Michael Jackson can’t get a break from the business, not even in death.

The King of Pop fatally overdosed at the age of 50 five years ago, but last month he moonwalked back from the dead and digitally rocked the Billboard Music Awards in Las Vegas.

For four minutes, Jackson danced on stage in a bejeweled military jacket and tight red pants. Flanked by blasts of fire and both real and synthetic backup dancers, he pumped out his signature moves -- clutching his crotch and balancing on the tips of his toes.

Related: Jackson Industry Can't Get Enough

But it wasn’t really Jackson. And it wasn’t a 3-D hologram, even if dozens of media outlets were quick to incorrectly report it that way.

The ghostly thriller that bewitched 11.5 million viewers was the product of a 150-year-old optical illusion called Pepper’s Ghost, a campy light-and-mirror trick that Disney has used to dupe Haunted Mansion visitors since 1969. The digital portion of the illusion took 30 weeks, 35 animators, two 8K cameras, and millions of dollars to orchestrate. Live pyrotechnics, real musicians and dancers, and an intricate lighting setup completed the 40-foot-stage sized trompe l'oeil.

The complexity of the technology, though, is nothing compared with the complexity of the industry behind it. There are several reasons dead celebrity – known in the business as “delebrity” – clones don't emerge more often, including a tangle of nasty legal battles and tremendous costs.

Related: CrowdRise, Ed Norton's Charitable Social Network, Raises $23 Million

But if the industry overcomes its hurdles, insiders say digital clones could someday prove useful in places far beyond Hollywood: They could become part of everyday life.

An intellectual property quagmire

Pulse Evolution Corporation, a Port St. Lucie, Fla.-based digital human animation and production startup launched last October, says it definitively owns the bragging rights to Jackson’s blowout Billboard resurrection.

But according to this glaringly false CNN report that aired in May and was later removed, British billionaire Alki David and his Beverly Hills-based Hologram USA were behind the Billboard show.

As the confusion suggests, there is a dispute over the underlying technology. Actually,  “dispute” may be too mild a term. In the visual effects industry, there's an all-out war over who owns the rights to what.

Related: What Does Kevin Spacey Know About 'Disruption?' Apparently A Lot. 

Pulse Chairman John Textor, somewhat of a divisive character in the industry, headed up the Michael Jackson project with Pulse CEO Frank Patterson. The two onboarded several artists formerly of the James Cameron-founded visual effects house Digital Domain, where Textor had served as CEO until the company defaulted on a $35 million dollar loan and went bankrupt in September 2012.

Digital Domain – which exists today under new ownership – had folded just shy of six months after Textor and his team wowed the world with a shirtless, strutting digital version of slain rapper Tupac Shakur at the Coachella Valley Music and Arts Festival on April 15, 2012.

For the Tupac apparition, Digital Domain furnished the visual effects and animation, while Tempe, Ariz.-based audio visual and lighting systems provider AV Concepts projected what looked like a floating hologram of the rapper onto the stage.

Related: Will.i.am Wants You to Buy This Eco-Friendly 3-D Printer

AV Concepts pulled off the Tupac trick using the exact same patented holographic reflective foil technology, called the Musion Eyeliner, that Alki David claims John Textor and his team at Pulse illegally used during the virtual Michael Jackson Billboard performance, allegedly constituting patent infringement.

Hologram USA and London-based Musion Das Hologram Ltd. jointly filed an emergency lawsuit against Pulse, Dick Clark Productions, the executors of the Michael Jackson estate and other defendants on May 15 --  only three days before the Billboard Awards -- in an attempt to stop the show from going on. A federal judge in Las Vegas told the plaintiffs to beat it, saying they had no proof that the planned virtual performance would infringe on their patents.

Alki David told Entrepreneur.com that he “took over” the license to German inventor Uwe Maass’s Musion Eyeliner system in North America six months ago from the financially floundering Musion Das Hologram Ltd. He also says he outbid Digital Domain and several other companies last February for the rights to the Eyeliner foil technology that he claims Textor, along with Michael Jackson estate lawyer John Branca, used at the Billboard Awards without securing the license.

Related: How to Succeed at Product Placement Without Celebrities

“They [Textor and Branca] jointly, knowingly, willfully infringed on this because they tried to acquire the license from us and we wouldn’t sell it to them,” David said.  

