Insights
Pandemic Pivots: A Hollywood Ending for THE THIRD FLOOR
By Daisy Lin
The plot twists that kept entertainment company THE THIRD FLOOR running on all cylinders during the COVID-19 shutdown
As a visualization studio for major Hollywood productions, THE THIRD FLOOR (TTF) has created animated blueprints and mapped out many disaster and fight scenes for film and TV, including sequences in “Avengers: Endgame” and “Game of Thrones.” They never expected, however, to find themselves in the crosshairs of a real-life disaster like the COVID-19 pandemic.
This is the story of how TTF dealt with one crisis after another as the situation unfolded, by responding quickly and working with partners. As a result, they were able to supercharge their workflow, keep people employed and discover new opportunities, just in the nick of time.
“I feel like everyone was growing together,” says TTF CEO and co-founder, Chris Edwards. “It was almost like a ‘Band of Brothers’ episode.”
The canary in the coal mine
In January, THE THIRD FLOOR, which is headquartered in Los Angeles, was preparing to open their new studio in Beijing, a project 10 years in the making. They had planned the big launch party during the Beijing International Film Festival when they got word that the entire event had been postponed indefinitely.
“That was the first canary in the coal mine; that’s when we knew,” Edwards says.
Their Beijing colleagues urged them to take the virus seriously and were updating them on the scale of the crisis. “They were giving us advice on what to do and what not to do,” he says.
TTF management shifted into high gear immediately and began preparations at their offices around the world, telling staff and clients to prepare for the worst.
“Lo and behold, the worst happened, and we were ready for it,” Edwards says.
Cue “Mission: Impossible” music
Shifting an entire company to remote work at lightning speed when you need to safeguard projects requiring extremely high bandwidth and the utmost secrecy was a daunting task.
“We are sitting on over 40 to 50 projects that are awarded to us by Hollywood studios,” Edwards says. “Who are the next superheroes? What is the next plot in your favorite television series? All of that goes through our studios. And we need to be extra secure with that data. We're also manipulating real-time computer graphics, so we need very fast computer systems.”
TTF’s IT team was in the process of obtaining Tier One security certification, which verifies utilization of the highest government-level security protocols. Developers were working on centralizing the company workflow and expanding the internet pipeline by migrating to data centers, which have more advanced capabilities over server deployments. The upgrade required a sophisticated new switch and an array of networking equipment. Normally, it takes months to perform this task, but when Los Angeles Mayor Eric Garcetti issued the stay-at-home order on March 19, TTF had to finish the job in a single weekend.
The IT team rushed to the One Wilshire building, which hosts one of the most densely interconnected data center hubs in the world. “It was like a ‘Mission: Impossible’ scheme. You know, where Tom Cruise dives into the server room with all the lasers,” Edwards describes.
The crew worked around the clock to install all the needed equipment. By the time they were done, TTF went from a 1-gigabit to 10-gigabit internet connection, and on Monday all of their artists were able to log in to the high-bandwidth connection and access studio assets.
PPP power to the people
Then, all of Hollywood went dark. Productions were shuttered, setting off a ripple effect across the entire industry. Besides talent, crew, writers and producers, there were the vendors, costume and equipment rental houses, caterers and housekeeping staff who all lost jobs. The International Alliance of Theatrical Stage Employees, which represents about 145,000 behind-the-scenes workers, reported that more than 90 percent of its members lost their jobs.
TTF Chief Financial Officer Paul Westphal watched the fallout with apprehension. “When the stay-at-home order occurred and Hollywood stopped production, that’s when our work slowed down dramatically. Our billable artist headcount went down two-thirds—that’s about a hundred people.”
Knowing that would mean layoffs, the finance team reached out to their relationship managers at East West Bank. Arde Sahraeean, vice president and New Media portfolio officer, and Sonny Gulati, first vice president of the New Media team, were following the rapidly evolving news developments closely, along with the rest of the bank staff. As soon as the draft application forms for the Paycheck Protection Program (PPP) became available online in late March, TTF began working on it.
The guidance for businesses was very complex and changed daily. What followed was a whirlwind week in which both teams were in constant touch back and forth, scrambling to gather the myriad documentation needed as new requirements were being announced by the SBA.
“We were getting updates every few hours and asking what can we do to move this application forward to the finish line,” Sahraeean recalls.
Throughout the bank, people were working around the clock. “It didn’t matter if it was 6 in the morning or past midnight. There was a lot of collaboration and not a lot of sleep,” Sahraeean says. “There was this responsibility we felt to help out, so that families won't have to worry about rent or food for the next couple months.”
As soon as PPP opened on Friday, April 3, the bank submitted TTF’s completed application package to the SBA. On Saturday night, the bank sent the loan note to TTF for signature. By Sunday morning, TTF sent the note back, and by 5 p.m. that same day, the loan was funded.
“The fact that East West could process this loan so quickly completely blew us away,” Westphal says.
That Monday, instead of announcing layoffs, Edwards was able to announce the loan funding and keep employees on payroll.
“People were on the verge of tears, saying that this is going to make a big difference,” Edwards says. “For us, it was like the evolving plot of a Hollywood movie, just in our darkest hour when we were thinking all hope could be lost, East West swooped in, and along with our finance team, surprised us with the loan, and the timing couldn’t have been more perfect.“
“For us it was like the evolving plot of a Hollywood movie, just in our darkest hour when we were thinking all hope could be lost, East West swooped in, and along with our finance team, surprised us with the loan, and the timing couldn’t have been more perfect.”
The road ahead
Now that the technology and financing are in place, TTF staff are using this time to work on a post-pandemic business plan and prepare for the future by working on internal strategic projects and improving their library of tools.
“This actually opens up opportunities for us to add services and different types of revenue-generating activities to our business that we would have never been prepared to unveil quite so soon,” Edwards says. “The whole crisis may actually inadvertently draw more attention to the need to plan, and planning is all you can do right now.”
Edwards also thinks the rising comfort level with remote work within the entertainment industry is a trend that will outlast the pandemic: “It opens up all kinds of cross-collaborating possibilities and will allow us to add international talent to our team as needed and contribute to ongoing projects in a secure way.”
As badly as the entertainment industry has been hit, ultimately Edwards has faith that the industry will get back on its feet. “Hollywood is used to adversity,” he says. “You have to be nimble and to adapt.”