HP does lunch with DreamWorks, Warner Bros.

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The deals are HP's latest steps in digital entertainment and utility computing--two areas that have played an ever larger role in the company's direction.

DreamWorks already uses HP servers, but under the expanded partnership, the computer maker will rent additional computing power to the studio by way of an offering called the Utility Rendering Service, which HP said will let DreamWorks animators create more lifelike characters and scenery for the upcoming "Shrek 2."

In utility computing, a company pays to use someone else's computing power as it's needed, rather than purchasing and operating its own computers. Animation is a vastly simpler task than some that HP and others expect utility computing to handle one day.

IBM, which along with Sun Microsystems is among HP's utility computing rivals, has been renting out its computing power for more than a year to customers including those in the oil and gas industry.

In the Warner Bros. deal, HP plans to create a digital studio for postproduction tasks such as editing and sound mixing, to cooperate on legislation governing content distribution that balances consumer convenience against the rights of copyright holders, and to help the studio digitally restore its movies and television shows.

With its digital entertainment strategy, HP hopes to customize products and services for the industry and create new services and devices for such areas as color correction or digital editing. On the consumer side, HP plans new services and hardware around digital entertainment.

"It's not just about selling more products and services, but about creating a new market for the company," said Felice Swapp, director of HP's strategic initiatives.

DreamWorks had 1,000 dual-processor servers in its "render farm," the collection of computers that add image detail to skeletal constructs one movie frame at a time. The HP utility computing service provides access to another 500 systems, said Andy Hendrickson, head of animation technology for PDI/DreamWorks.

As a result, DreamWorks is able to create more lifelike skin on the characters in "Shrek 2," as well as enhance each petal on a flower or leaf on a tree, Hendrickson said.

"Rendering involves an enormous amount of calculations in a computer. And that requires an enormous amount of horsepower to make these scenes in a picture," Hendrickson said. "There are a number of shortcuts people use, but having more horsepower through HP's utility rendering service allows us to get closer to realism without having to carry more computers on our (financial) books."

HP and DreamWorks cooperated for the original "Shrek", in 2001.

HP sees three types of tasks as amenable to utility computing: those that involve heavy processing; large amounts of data; or complicated work-flow, in which one event triggers a cascade of other events, said Rich Friedrich, head of HP Labs' Internet Systems and Storage Lab.

"We thought 'Shrek' would be in the processing category. But we found the movie had lots of data in it, too," he said. "'Shrek 2' is the most complex, sophisticated utility computing we have done so far."

CNET News.com's Stephen Shankland contributed to this report.