Uwe Maass says Textor is a fraud, claiming he “worked with a pirate and tried to make a setup without infringing my patent. [Textor] is a thief and tries to make money with the ideas of others.”

“There’s projection technology and there’s content technology,” Textor said, “and we do not compete with Alki David because we don’t do projection technology and he doesn’t have a single animator working for him.” (Alki David refutes this claim, stating that Hologram USA has seven full-time animators.)

Pulse finally countered Alki David’s lawsuit, filing one of its own on June 19, a month after its Billboard stunner. The $10 million countersuit calls David a “charlatan who had no involvement whatsoever in the development of the Michael Jackson animation” and further alleges that he "falsely claimed credit for creating and developing the visual effects spectacle in a nationally-televised interview on CNN, in press releases and on his various websites operated by his company, FilmOn."

Old dog, flashy new tricks

The process of creating a digital clone is no easy feat.

In the case of the Billboard Awards performance, Jackson’s estate originally pitched the idea and settled on the King of Pop’s look from 1991, according to Stephen Rosenbaum, the show’s Oscar-winning visual effects supervisor.

To digitally sculpt and animate Jackson's youthful appearance, with movement and mannerisms he might employ if still alive today, Pulse artists relied on a combination of video and photo reference material from the estate and the Internet. They also used cutting-edge scanning technology at the heavily Defense Department-funded University of Southern California (USC) Institute for Creative Technologies.

Related: How to Get Your Product into a Hollwyood Movie

“We used some of our lab’s technology to help with the facial textures of the digital Michael Jackson,” confirmed Paul Debevec, a USC computer science research professor who leads the institute’s computer graphics research group.

“This one [Michael Jackson] was incredibly hard. It’s an incredibly recognizable face and the only reason anybody thought it was creepy was that the guy passed some time ago and we’re seeing him again, not that his face looked completely strange or unrecognizable or his eyes looked goofy or dead or anything like that.”

Choreographers and dancers who worked with Jackson when he was alive were also brought in to fine tune the synthetic Michael’s moves, expressions and trademark yelps.   

Related: Branding With the Stars: Celebrity Tactics for Business Owners

For the live show, Pulse rigged six projectors above the stage and shined high-resolution, artist-rendered CGI video imagery of Michael onto a rear projection screen, which reflected directly off of a large sheet of holographic Mylar foil. The foil, stretched across the stage and tilted at a 41-degree angle away from the audience, acted as mirror upon which Michael appeared to float, sing and dance on, a “spirit dancing in the light.”

While the media was quick to hail the revival a groundbreaking success, live-stage production veterans weren’t so easily impressed. One insider, whose company provided a service at the Billboard Awards, noticed a tacky, telltale shimmer and heat wave on the foil, giving it away right from the start of the performance. Another said the illusion drums up curiosity based on sensationalism and "wow" factor alone, curiosity that he says won’t last once people figure out they’re being duped.

Related: From Paper Boy to Music Mogul: Entrepreneurship Lessons from Sean 'Diddy' Combs 

Pulse isn’t the only visual effects shop capable of creating extremely life-like digital human representations, dead or alive, said Pulse chairman John Textor. He said several companies are already doing it for the big screen, including Sony Pictures Imageworks, Industrial Light and Magic (a division of Lucasfilm Ltd.), Weta Digital in New Zealand, even the recently resurrected Digital Domain and a handful of others.

Smoke and Mirrors: Why We Aren't Seeing More Digital Zombies Like Michael Jackson
Image credit: Pulse Evolution Corporation

“The very best in visual effects could be doing this [digital posthumous shows], but they’ve chosen not to,” Textor said. “Their business is making feature films, and we’re glad they are because we’re the only specialized human animation company that I’m aware of in the world.”

The high price of resurrection

Bringing back the dead isn’t as expensive as making a feature film, but it isn’t cheap either. At this point, only major organizations, venues, individuals and estates with seriously deep pockets can afford to play ball.

Hologram USA's Alki David says that the cost of installing a permanent, Hologram USA-furnished 20- by 16-feet floating digital clone display inside of a movie theater is about $350,000.  (David said he’s hoping to lure audiences back to struggling major theater chains, like Regal, Cinemark, and AMC, via “holographic” show-driven live events.)

