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DMN: Since Autodesk, the big company, is behind you, that gives you a little more leeway than some of these smaller companies.
Lypaczewski: It's a wonderful thing to be part of the world's sixth largest PC software company, and have the resources and infrastructure behind that. All that being said, we run Discreet as a whole division, and are insuring that Discreet, in and of itself, is a healthy company.
DMN: Are you looking toward intensifying your focus on desktop products like Combustion? It looks like you're pushing toward that direction to increase revenues.
Lypaczewski: Oh, very much so. The desktop is an important part of our future. As I alluded to before, while the strength on the desktop is reducing the growth curve on the high end (which is still a healthy business and one that we're absolutely committed to), there's a huge opportunity for us on the desktop, too, and something that we intend to pursue aggressively.
DMN: So are you going to keep the team in San Francisco intact, for now at least?
Lypaczewski: The problem of not saying anything specific is you can read too much into it (laughs). It's just a matter of my ability to predict the future, Charlie -- it's somewhat flawed. But as I did say, we are continuing to look for efficiencies across the whole organization, and just making sure we're properly configured.
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DMN: In this market, as you said, everyone is suffering here. Can you give me an idea how much worse your products are selling than a year ago? Is this a disastrous market? Are you selling, like, half as many? Can you give us an idea of that? How bad is it?
Lypaczewski: It's really bad. It's as ugly an economy as this market has seen. But that being said, I don't have the quarterlies with me right now, the quarter-over-quarter comparisons are something we can easily get to you because we do announce our top line as part of the Autodesk results.. There has been a reduction in our revenues -- but it's not down a half.
DMN: Why are things looking so bleak for the high end effects market? Could one of the reasons be because of September 11th, the content of motion pictures has changed quite a bit, where explosions and special effects are not quite as big as they used to be? Do you see this as being one of the reasons for the slowdown in the high end effects market?
Lypaczewski: No, I don't think so, to be honest. One interesting aspect that goes back to last year was the state of "reality television" that we're watching. It's no coincidence that in the days when there was the potential for a strike for both the Screen Actors and Screen Writer's Guilds, that the networks embraced a lot of programming which didn't require actors or writers. And certainly those have different production values and have had some ripple-down effect into our industry. But when you look at effects films, almost every film is an effects film at this point. It's interesting. At one of our accounts, they were working on what ostensibly looked like a classical film, it was centered around wartime Warsaw. So you wouldn't think of that as a big effects film. But the fact of the matter is, they had to take out the satellite dishes, they had to add a little bit of battle damage, they had to put some smoke on the horizon. So yes, the overt effects may not be as prevalent as was the case before. Even so, the need for effects really speaks to the efficiencies that our customers enjoy. It finds its way into almost every production.
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