Pixar 2001
The Future of the Disney Alliance
I. Introduction
It was Monday morning, November 5, 2001. Steve Jobs, CEO of Pixar Animation Studios, had just finished reviewing the opening weekend box office receipts for Monsters, Inc., the latest theatrical release produced by the partnership between Pixar and Disney. He sat back and pondered the future of his company and its relationship with Disney.
Jobs needed to consider the brand equity that Pixar had established through its recent successes, primarily through its alliance with Disney. He needed to take the company’s financial status into consideration, along with the recent and future activities of its competitors, and an honest assessment of the company’s competitive
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In 1979, Lucas extended an offer to Ed Catmull and his team at NYIT to work as part of his company. Catmull was named Vice President and over the next six years assembled one of the most talented teams of artists and programmers in the industry. One of these programmers was responsible for developing the first renderer for Lucasfilm, called REYES (Renders Everything You Ever Saw), which would eventually become Pixar’s RenderMan rendering tool.
As artists and programmers continued to innovate computer graphics tools such as the first commercially available 3D animation system software developed by Wavefront in 1984, advances were also being made in the area of high performance computer graphic hardware led by Silicon Graphics (SGI), and new rendering methods developed at Cornell University.
In 1984, John Lasseter left Disney and joined Lucasfilm at the behest of his friend Ed Catmull. Lasseter brought with him a tremendous amount of experience after leading Disney’s first major venture into computer-aided production in 1981. While his addition strengthened Lucasfilm, George Lucas’ interest in the project faded and he began looking for a buyer of the computer division. In 1986, a year after leaving Apple Computer, former CEO Steve Jobs bought the division from Lucas’ for $10 million and incorporated the new company as an independent firm called Pixar. Steve Jobs took the role of Chief Executive Officer and Ed Catmull became Chief
NeXT was not, however, the end of Steve Jobs. (Change Slide) In 1986, Jobs paid filmmaker George Lucas $10 million for a small firm called Pixar that specialized in computer animation. "Over the next six years Jobs poured another $40 million of his own money into the company. That film was Toy Story, a huge box office hit. The share price climbed dramatically, and Job’s 80 percent stock in Pixar suddenly was worth $1 billion. (Just a little better than the power balls don’t you think). In December of 1996, Apple announced that it was purchasing Next Software for over $400 million. (Change Slide) Jobs returned to Apple as a part-time consultant to CEO Gilbert Amelio. In September of 1997, Jobs was named temporary CEO of Apple while a replacement for Amelio was found. (Change Slide) Introduced in May 1998, it was Apple's first truly ground-breaking product since the original Macintosh of 1984. The design innovations for the iMac continued throughout 1998 and 1999 with
The companies worked towards a culture that was more in line with team learning. Pixar had previously operated under the premise where people were given the full chance to be creative and use their ideas in order to learn from their success or failures. Disney allowed for creativity however was more micromanaged. This new cultural shift for Disney to let go of some of the control was a hard thing to do for them. Disney had initially lost some of the people with this shift in their culture mainly with those who failed to adapt to this new free-spirited environment. With Disney’s regimented culture they followed more of a top down approach within their work environment. This approach initially during the merger hindered the learning approach that Disney Pixar was trying to create. Some employees at Pixar initially had issues with the cultural clash of a free-spirited environment and the rigid environment Disney operated with causing problems with retaining the talent at Pixar. Despite these cultural clashes and differences Disney Pixar was able to pull their new-shared vision in a direction that allowed for cross-organizational collaboration and for a new culture that worked for both companies.
2. Jobs, also owned Pixar, which was sold to Disney, Jobs had been the largest shareholder. Jobs’ is credited as the executive producer of the hit film, Toy Story.
