FIRST IT WAS digital TV. Then it was high-definition. Now, technology makers are watching to see if 3D TV catches on.

While the manufacturing side seems primed for the development—at the Consumer Electronics Show earlier this month, six big makers introduced 3D models—smaller production companies that create content are holding back. Scott Fry is the founder of Radical Axis, an animation and design studio in Atlanta that makes series, including Turner Broadcasting’s "Squidbillies" and "Aqua Teen Hunger Force." Having already spent nearly $100,000  to accommodate the switch to high-definition television—and with 2009 revenues down from 2008—Fry isn’t eager to shell out more on a trend that may peter out quickly.

SmartMoney asked Fry about the ups and downs of running his 10-year-old studio. Here are his condensed answers.

How did you get into this business?

I went to film school at the Art Center College of Design in Los Angeles. My goal was to produce feature film work, but somehow I ended up writing and producing advertisements for an ad agency. There, I taught myself Photoshop so I could create my own layouts. That led me to commercials, which then led me to do promotional work for Country Music Television and "Aqua Teen Hunger Force" at Adult Swim, Turner Broadcasting’s adult-oriented cable television network. Fortunately, "Aqua Teen Hunger Force" turned into something of a cult hit. From there, the projects kept coming in.

In 10 years of running Radical Axis, how have technological advances changed your business?

We’ve seen a transition from animating on paper with pens and pencils to using interactive pens applied directly onto liquid crystal display, or LCD, monitors. We can literally draw right there on the frame and test our animation instantly. Basically, these technologies allow us to complete projects quicker and with greater efficiency. With the extra time, we’re able to include more details than before. Here’s an example: We recently produced a square-dancing scene in "Squidbillies." Rather than, cheating and zooming in on some focal point on the dance floor, we were able to keep everyone on the floor in the scene. If you go back to an older "Simpsons" episode -- or even one of our episodes for that matter -- you’ll see much less detail.

While technology can offer great advantages, how does your company handle the investments necessary to purchase new equipment all the time?

While it is painful to look at a row of computers that are purchased and paid for, but waiting to be disposed of, things change and you have to continue marching forward. Our investment is high now because the software and hardware we use is expensive. But the big expense for us came when we made the feature film for "Aqua Teen Hunger Force." Before we started, we made a six-figure investment in upgrading our systems to high definition. But that was a one-time thing. As far as making other technology upgrades, I generally wait until a job or project comes through before taking on the expense. For me to invest in an area that no one is asking about -- or that I can’t pay off with actual income -- would take away from other areas.

Speaking of technological advances, everyone is talking about 3D TV and films like "Avatar." Are you concerned about being pressured to start producing 3D content?

You can spin 3D in two different directions. First, you can produce a film on a 3D-compatible computer. For example, "Monsters, Inc." and "Toy Story" were shot this way. Or, you can produce images using stereoscopic technology. We have stayed away from the latter, as it is really expensive. However, if more of our clients start demanding it, we’ll try to figure it out.

How do you handle the constant need to expand and contract as projects come and go?

One of the big things I’ve found to be helpful is being able to manage expectations. We try to let people know early on what the time frames for projects are and when the work is available. We try not to promise people too much. After all, anything can and does happen in this business. You think a show will get picked up and it doesn’t; you think you’ll be on the job and you’re not. We try to be as upfront as we can about it.

The other thing is managing cash flow. I operate on somewhat of a cash basis. When I don’t have the money, I’m not going to upgrade. Being conservative, allows me to retain my staff through rough patches. If we get a job, I can always go out and buy new equipment but I can’t find new people.

What is your best advice for fledgling film makers and studio owners?

Hire the right people. When the people are committed to doing good work and getting things done, you can’t go wrong.


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