case 14. ‘Since Pixar launched Toy Story in 1995, it has released 17 ‘other films, each of which has debuted at the top of the box office charts (see Exhibit 1). Its films have received critieal acclaim, with 10 Academy Award nominations and eight wins for Best Animated Film. This is far more than any other studio since the category was added in 2001. ‘The only exception to its stellar record was The Good Dinosaur, which was released in late 2015, ater Pixar had yanked it from release the previous year. The firm had Case pened y anal Stas, Mii Ste Ute th be ssstace of Pf An B Ee Pe Une teri as een ‘sav fom pbs sues te sed pups fc eeson. (Copy ©7017 Jamal Sam aod Aan BE, pulled the film away from its director as it began t0 search for new ways to rework the story. Pixar had done before, and insists that rethinking an animated film is not uncommon, especially when you are working with fresh, untested ideas. In the end, although The Good Dinosaur ‘worked well as family entertainment, it did not quite meet the lofly standards for originality and ereativity set by Pixar's other films. ‘The continued success of its films has put aside doubts about the ability of Pixar to maintain its creative ity after being acquired by the Walt Disney Company in 2006 for the hefty sum of $7.4 billon, The deal was finale ized by the late Steve Jobs, the Apple Computer chief ‘executive, who then served as the head of the computer er ‘lof Par’ fis leased to date have ended up ang the top animated fms fl Pixar Fis time based on woldvide bx ofice revenues in millon of US. dlls. oo Rank co Yeor ie) 1 Toy Slay 3 2010 $1065 2 Finaing Nemo 2003 so40 3 Mensers University 2013 $745 4 vp 2008 $735 5 Tre nereabes 2005, $630 ‘ atoutite 2007 $620 7 Moses 2002 $575, 8 cars? 2011 $560 ° Brove 2012 $555) 10 Woe 2008 $535 " Toy Stay? 1999 $515 2 Finding Dory 2016 $485 ry cars 2006 $460 4 Toy Story 1995 $390 5 Bugis te 1998 $365, 6 Inside Out 2018 $356, ” ‘The Good Dinosaur 2018 $123 Source AWD8 Yorn C06 cASE 14: PAR ee aang roe[a snimation firm Pixar, Disney CEO Bob Ip 1¢ world’s MOM successful animation comrarne mon Sr odlareec oan ees ae Des eminent ae "ema Iie were comin th Px wi ald emul benef bth ee tose “jsney is the only company with animation in ther DNA John Lasseter, Who oversces all story development o Pear Aen ay nepive eles frm Daren errea e fem aod ined tht Pars Tine nee ncn sueted to higher standards by crs bau of sone of execs. It some of the u's fies had fen Gem. old be tsbued atone pow at ancomeromiing cot senda nde beer EaCamal present Pa etre hms com ation 1 ie vba nope tue cary fe ba pou “Nobody eer rneon he a that you slipped [up in] a film, but they will remember a pal fm: Ded” Catrall mas neds Pot = dail is kt proce of pitty eating Fim replace the standard production ine speach Sionaly pursed by Disney. This comren nee wat Son elnd in the Osan at eotiears Pac reas dup bt which someone drew in Bue Gl tang, Mie beten won omsier Acs foes unite Flo ase a the pos er Pr aed te merhe a omit Janey 2001 ing Dre Theva ws herd by ees, omens wat become oe ofthe bigs bor office hi of 016 Pushing for Computer Animated Films ‘The roots of Pinar stretch back to 1975 with the founding ‘ofa yocational school in Old Westbury, NY, called the New York Insitute of Technology. It was there that Edwin E. Catmull, a straivlaced Mormon from Salt Lake City who Joved animation but couldn't draw, teamed up with the peo ple who would later form the core of Pixar. “It was artists and technologists from the very star.” recalled Alyy Ray Smith, who worked with Catmul during those years. “It was like a fairy tale.”