Pixar: A tale of Hollywood’s most innovative studio

Article  by  Franck FINANCE-MADUREIRA  •  Published 07.12.2010  •  Updated 13.12.2010
With its focus on creativity and technological prowess, within the space of just a few years, Pixar has become Disney’s showcase studio – despite their sometimes-rocky relationship.

Summary

Known worldwide since 1995 with Toy Story, the first feature-length animation film made with computer-generated graphics in the history of cinema, Pixar Animation Studios is an American company producing computer animation films that since 2006 has belonged to Disney. Behind the creation of the studio in 1986 we find the Graphics Group, which was just a department of the IT division of the Lucasfilm company, which made Star Wars.

Edwin Catmull, recruited by George Lucas when the department was established in 1979, is today chairman of the studio he set up with John Lassiter and Steve Jobs in 1986. Pixar has also become one of the major players in world cinema with the increasing prominence of animation over the last twenty years.
 
Deliberately positioning themselves as the spiritual heirs of Walt Disney, right from the start-up of their first feature film, the studio directors signed a distribution agreement covering several films with Disney. The success of the studio after Toy Story  has jeopardised Disney’s leadership position on the western animation market and challenged the traditional animation model with the technological revolution it brings with it. The distribution agreement was frequently reviewed and re-assessed by the two studios and there were many twists and turns in their relationship before Pixar was eventually acquired by Disney.

Technology at the service of success

In order to understand what Pixar is all about, you need to go back to the beginnings of the studio which, when it was set up, was first and foremost a technical service provider specialising in the development of software for animation purposes. The studio sold technological solutions to the creatives, including Disney. John Lasseter, a former animator with Disney – who joined Lucasfilm, which was to become Pixar – had the idea of producing short films in computer-generated imagery so as to demonstrate the effectiveness of the firm’s products. This was in fact how Luxo Junior was born, the little lamp that became the Pixar logo.
 
Once Pixar was set up, the company developed Rendermann, its range of technical solutions, which it used and marketed, and which evolved  as it was utilised in the production of studio films. The Rendermann products still represent 5% of the studio’s revenue and, thanks to this inbuilt research feature, Pixar attracts the best animation technicians and artists.
 
Alongside the technological developments, Pixar changed the production rules for feature-length animation films, basing them on the precepts laid down by John Lassiter (who himself directed the first two Toy Story films) on the presentation of the “story” (“It is not the technology that entertains the audience, or any particular medium. It’s what you do with it that matters. And at Pixar, we are mainly concerned with the plot, telling a fine story with great characters”) and quality (“Quality is the best business plan there is”) and the working atmosphere, because he worked on the principle (very prevalent among the Californian start-ups) that the pleasure those who work on a film get out of making it will be matched by the enjoyment of the spectators who watch the film.
 
Toy Story, will always be a revolution in terms of the creation of animated imagery, how to tell a story and use technology. It will go down in the history of cinema as the first feature-length animation with computer-generated graphics and a world success story that racked up  362 million euros at the box-office
 
There followed  A Bug's Life (1998), Toy Story 2 (1999), Monsters, Inc. (2001), Finding Nemo, (2003), The Incredibles, (2004), Cars (2006), Ratatouille (2007), WALL-E (2008), Up, (2009) and, lastly, Toy Story 3 (2010). These 11 films generated more than 6 billion dollars in profits and up to now 35 nominations and 9 Oscars[+] NoteFor more informationX [1].
 
Pixar has also indulged itself by re-launching the fashion of screening a short film before the main feature in movie theatres, which has enabled its teams to test their creativity and technological innovations full scale. And once again, the operation has been a success since the studio has collected 9 nominations and 3 Oscars for the best short animation film – all of that within 15 years of the first film being released.
 
 
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An unusual form of governance

While Disney took over Pixar in 2006 for 7.4 million dollars, the studio, which was floated on the stock market in 1995, did not just become a subsidiary like any other. The battle lasted several years and cost Michael Eisner, Disney CEO from 1994 to 2005, his job.
 
The takeover enabled Steve Jobs (Apple CEO) to become a director and primary individual shareholder of Disney with more than 6% of the capital ahead of Roy E. Disney, Walt’s nephew, and the former CEO Michael Eisner. As for the two other creators of Pixar, they took over key positions at Disney. Ed Catmull jointly held the chief executive positions at Walt Disney Animation Studios and at Pixar while John Lasseter took on the artistic management of all animation in the Disney Group.
The various contractual and gentlemen’s agreements.  gave Pixar somewhat unusual decision-making powers. Despite the “dual positions” held by Catmull and Lasseter, the companies did not merge and the framework agreement guaranteed Pixar complete artistic freedom, the retention of its historic head office at Emeryville (California) the maintenance of its methods for managing human resources as well as complete control, following the controversy that surrounded the production of Toy Story 2[+] NoteDisney wished to make this “direct to DVD” as with its own sequels such as “The Lion King 2”, “The Return of Jafar” and Pixar seeing the quality of the screen play and the animation managed to get the upper hand: a cinema release.X [2], over any sequels launched by the studio.
 