That includes the hallowed holographic foil, all other necessary hardware and software components and installation. About $115,000 of that ballpark total is for the projector all on its own. Then add in $150,000 for the annual license fee to use the special foil. The bigger and higher the resolution your image is, the bigger the price tag balloons.

Related: How to Triage Your Intellectual Property Needs

To do the same in an LED screen, which would likely be used at a larger venue, like at a full-stage production show such as the Billboard Awards, the cost could be somewhere near $3 million, David said.

Keep in mind that neither estimate accounts for the millions of dollars involved in commissioning photorealistic CGI images that could pass for living humans and for 3-D when properly projected before a live audience.

“Making believable, photorealistic digital humans is extremely hard and expensive,” Paul Debevec said. “It’s not making Fords. It’s making Bentleys or Lamborghinis or a Lotus. Think small production runs and a lot of time-consuming hand detail here.”

Debevec said he currently has a research prototype in his laboratory that “actually gets 3-D right," meaning the image appears to have depth and volume you can touch. So it’s no shocker that it also cost hundreds of thousands of dollars to manufacture.

Related: Innovators, Watch Out for These Invention Killers

Looking back, rapper-producer Dr. Dre got a steal of deal when he commissioned Tupac’s levitating digital likeness for an estimated $100,000 to $400,000. Prices have apparently shot up considerably since 2012. Michael Jackson’s revival reportedly cost several million dollars to create, even before the stage production was built around it, which reportedly cost many millions more.

More pixels, more problems

The exorbitant cost of highly specialized visual effects hardware, software, labor and production, along with likely relatively low margins, are far from the only barriers holding back the business of reviving deceased stars from wider adoption.

For starters, Textor says there simply aren’t enough artists out there who are talented enough to render realistic, believable digitally synthetic humans. Not enough are up to snuff.

“The reason you haven’t seen more of this is that there is only a very small handful of digital artists in the world that have ever demonstrated an ability to deliver believable digital humans,” he said. “The world wants to see more of this, but there just aren’t enough people to do it.”

Related: A Primer On Patents: Who's Getting Them, Where and How Long It's Taking (Infographic)

Bill Gilman, a visual-effects artist in Los Angeles whose work has appeared in nearly 50 feature films over the last 20 years, vehemently disagrees. “That’s bullshit,” he said. “Look at Gravity. Of course the artists exist. It’s all about the process, not the people.” Gilman worked for about seven months as a contract digital compositor for Digital Domain on the 2013 Tom Cruise action flick Oblivion.

“It’s a marketing ploy. He’s [John Textor’s] just trying to sell the idea that he’s the one to come to. It’s absolutely a difficult thing to do, but saying there aren’t enough artists who can do it isn’t true and it’s incredibly insulting.”

An industry insider said there’s “a slew” of visual effects artists and animators who are qualified and talented enough to craft believable digital humans. “It’s just that it’s such a niche application and they’ve only put together teams for these one-off live shows, but there’s no industry to say, ‘We specialize in this.’ That’s what the guys at Pulse are trying to do -- set up that niche industry. They get to brag about it. They did it and they’re trying to create that sub niche around it.”

Stephen Rosenbaum says he agrees that blaming a shortage of qualified artists for the infrequency of dead celebrity resurrections is not fair.

Related: House Passes Anti-Patent Troll Bill, Sends to Senate

“You can find the technical and the creative talent out there, definitely,” he said. “With jobs moving overseas, we tend to circulate a lot, especially over the last 10 years. The VFX industry is in turmoil in the U.S., specifically and particularly in California. A lot of us are turning into these nomadic career people, where we’re having to go out to far flung regions of the world to survive.”

Past, present and a freakier future

Jackson, Tupac and deceased rap stars Eazy-E and Ol' Dirty Bastard have all been made into delebrities. So, who will be raised from the grave next?

Alki David is looking into resurrecting Judy Garland, who he calls “the Michael Jackson of the gay community,” for a gay pride parade. David said it’s critical to involve deceased stars’ families throughout the process of resurrecting their loved ones for several key reasons, the biggest being skirting a legal nightmare over who owns what and which royalties are paid to whom.

