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VIEWPOINT'S COOL DIGITAL LIBRARY NEED A SPACESHIP?
By ED BROWN

(FORTUNE Magazine) – Remember that scene in the movie Independence Day where aliens come to earth in spaceships and blow up the White House? Those spaceships weren't built in another galaxy, or even in Hollywood. They were built in Orem, Utah, on the computers of a small company called Viewpoint Datalabs.

Viewpoint has only 90 employees, but their work is everywhere. The company has developed a digital library of 3-D models of people, places, and things, and sells them to movie and TV studios, videogame programmers, Website builders--any digital-content creators that use 3-D images.

It works like this: Say you're the producer of Independence Day and you need some computer-generated spaceships. Instead of spending the time and money to build them from scratch, you browse through the Viewpoint library on the Web (www.viewpoint.com), which contains about 5,000 skeletal 3-D models of everything from a grasshopper to a totem pole to an anatomically correct, obese, nude woman. After you find the right spaceship image, you click your mouse and order it. (If you can't find what you want, Viewpoint will make it for you.) It's up to your special-effects crew to customize its appearance and make it fly around, but you've still saved your team valuable time. In a way, these models are the prefab building components for the digital age: They don't finish the job for you, but they eliminate a lot of grunt work.

Viewpoint's past-and-present clientele includes CNN (which used Viewpoint's model of a Boeing 747 on the day of the TWA flight 800 crash), Sony, and Electronic Arts. Most important, the company has formed a strategic alliance with Microsoft, which is now distributing a portion of Viewpoint's library to its software developers. Discussions are currently under way for similar initiatives with Netscape, Apple, and Silicon graphics.

The eight-year-old company's 1996 revenues were small: $7.5 million. But its goal, according to CEO Martin Plaehn, is ambitious: to create a digital library so comprehensive that every special-effects whiz, videogame programmer, and website creator on the planet would prefer to buy a model from Viewpoint rather than construct one themselves.

This won't happen before Viewpoint figures out a solution to a basic problem: piracy. Piracy plagues all digital content providers, and it's especially threatening to a tiny company like Viewpoint that sells a product that is especially easy to pirate. There's no telling how much revenue will be left on the table if and when people find ways around paying $795 for a model of, say, a praying mantis.

So far, Viewpoint's efforts haven't amounted to much profitwise: It managed a grand total of $100,000 in the second half of 1996--its first profitable half ever. Plaehn acknowledges the risks to his company and its lack of profitability; he's also coy about plans to take Viewpoint public, only saying it's "an option." The company's strategy for now is expanding the business. "If we hold back, we'll have no market share, no visibility, and no revenue," he says. "I'd rather get the revenue that can be captured now."

--Ed Brown