, using a still photographer instead of a film crew.

One deal in the works is with a major sports league to exploit its archive of photographs; another is with a social-networking site that would allow users to design sophisticated presentations of photos.

And after making a deal with the Tokyo-based CelSys Animation, Randolph is in discussions with Hollywood animation companies. Randolph said CelSys found it a big time-saver. "Instead of hand-drawing every frame, you push a button, and it quickly draws 60 frames."

The FrameFree/Phloto software family has become a top priority for Kerner, which began as the physical effects division and operating stages that George Lucas spun off from Industrial Light & Magic in 2006. Despite the global economic downturn, Randolph has, in recent months, struck deals including strategic investments from Taiwan-based Wistron Corp., which supplies PC motherboards for Acer and Dell, and from Kevin Duncan of Duncan Oil. Three Japanese companies, Toppan Printing, CelSys and Fuji Film, have struck Phloto deals. Computer-maker Acer has pacted for it, and Randolph said he is negotiating with one of the largest computer-makers to bundle Phloto with its PCs. The first pacts are expected to be done by year's end or early 2009.

Sherak said, "I worked on Beowulf, watched Bob Zemeckis take things to the next level by solving the problem of not having the character's eyes move. This does something similar, and it can be a game-changer in our business."

By Michael Fleming and Davis S. Cohen, Variety