VR PLAY CAME AT THE PERFECT TIME
Montreal has long been a hub for creative innovators, entrepreneurs and artists. In this column, Brendan Kelly offers a snapshot of individuals pushing the boundaries of their field, looking at how they’ve managed their relationship with money in order to “make it” in their chosen domain. Name: Stéphane Rituit Occupation: Co-founder and CEO of Felix & Paul Studios Length of career: 16 years in the film and virtual-reality business Savings: None. Assets: A duplex in Hochelaga-Maisonneuve bought 12 years ago, which was remortgaged to finance the founding of Felix & Paul Studios. Two motorcycles, one built by Samuel Guertin from Montreal custom motorcycles outfit Clockwork Motorcycles, and a 2006 Ducati Monster. He leases a 2017 Hyundai Elantra.
SEED MONEY
Stéphane Rituit began his career working as an accountant for a boutique accounting firm in Paris and then at 25 years old he met a woman from Quebec, she became pregnant and they decided to move here. He began doing accounting for small grassroots community groups. “I decided to not wear a tie any more,” Rituit said in a recent interview at the bustling headquarters of Felix & Paul Studios in Old Montreal. “I was making less money, but I was in Montreal in 2000. I had a huge apartment (in Hochelaga-Maisonneuve) and I was paying the same rent as I would’ve been in Paris for a tiny apartment. To me it was paradise. I was like, ‘I can work less. I can work in an environment that doesn’t pay much, but they’re trying to do something good in life and I can spend more time with my son.’” He ended up working as a bookkeeper/accountant at the community radio station CKUT.
THE STEADY PAYCHEQUE
Then in 2002, he met film producer Norman Cohen, whose production company Isuma Igloolik Productions had just made the award-winning Inuit feature Atanarjuat: The Fast Runner. Rituit got a job as Isuma’s bookkeeper and soon enough Rituit was working as a producer making films in Nunavik. It was tough raising financing because Cohen and his partner, filmmaker Zacharias Kunuk, were raising money to “create cultural content for the Inuit people, so you have to be creative.” He remained with Isuma until 2013 when he moved on to startup Felix & Paul Studios.
THE BIG PAYOFF
Early on at Isuma, a young man named Félix Lajeunesse walked into their offices and said he wanted to work with them because he loved Atanarjuat. Lajeunesse was cameraman and editor on many of their films. At the same time, Lajeunesse was working on a bunch of projects with Paul Raphaël, notably music videoclips, TV commercials and immersive installations. Lejeunesse, Raphaël and Rituit first worked together on the 2009 animated short Tunijuq, featuring Inuit throat singer Tanya Tagaq. Then they made a 3D documentary about a young Inuit boy in the Arctic. It was all about pushing beyond the limits of old-school film and TV. That led directly to the creation of Felix & Paul Studios, an outfit devoted to making virtual-reality content, a business in its infancy at the time. One of the challenges was that they had to finance the projects and the technology necessary to make the VR projects. In 2013, Raphaël got his hands on one of the first Oculus Rift VR headsets and he told his two partners: “We’ve just found our home. This is what we’ve been trying to do.”
STARTUP
Rituit quit Isuma and all three Felix & Paul founders remortgaged their homes and started this VR company with their own money. They also worked for the first full year with no salary in order to finance the startup of the company. He figures the three put in about $200,000 of their own money. At the time there were no VR cameras to shoot 3D in 360-degree environments, so they had to build them. In 2014, a year after its founding, Felix & Paul got its first major outside financial aid from Montreal cultural philanthropist Phoebe Greenberg, the woman behind the Phi Centre. She remains a minority stakeholder of Felix & Paul Studios. The company has also gone through two rounds of financing since then, in 2016 and 2017. It has raised millions from a number of prominent investors, including Comcast Ventures — which owns NBC Universal — and the Caisse de dépôt et placement du Québec. “We did the first VR movie ever, Strangers, with Patrick Watson,” Rituit said. “There was no market, no model. VR was just used by the military and some academics. There was no industry.” But the arrival of Oculus changed all that. Suddenly it was a big business, with Facebook buying Oculus for $2 billion in 2014. “When we showed Strangers to the team at Oculus, it simply blew their minds,” Rituit said. “They knew there was some kind of cinematic VR that could happen at some point, but they never thought there were people already thinking about it who could create something that strong that early.” Felix & Paul began developing relationships with Hollywood studios and in 2014 they did a VR short tied to Jean-Marc Vallée’s film Wild. Then Oculus gave them $800,000 to finance a two-minute piece Introduction to VR designed to be used with their headsets. Then Oculus entered into an agreement with Felix & Paul, the idea being that the Montreal studio would come up with more cinematic VR content for them. The first result of that was the documentary series Nomads. Since then, Felix & Paul have done VR projects featuring the Cirque du Soleil, Bill Clinton, Barack Obama and LeBron James, and a show tied to the Jurrasic World film. The companies that develop the VR headsets — like Oculus, Google, PlayStation VR and HDT VR — go to companies like Felix & Paul for content. “We own the intellectual property and that’s the base of our studio,” Rituit said. “It’s a catalogue of intellectual property.” But they also keep ownership of the technology they’ve created along the way. Rituit says there are probably 20 million headsets out there, so clearly there is huge potential. “We’re in an industry that’s strong, but it’s growing slowly,” Rituit said. “We’re still an industry that’s trying to figure out its own market, and that’s normal.” Felix & Paul has 55 full-time staffers, but it’s not yet a profitable company. That said, most of their individual projects are profitable, but the profits are funnelled into development. Now, of course, they’re receiving paycheques, but they’re not making a fortune personally. Yet. “We think we’re at the right place at the right moment,” Rituit said. “We’re early enough but not too early.”