Pixar

“*Where story is king.*”

―Company motto.

**Pixar Animation Studios**, is an American computer animation film studio based in Emeryville, California. The studio has earned twenty-six Academy Awards, seven Golden Globes, and three Grammy Awards, along with many other awards and acknowledgements.

It is best known for its CGI-animated feature films created with PhotoRealistic RenderMan, its own implementation of the industry-standard RenderMan image-rendering application programming interface used to generate high-quality images. Pixar began in 1979 as the Graphics Group, part of the Computer Division of Lucasfilm before it was acquired by Apple Computer co-founder Steve Jobs in 1986. The Walt Disney Company bought Pixar in 2006 at a valuation of $7.4 billion; the transaction made Jobs the largest shareholder in Disney.

Pixar has produced lots of feature films, it began with *Toy Story* in 1995, best known for being the first long-length feature film made in CG animation format ever. It was followed by *A Bug's Life* in 1998, *Toy Story 2* in 1999, *Monsters, Inc.* in 2001, *Finding Nemo* in 2003, *The Incredibles* in 2004, *Cars* in 2006, *Ratatouille* in 2007, *WALL-E* in 2008, *Up* in 2009, *Toy Story 3* (The 2nd all-time highest grossing animated film behind *Frozen)* in 2010, *Cars 2* in 2011, *Brave* in 2012, *Monsters University* in 2013, *Inside Out* and *The Good Dinosaur* in 2015.

Thirteen of the films have received critical and financial success, with the notable exception being *Cars 2*, which, although was a financial success, received substantially less praise than Pixar's previous films. As of December 2013, its feature films have made over $8.5 billion worldwide, with an average worldwide gross of $607 million per film. In addition, all of the films produced by Pixar are among the top 50 highest-grossing animated films of all time, with *Finding Nemo* (#26), and *Toy Story 3* (#12) all in the top 50 highest-grossing films of all time.

Since the award's inauguration in 2001, most of Pixar's films have been nominated for the Academy Award for Best Animated Feature, with six winning; *Finding Nemo*, *The Incredibles*, *Ratatouille*, *WALL-E*, *Up* and *Toy Story 3*. *Up* and *Toy Story 3* are two of only three animated films to be nominated for the Academy Award for Best Picture.

On September 6, 2009, executives John Lasseter, Brad Bird, Pete Docter, Andrew Stanton, and Lee Unkrich were presented with the Golden Lion for Lifetime Achievement by the Biennale Venice Film Festival. The award was granted by Lucasfilm founder George Lucas.

## History of Pixar

Pixar was founded as The Graphics Group, which is one third of the Computer Division of Lucasfilm that was launched in 1979 with the hiring of Dr. Ed Catmull from the New York Institute of Technology (NYIT), where he was in charge of the Computer Graphics Lab (CGL). At NYIT, the researchers pioneered many of the CG foundation techniques—in particular the invention of the "alpha channel" (by Catmull and Alvy Ray Smith); years later the CGL produced an experimental film called *The Works.*

After moving to Lucasfilm, the team worked on creating the precursor to RenderMan, called REYES (for "renders everything you ever saw"); and developed a number of critical technologies for CG—including "particle effects" and various animation tools.

In 1982 the team began working on film sequences with Industrial Light & Magic on special effects. After years of research, and key milestones in films such as the Genesis Effect in *Star Trek II: The Wrath of Khan* and the Stained Glass Knight in *Young Sherlock Holmes* the group, which numbered about 45 individuals back then, was purchased in Feb 1986 by Steve Jobs shortly after he left Apple Computer. Jobs paid $5 million to George Lucas and put $5 million as capital into the company.

A factor contributing to Lucas' sale was an increase in cash flow difficulties following his 1983 divorce, which coincided with the sudden drop-off in revenues from *Star Wars* licenses following the release of *Return of the Jedi*. The newly independent company was headed by Jobs, who served as Chairman and Chief Executive Officer of Pixar. Dr. Edwin Catmull served as Chief Technology Officer and Dr. Alvy Ray Smith as Executive Vice President and Director. In 2001, Edwin Catmull was named President of Pixar.