After ten years with Apple, Jobs left a gap between him and Apple when he purchased Pixar. Jobs came back to Apple after eleven years after selling Pixar to Disney for 7.4 billion dollars. By the time Jobs came back, Apple bought NeXT and hired Jobs as an advisor, but through the pure genius of Steve Jobs, the “nearly bankrupt Apple was transformed into one of the planet’s most valuable corporations” (Apple Founder Steve Jobs Dies). After Jobs’ comeback, everything about Apple became better. From new products such as the iTouch, ipod, iPhone, iPad, Jobs’ ideas rained down new products that Apple’s rivals just could not catch up. Although some people prefer the complex computers from Windows, most everyday people want a electronic device that we know how to function and control. Jobs was able to bring to the common people what they really needed with his simplicity in most of his products and his user-friendly applications. Jobs led Apple until August of 2011 when he stepped down from CEO seat of Apple, and six weeks later, passed away in Palo Alto, California, the city Apple was born.
Today the Walt Disney Company is everywhere. Disney owns Pixar, a popular animation company for children. Disney has also purchased George Lucas' company, Lucasfilm. Lucasfilm produced blockbusters such as Star Wars and Indiana Jones. Marvel Entertainment, Touchstone Pictures, The Muppets, American Broadcasting Company (ABC), Hollywood Records, ESPN, A&E, Lifetime, History, Maker
Although the contract called for huge financial success, Steve Jobs was still considering selling the company (Paik, 34). Had Steve Jobs followed his plan of selling Pixar to a company like Microsoft, Toy Story many not have acquired such widespread success in revolutionizing the face of animation. Steve Jobs decided to keep Pixar and thus had become an industry leader in computer-generated imagery and digital animated feature films. Pixar was able to produce its own animation software, RenderMan and Marionette, as a result of John Lasseter’s technical brilliance and Steve Job’s leadership skills.
In spite of this, the studio didn’t see potential in his work with computer-generated animation, which resulted in his contract being terminated after his projects were complete in the early eighties. Only after he had left to join the animation department of Lucasfilm – which would later become Pixar Animation under the new ownership of Steve Jobs – he made a short called “Tin Toy” to test out new computer animation software. The short resulted in winning an Oscar for Best Animated Short and the test proved the innovative potential of computer generated animation. Disney then bought Pixar and signed Lasseter for a three-picture deal and named him chief creative officer of both studios. Toy Story served as a testament to Lasseter’s hard work, persistence, and Disney’s newfound trust in him, as it was more successful than they had all imagined. It broke the innovative plateau of which Disney fell victim of in the eighties. Toy Story was a huge box office success as it had a total budget of $30 million, and managed to generate a gross profit of over $350 million worldwide after its release on 22 November 1995. Toy Story was the first fully computer animated feature film ever made, and it was a huge innovative breakthrough in the animation world. Instead of using traditional methods of
Companies that have an emphasis on deadlines, success, and tangible results, promote an environment that leads towards results and completion, as opposed to a fine-tuned mastery of the specific task, wherein creativity is sacrificed for optimization. Pixar has received numerous awards for their movies, achieving commercial and artistic success, however,
The first six films that have been made since they have been there has been huge successes. The one thing they were really adamant about was that the two studios not be integrated together. “We established an absolute rule, which we still adhere to, that neither studio can do any production work for the other. For me, the local ownership is really important.” Hardware and software are always changing, that means it will become easy for smaller groups of people to get together to try something and when that happens it will give certain people opportunities to be creative in out of the blue ways. Ed Catmull doesn’t believe in the notion of a perfect process. Their goal isn’t to prevent all the problems; their goal is making good movies. They took the opposite approach than most company mergers. They told each studio ‘“You may look at the tools that the other has, you may use them if you want, but the choice is entirely yours.” They each have a development group that’s coming up with different ideas, but because we said, “You don’t have to take ideas from anybody else,” they felt freer to talk with each other.’ Talent is rare, a belief both Pixar and Disney share. Catmull believes that management’s job is “not to prevent risk but to build the capability to recover when failures occur. It must be safe to tell the truth”. “What’s the key to being able to recover? Talented people!
