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Rhythm & Hues Malaysia to fly solo under new identity

Gabey GohMay 23, 2013
  • R&H Malaysia now independent following rescue of US ops from bankruptcy
  • Company to undergo a name change, moving forward in IP creation too

THE Malaysian unit of visual effects studio Rhythm & Hues (R&H) now stands alone, following the company’s acquisition in the United States by competitor Prana Studios Inc via affiliate 34x118 Holdings Inc.
 
R&H had filed for bankruptcy protection in February, laying off 250 people to buy it time to restructure its struggling business in the hopes of getting a buyer. The news broke amidst the buzz surrounding the studio's Academy Award win for Best Visual Effects on Ang Lee's Life of Pi.
 
According to a Wall Street Journal report, 34x118 Holdings emerged the winner in a bankruptcy auction held at the end of March. The winning bid included US$1.2 million in cash and the assumption of up to US$17 million in debt.
 
In an interview with Digital News Asia (DNA), Hasnul Hadi Samsudin (pic), senior manager of R&H Malaysia, said that the move to become independent was due to the fact that the assets purchase of R&H did not include the Malaysian facilities as part of the deal.
 
“The Malaysian operations was a separate legal entity owned by the same owners of the R&H US group -- John Hughes, Pauline Tso and Keith Goldfarb," he said. "R&H Malaysia was not a subsidiary of R&H US and therefore not part of the asset sale.” 

Hasnul added that the local team is in the midst of becoming an independent studio doing work out of Malaysia, continuing the same high quality work that has been expected of the US studio.
 
“We will be going through a name change soon as part of the asset sale was also the brand and trademark of R&H. Also, what’s next is to be out there in the market to be able to both service the computer-generated imagery (CGI) services market and to also look at the possibility of creating our own intellectual properties in animation and film,” he said.
 
When asked whether there will be any changes to management or headcount, Hasnul said that at the moment there are no major changes. “But because of our downtime and lack of work, we are have worked with our artists to see how we can contain our costs,” he added.
 
However, given the difficulty for US-based visual effects studios to attain long-term sustainability, the question was posed to Hasnul about he and his team’s chances of survival.
 
He explained that previously for R&H, the US operations were sustainable because of the addition of Asian offices in Mumbai, Hyderabad and Malaysia. The Asian offices were able to substantially lower the costs of doing the same high-level quality of work to normalise the cost of doing business in the VFX market.
 
“Therefore, going forward, we would still maintain the same level of quality of work at competitive costs -- what we are building now is the business development capabilities of our current team so that we can participate in the services market as soon as we can. We are already reaching out to various studios to work on projects as and when they are available,” he said.
 
Hasnul shared that the company is currently open to any sort of possibilities of investment and collaboration and has been talking to several parties in its exploration of a path forward.
 
On behalf of his team, he also expressed “utmost gratitude” to R&H US for all the support that has been provided in building up the team in Kuala Lumpur, foreseeing plenty of synergies with the US team under its new owners moving forward.
 
Hasnul added that the Multimedia Development Corporation (MDeC) has also been very supportive as the Malaysian team makes its next move.
 
“We are still sustainable for the moment and MDeC is trying its level best to see this through,” he said.
 

Related stories:

All good at Rhythm & Hues Cyberjaya … for now

Creative content industry: Where the real value lies

Disrupt: Malaysia’s creative content industry missing key pieces
 

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