Initially, Pixar was a high-end computer hardware company whose core product was the Pixar Image Computer, a system primarily sold to government agencies and the medical community. One of the buyers of Pixar Image Computers was Disney Studios, which was using the device as part of their secretive CAPS project, using the machine and custom software to migrate the laborious ink and paint part of the 2-D animation process to a more automated and thus efficient method. The Image Computer never sold well. In a bid to drive sales of the system, Pixar employee John Lasseter—who had long been creating short demonstration animations, such as *Luxo Jr.*, to show off the device's capabilities—premiered his creations at SIGGRAPH, the computer graphics industry's largest convention, to great fanfare.

As poor sales of Pixar's computers threatened to put the company out of business, Lasseter's animation department began producing computer-animated commercials for outside companies. Early successes included campaigns for Tropicana, Listerine, Life Savers and *Terminator 2: Judgment Day*. In April 1990 Jobs sold Pixar's hardware division, including all proprietary hardware technology and imaging software, to Vicom Systems, and transferred 18 of Pixar's approximate 100 employees.

The same year Pixar moved from San Rafael to Richmond, California. During this period, Pixar continued its relationship with Walt Disney Feature Animation, a studio whose corporate parent would ultimately become its most important partner. In 1991, after a tough start of the year when about 30 employees in the company's computer department had to go (including the company's president, Chuck Kolstad), which reduced the total number of employees to just 42, Pixar made a $26 million deal with Disney to produce three computer-animated feature films, the first of which was *Toy Story*. At that point, the software programmers, who were doing RenderMan and CAPS, and Lasseter’s animation department, who made television commercials and a few shorts for *Sesame Street*, was all that was left of Pixar.

Despite the total income of these products, the company was still losing money, and Jobs often considered selling it. Even as late as 1994, Jobs contemplated selling Pixar to other companies, among them Microsoft. Only after confirming that Disney would distribute *Toy Story* for the 1995 holiday season did he decide to give it another chance. The film went on to gross more than $350 million worldwide. Later that year, Pixar held its initial public offering on November 29, 1995, and the company's stock was priced at US$22 per share.

### Disney

Pixar and Disney had disagreements after the production of *Toy Story 2*. Originally intended as a straight-to-video release (and thus not part of Pixar's three-picture deal), the film was eventually upgraded to a theatrical release during production. Pixar demanded that the film then be counted toward the three-picture agreement, but Disney refused. Pixar's first five feature films have collectively grossed more than $2.5 billion, equivalent to the highest per-film average gross in the industry.

Though profitable for both, Pixar later complained that the arrangement was not equitable. Pixar was responsible for creation and production, while Disney handled marketing and distribution. Profits and production costs were split 50-50, but Disney exclusively owned all story and sequel rights and also collected a distribution fee. The lack of story and sequel rights was perhaps the most onerous aspect to Pixar and set the stage for a contentious relationship. Pixar movies like Pixie Dust is just to show that Pixar movies make sense again and people will buy it.

The two companies attempted to reach a new agreement in early 2004. The new deal would be only for distribution, as Pixar intended to control production and own the resulting film properties themselves. The company also wanted to finance their films on their own and collect 100 percent of the profits, paying Disney only the 10 to 15 percent distribution fee. More importantly, as part of any distribution agreement with Disney, Pixar demanded control over films already in production under their old agreement, including *The Incredibles* and *Cars*. Disney considered these conditions unacceptable, but Pixar would not concede.

Disagreements between Steve Jobs and then Disney Chairman and CEO Michael Eisner made the negotiations more difficult than they otherwise might have been. They broke down completely in mid-2004, with Jobs declaring that Pixar was actively seeking partners other than Disney. Pixar did not enter negotiations with other distributors. After a lengthy hiatus, negotiations between the two companies resumed following the departure of Eisner from Disney in September 2005.

In preparation for potential fallout between Pixar and Disney, Jobs announced in late 2004 that Pixar would no longer release movies at the Disney-dictated November time frame, but during the more lucrative early summer months. This would also allow Pixar to release DVDs for their major releases during the Christmas shopping season. An added benefit of delaying *Cars* was to extend the time frame remaining on the Pixar-Disney contract to see how things would play out between the two companies.

Pending the Disney acquisition of Pixar, the two companies created a distribution deal for the intended 2007 release of *Ratatouille*, in case the acquisition fell through, to ensure that this one film would still be released through Disney's distribution channels. (In contrast to the earlier Disney/Pixar deal *Ratatouille* was to remain a Pixar property and Disney would have received only a distribution fee.) The completion of Disney's Pixar acquisition, however, nullified this distribution arrangement. Unlike the earlier Pixar/Disney deal used for the earlier films, this one has the following caveats:

* Pixar is responsible for 100% of the production costs.
* Pixar owns the film and the rights to the characters.
* Disney is paid only a straight distribution fee.