A prospective purchase of Pixar would bring numerous benefits for Disney. For starters, acquiring Pixar, the undisputed leader in computer animation, would give Disney a leg up on other studios as the animations industry transitions away from traditional animation. Maintaining a lead in the animated film industry was of vital importance to Disney not only “because animated films generated the highest returns of all movie genres”, but also because the characters from the animated films itself were integral to the bottom line of Disney’s theme park and consumer products divisions. Also, by acquiring Pixar, Disney ensured that its competitors would not be acquiring Pixar; in effect playing keep away and preventing its competitors from acquiring an advantage. An added benefit of acquiring Pixar would be that it would allow Disney to incorporate two visionaries, Steve Jobs and John Lasseter, into the company. With the benefit of hindsight, this was probably the most fruitful aspect of the deal because, with Lasseter at the helm, Disney Animation has been able to produce hits such as Frozen and Tangled,
Animation Studios • Steve Jobs, former CEO of Pixar Animation Studios and member of the Board of Directors at The Walt Disney Company
The big three in the CGI business now is Dreamworks, Sony, and Pixar (Kenny, 2010). Pixar has the largest market share pertaining to CGI producing companies, with Dreamworks second and Sony coming in third. How did Walt Disney position Pixar and themselves to be leaders of the pack? Robert A. Iger, Chairman and CEO of The Walt Disney Company stated, “Our remarkably successful acquisitions of Pixar and Marvel, in particular, have proven our unique ability to nurture strong brands and expand fantastic creative content to its fullest potential and maximum value” (Company, Fiscal Year 2012 Annual Financial Report And Shareholder Letter, 2012). This type of business strategy is smart and follows the thinking of most moviegoers. As theater prices trend upward, moviegoers are willing to pay for the experience of viewing a great CGI movie. All of this is possible with great leadership. Robert A. Iger, a graduate of Ithaca College, has served many roles in executive management with Walt Disney and since 1974 has led the ABC Group (Company, About Disney,
facilities were made and salesmen went great. Four years after Apples birth the company was worth $200 million. After a dispute between Steve and his employees, his own creation fired him. In revenge he started another computer company called NeXT and also bought the famous animation studio Pixar which he shaped from only being a simple dough to the most delightful pastry. Unlike Pixar, NeXT went bad but so did Apple. Steve convinced Apple to buy NeXT in order to compete with Microsoft and years after that he returned to Apple as a CEO and turned the company into what it is today, the most valuable company in the world (Internet).
The famous Walt Disney Company has made strides towards acquiring Pixar in a business deal worth $8billion. They have been rival cousins operating in the animation industry. For the past few years, there have been speculation about the imminent deal. So far, Disney has released all films belonging to Pixar. However, the distribution deal of the two companies is expected to expire after the release of "cars" during the summer period. The long awaited merger is likely to integrate the historic franchise of Walt Disney's animated characters such as Donald Duck, Minnie Mouse, and Mickey with the table of cartoons hits produced by Pixar such as "Finding Nemo" and "Toy Story" (Bragg, 2009). Pixar and Disney are now collaborating without any obstacles arising from two different shareholders of two different companies. The two companies have focused on critical issues such as developing innovative films, characters, and stories that delight the global market. As a section of this deal, the companies have announced that jobs are expected to become the company's board member. The director of Pixar exhibited great innovative skills acquired during his tenure at the Walt Disney. The director joined the integrated animation company will be responsible for overseeing Disney's new attraction designs (Kozami, 2005).
Founded on February 3, 1986, Pixar was best known for its animated films created with Photo Realistic Rendermen. It initially began as a graphics group under Lucasfilm’s Computer Division. However, it was later purchased by Steve Jobs for $10 million dollars and renamed to Pixar. It continued to grow its success with the release of many movies, including their Toy Story series, one of their highest