Case in point: British songstress Amy Winehouse. “Her father, her mother and her brother are all part owners of Amy’s image and likeness,” David said, “but the music actually belongs to somebody else altogether, different record labels, different publishers.”

Related: 10 Must-Have Tech Tools for Producing Better Live Events

“You absolutely have to be in partnership with the estate, with the family, with the copyright holders,” he says, “but the family is the most important, from a moral point of view, from a marketing point of view and particularly from a likeness of image use.”

David said he’s in talks with the estates of many other celebrities right now. “We’re cherry-picking the most obvious dead celebrities,” he said. “We’re working with all of them. There are plenty of dead people willing to play ball.”  

John Textor, whom David joked he would “have killed” if he could , wouldn’t open up about who’s next on his list, but USA Today reported that legends like Bob Marley, Elvis Presley and Frank Sinatra could be on his radar for posthumous shows in “big casino cities, like Vegas and Macau.”

Related: These Famous People Have Tickets for Richard Branson's Space Flights

Textor thinks it would be a good idea to bring back “the gamechangers of the world,” famous public figures and historical personalities from outside of the showbiz realm, “guys like Bill Gates, Steve Jobs, Martin Luther King or Obama.”

“People that have had a remarkable impact on the world can be digitally preserved in posterity as public figures and continue to educate and communicate positive messages for social good.”

But what if they don’t? What if someone digitally resurrects Hitler?

Related: Why Vendors Can Make or Break Your Event

“I think it could devolve into social bad,” Stephen Rosenbaum said. “So we have to be very careful that the industries don’t turn into a misuse of the process, where we rewrite or misrepresent history.”

For now, though, Rosenbaum would prefer to “imagine Einstein teaching a real physics class or Martin Luther King or Mahatma Gandhi virtually addressing the United Nations.”

Creeped out by it or not, the business of virtually bringing back the dead and famous -- and eventually everyday people -- isn’t fading to black any time soon.

One of the few things that Alki David and John Textor seem to agree on is that, as the process of creating digital life-like clones gets better, faster and less costly, we’ll only see more of them -- eventually in our daily lives and possibly even of our own deceased loved ones. Another is that photorealistic digital clones might also find useful applications in the defense and surgical industries.

Related: 9 Famous Entrepreneur Philanthropists

“Digital humans are going to permeate every industry in every part of society,” Textor said. “There’s a major defense contractor that was given a facial animation contract to help our interrogators understand what deception looked like in different cultures and there’s a much bigger market in surgical simulation than there is in entertainment. With all of the potential, I’m going to be really unexcited if all I’m doing is entertainers in five years.”  

Paul Debevec’s institute at USC, an Army affiliated research facility, is already creating artificially intelligent virtual avatars for military training applications. None of the work is classified or weapons related.

“We call what we’re developing a flight simulator for social skills,” he said. “You sit across the table from a [virtual] Navy officer. You’re supposed to be their commander and they’ve had a discipline issue and, depending on what you say to it, it could go well or you could give him a good correction, or it could become more defensive or even belligerent.”

Related: The Secret Behind This Legendary Hollywood Hotel's 50-Year Run

The lab also runs simulated scenarios involving virtual reality-based NATO ally negotiations and therapy for veterans experiencing post-traumatic stress disorder.  

While the idea of having PTSD-diagnosed veterans talk to a simulated human might sound cruel, Debevec said it could open up the lines of communication and allow veterans to speak more freely about their fears and weaknesses. "There’s no getting in trouble or looked down upon for getting things they need to say off their chests.”

Debevec predicts that we might all one day fabricate life-sized digital lookalikes of ourselves while we’re still alive and still have a say over how we’ll look and act and what we say and do, while we’re alive and after we’ve passed.  

Related: 9 Wildly Successful Brands Born From TV Fame

“We have do-not-resuscitate clauses,” he said, “and now we need do-not-resurrect clauses, all of us, not just stars.

“Right now it takes about six months to make a believable digital human clone. Within five years, it’ll be one month. Within 10 years, it’ll be a week. And maybe, not too far off, you’ll literally just upload the reference videos and a half hour later, you’re setting the scene and putting together a clone of yourself.”

Related: Taking Aim at Facebook, Twitter Ramps Up Celeb Presence