The  DreamWorks studio, set up in 1994 by Stephen Spielberg, Jeffrey Katzenberg (former Disney animation manager) and David Geffen, who had become Pixar’s main competitor in the field of animation[+] NoteRead the article in Expansion that contrasts the two studiosX [3] with computer-generated graphics with Shrek in 2001, also entered an agreement with Disney. The Pixar parent company consequently found itself at the head of most of the distribution of US animation productions.
 
The original Pixar team also retained control over derivative products and theme parks. The latter, alone, accounts for around 30% of the group’s turnover (17% for animation movies) just like the “leisure” activities of Disney (e.g. cruises, hotels).
 
John Lasseter also negotiated into his remit the role of creative adviser for the subsidiary “Parks and Leisure” at Walt Disney Imagineering. The latest rides operate in the Paris Disneyland under the Toy Story franchise.
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More than a subsidiary, a studio within a studio

While Pixar has enjoyed an extremely positive image over fifteen years thanks to a continuous series of public successes and critical acclaim, the studio has managed to maintain its influence over its core business, creating animation films in CGI while becoming a 100 % subsidiary of the historic giant of the sector.
 
Founded on intriguing family-based stories, Pixar, as a worthy heir of Disney, must be vigilant as to the ability of its competitor, Dreamworks, to position itself on a more adult market (irony, double entendre, and criticism of the “values” embodied by Disney in the films of the Shrek franchise, for instance) and which capitalise on the promotion of animation films by star actors recruited for the voicing. Pixar, unconstrained but in-house, has to avoid the mainstream pitfalls that have given the parent company an outdated look, more inclined to sell TV programmes, cuddly toys and tickets to its theme parks than to operate at the artistic cutting edge.
 
Lasseter, the embodiment of the Pixar spirit, seems to have taken account of these risks in repositioning the Disney animation approach on the traditional cartoon model[+] NoteRead the interview with John Lasseter on “The Princess and the Frog” in The Telegraph dated 24th January 2010X [4], leaving the CGI and 3D niche to Pixar, committed to representing the modernity of the group. Even if John Lasseter seems to have succumbed to the lucrative siren songs of TV productions with the Toons series derived from the film Cars or the cartoons built round Buzz Lightyear, one of the heroes of Toy Story
 
Pixar has started work, for the first time in its history, on a film with real photo shots (1906, telling the story of the earthquake which struck San Francisco in that year). This illustrates the determination of Lasseter to position Pixar as a fully-fledged film studio embodying the modernity of the Disney group.
 

Translated by Christopher Edwards
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Key data

Chairman : Edwin Catmull
 
Shareholder : The Walt Disney Company (100%)
 
Payroll : 850
 
Pixar turnover :  N.K
 
Disney turnover (2009) : 36.3 million dollars
 
Animation contribution to Disney’s turnover (2009) : 17%

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Selective bibliography

Bill CAPODAGLI, Lynn JACKSON : Innovate the Pixar Way : Business Lessons From the World's Most Creative Corporate Playground, McGraw-Hill Professional, 2009
 
David A. PRICE : The Pixar Touch: The Making of a Company, Vintage Books, 2009
 
Robert VELARDE : The Wisdom of Pixar: An Animated Look at Virtue, VP Books, 2010
 
Karen PAIK, Leslie IWERKS : To Infinity and Beyond! The Story of Pixar Animation Studios, Chronicle Books, 2010
 
Collective : Pixarpedia, DK Publishing, 2009
 
Bill CAPODAGLI, Lynn JACKSON : The Disney Way: Harnessing the Management Secrets of Disney in Your Company, McGraw-Hill Professional, 2006
 
James B. STEWART : DisneyWar, Simon & Schuster, 2005
 
Donald DEPAMPHILIS : Mergers, Acquisitions, and Other Restructuring Activities: An Integrated Approach to Process, Tools, Cases, and Solutions, “Case Study” (p149-150), Academic Press Inc., 2007
 
André ROY : Dictionnaire général du cinéma: Du cinématographe à internet: art, technique, industrie, Fides, 2007

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