### Acquisition by Disney

Disney announced on January 24, 2006 that it had agreed to buy Pixar for approximately $7.4 billion in an all-stock deal. Following Pixar shareholder approval, the acquisition was completed May 5, 2006. The transaction catapulted Steve Jobs, who was the majority shareholder of Pixar with 50.1%, to Disney's largest individual shareholder with 7% and a new seat on its board of directors. Jobs' new Disney holdings exceeded holdings belonging to ex-CEO Michael Eisner, the previous top shareholder, who still held 1.7%; and Disney Director Emeritus Roy E. Disney, who held almost 1% of the corporation's shares. Pixar shareholders received 2.3 shares of Disney common stock for each share of Pixar common stock redeemed.

As part of the deal, John Lasseter, by then Executive Vice President, became Chief Creative Officer (reporting to President and CEO Robert Iger and consulting with Disney Director Roy Disney) of both Pixar and the Walt Disney Animation Studios, as well as the Principal Creative Adviser at Walt Disney Imagineering, which designs and builds the company's theme parks. Catmull retained his position as President of Pixar, while also becoming President of Walt Disney Animation Studios, reporting to Bob Iger and Dick Cook, chairman of Walt Disney Studio Entertainment. Steve Jobs' position as Pixar's Chairman and Chief Executive Officer was also removed, and instead he took a place on the Disney board of directors.

Lasseter and Catmull's oversight of both the Disney and Pixar studios did not mean that the two studios were merging, however. In fact, additional conditions were laid out as part of the deal to ensure that Pixar remained a separate entity, a concern that analysts had expressed about the Disney deal. Some of those conditions were that Pixar HR policies would remain intact, including the lack of employment contracts. Also, the Pixar name was guaranteed to continue, and the studio would remain in its current Emeryville, California location with the "Pixar" sign. Finally, branding of films made post-merger would be "Disney•Pixar" (beginning with *Cars*).

Jim Morris, producer of *WALL-E*, has been named general manager of Pixar. In this new position, Morris is in charge of the day-to-day running of the studio facilities and products. There were additional conditions laid out as part of the deal to ensure that Pixar remains a separate entity, a concern that many analysts had about the Disney deal:

* If Pixar pulls out of the deal, they must pay Disney a penalty of US $210 million.
* The Disney board would include Steve Jobs.
* John Lasseter has the authority to approve films for both Disney and Pixar studios, with Disney CEO Robert Iger carrying final approving authority.
* The deal requires that Pixar's primary directors and creative executives must also join the combined company. This includes Andrew Stanton, Pete Docter, Brad Bird, Bob Peterson, Brenda Chapman, Lee Unkrich, and Gary Rydstrom.
* There will be a steering committee that will oversee animation for both Disney and Pixar studios, with a mission to maintain and spread the Pixar culture. This committee will consist of Catmull, Lasseter, Jobs, Iger, Cook, and Tom Staggs. They will meet at Pixar headquarters at least once every two months.
* Pixar HR policies will remain intact, including the lack of employment contracts.
* Ensures the Pixar name will continue, and that the studio will remain in its current Emeryville, California location with the "Pixar" sign.
* Branding of films made post-merger will be "Disney Pixar".

### Expansion

On April 20, 2010, Pixar Animation Studios opened a new studio in the downtown area of Vancouver, British Columbia, Canada. The roughly 2,000 square meters studio is primarily producing shorts and TV specials based on characters from Pixar's feature films. The studio's first production was the *Cars Toons* episode, "Air Mater".

### Traditions

While some of Pixar's first animators were former cel animators, including John Lasseter, they also came from stop motion animation and/or computer animation or were fresh college graduates. A large number of animators that make up the animation department at Pixar were hired around the time Pixar released *A Bug's Life* and *Toy Story 2*. Although *Toy Story* was a successful film, it was Pixar's only feature film at the time. The majority of the animation industry was, and is still located in Los Angeles, California, while Pixar is located 350 miles north in the San Francisco Bay Area. Also, traditional 2-D animation was still the dominant medium for feature animated films.

With the death of Los Angeles–based animators willing to move their families so far north, give up traditional animation, and try computer animation, Pixar's new-hires at this time either came directly from college, or had worked outside feature animation. For those who had traditional animation skills, the Pixar animation software (Marionette) is designed so that traditional animators would require a minimum amount of training before becoming productive.

In an interview with PBS talk show host Tavis Smiley, Lasseter said that Pixar films follow the same theme of self-improvement as the company itself has: with the help of friends or family, a character ventures out into the real world and learns to appreciate his friends and family. At the core, Lasseter said, "it's gotta be about the growth of the main character, and how he changes."

Pixar has been criticized for its lack of female protagonists. *Brave*, Pixar's 13th cinema release, is the studio's first with a female lead (voiced by Kelly Macdonald). By the MPAA, most of the films are rated G, while three of them are rated PG (*The Incredibles*, *Up*, and *Brave*). However, the G-Rated *Cars 2* contains violence and rude humor, which was a controversy in 2011. Also, except for *Cars 2*, their films have had positive reviews, with 10 films (the only exceptions being *Brave, Monsters University,* and *Cars)* being above 90% on Rotten Tomatoes.

### Sequels and prequels

*Toy Story 2* was commissioned by Disney as a direct-to-video, 60-minute film. Feeling the material was not very good, John Lasseter convinced the Pixar team to start from scratch and make that their third full-length feature film. *Toy Story 3* was the second big-screen sequel when it was released on June 18, 2010. *Cars 2*, the studio's third theatrical sequel, was released on June 24, 2011. On June 27, 2011, Tom Hanks implied that a fourth *Toy Story* movie was in the works, but this has not been confirmed by the studio.

Pixar states that they believe that sequels should only be made if they can come up with a story as good as the original. Following the release of *Toy Story 2*, Pixar and Disney had a gentlemen's agreement that Disney would not make any sequels without Pixar's involvement, despite their right to do so. In 2004, after Pixar announced they were unable to agree on a new deal, Disney announced that they would go ahead with sequels to Pixar's films with or without Pixar. *Toy Story 3* was put into pre-production at the new CGI division of Walt Disney Feature Animation, Circle 7 Animation.

When Lasseter was placed in charge of all Disney and Pixar animation following the merger, he immediately put all sequels on hold; Disney stated that *Toy Story 3* had been cancelled. However, in May 2006, it was announced that *Toy Story 3* was back in pre-production, under Pixar's control when a new plot had been conceived.

Lasseter further fueled speculation on future sequels when he stated, "If we have a great story, we'll do a sequel". *Cars 2*, Pixar's first sequel not based on *Toy Story*, was officially announced on April 8, 2008. *Monsters University*, the prequel to *Monsters, Inc.* and Pixar's first prequel, was announced on April 22, 2010, for release on November 2, 2012. However, on April 5, 2011, it was announced that the film's release date had been pushed back to June 21, 2013 due to the success of Pixar films that are released in the summer, according to Disney distribution executive Chuck Viane.

In 2014, Brad Bird recently claimed to have begun pre-production on a sequel to *The Incredibles*.

### Expansion to television

*Toy Story* was the first Pixar film to be extended into television, with the *Buzz Lightyear of Star Command* film and TV series. *Cars* was expanded to television via *Cars Toons*, a series of shorts (three to five minutes) running between regular Disney Channel shows and featuring Mater (the tow truck voiced by comedian Larry the Cable Guy).

### Animation and live-action

All Pixar films to date have been computer-animated features (*WALL-E* has so far been the only Pixar film not to be completely animated, featuring a small live-action element). *1906*, the live action film by Brad Bird about the 1906 San Francisco earthquake, is currently in development. Bird has stated that he was "interested in moving into the live action realm with some projects" while "staying at Pixar [because] it's a very comfortable environment for me to work in."

### Product pipeline

In 2008, Pixar announced *Newt*, a story about the last two blue-footed newts in existence destined to mate to save their species from extinction, scheduled for release in June 2012. This project was to be followed by the fantasy film *The Bear and the Bow*.

In April 2010, Disney/Pixar announced that, instead, *The Bear and the Bow* would be released first, under the new name *Brave*, followed by a sequel to the 2001 Pixar feature *Monsters, Inc.* later that year. Also, *Newt* was removed from the official *Disney A to Z Encyclopedia* supplement by chief archivist Dave Smith, who confirmed that the film had been cancelled. In May 2011, Pixar CCO John Lasseter implied that *Newt* had been shelved due to it having a similar plot-line to Blue Sky Studios' film *Rio*.

In April 2012, Pixar announced their intention to create a film centered on the Mexican holiday Día de los Muertos and to be directed by Lee Unkrich.