? By 1979, Catmull and his team decided to join forces with famous Hollywood director George W. Lucas, J. They ‘were hopeful that this would allow them to pursue their dream of making animated films. As part of Lucas’s film making facility in San Rafael, California, Catmull’ group ‘of aspiring animators was able to make substantial progress {in the art of computer animation. But the unt was notable to generate any profits and Lucas was not willing to let it grow beyond using computer animation for special eects. ‘In 1985 Catmull finaly turned to Jobs, who had just ‘been ousted from Apple. Jobs was reluctant to invest in firm that wanted to make fulblength feature films using ‘computer animation. But a year later, Jobs did decide 10 ‘buy Catmull’s unit for just $10 million, which represented a third of Locas's asking price, While the oewts named Paar Animation Staion ted to push the boundaries of Comper animation ve the next five yeas Jobs ended 02 fang et ads $0 mon mo to © sf is una weaith atthe tne. “There were SES There al deapaed but Sortnstly ot ala he time: ad Joba Si Cams em i come wo mae san tweatthrougie in the development of computer seer faery tearre in (ee Exit 2) in 1991, Disney cated ip ping Para tree lm cota that started with sn When the movie wa inal released in 1995. #8 reese surprised everyone inthe film industry, Rather han the mee ile fm Disney had expected, Tor Sor, became the sensation of 1995 Tr out the rank of the id hy ‘Se grosingatmaed ino alltime. aring S36 in worldwide box office eves ‘Wat dpe aby had decided 1 tke Pixar pubic penta shoes priced at $22 sb past $3. Jobs aed es ond, Orile CEO Lawrence Elson. ote hin ceca nthe ions’ cub. Wath Pars soe cee cer iobe returned to tke anew deal with Dishes Feng 1996 avatunch wth Walt Disey chit Michal D. Fee pe made his demands an equal sare ofthe prof cae pting on merchandise and onscreen cred and ‘eee that Disney would market Paar fils as they Gi ter ov Boosting the Creative Component ‘With the sucess of To Star, Jbs realized that he ad hit something big. He had obviously tapped into his Silicon Valley roots and turned to computers to forge 2 unique sie of eretve moviemaking. In each of its subsequent Tim. Par continaed to develop computer animation that Allowed for more iflike backgrounds, texture, and move- tent than ever before. For example, since rea! leaves are translucent, Pea’ engineers developed special software algorithms that both reflect and absorb ight creating lumi- nous scenes among jungles of clover Tn spite of the significance of these advancements in computer animation, Jobs was well aware that suc- cessful feature films would require a strong creative spark. He understood that it would be the marriage of {echrology with ereativty that would allow Pixar to rise above most ofits competition. To get that, Jobs fostered 4 campuvike environment within the newly formed ‘outfit similar to the freewheeling, charged atmosphere in the early days of his beloved Apple, where he also feturned as acting CEO. “I's not simply the technology that makes Pixar” said Dick Cook, former President of ‘Wait Disney studios.® Even though Jobs played a crucial supportive role, it was CCatmull who was most responsible for ensuring that the firm's technological achievements created synergies with itscreatve efforts. He has been the keeper ofthe company’s Uuique innovative culture, which has blended Silicon Valley ‘CASE 14 = POUR C87EXHIBIT 2 Milestones ‘Steve Jobs buys Lucas’ computer group and crises it Pra. The fer competes a rt fm, Loo, whicis and Tropicana. tet shor, ve at east three fue year and win an nt: 0 50-50 split of the development cost and profs of five featreengih ns responsbites forts own animation unto Pa’ ereative brass. Cars i rlensed and 1905 uated an oc remain sas torte, Lise se‘ Ratgonpt manatee mm seer forsss patio ane r Diysolet 2 ii, Peo ‘length, computer-animated feature films. sens Pek i Sy ft a ere in, we bcos te tp esi are 8 Cn wera ete company gps Dt oor PROC Dany mpl = ne are! InowesShr er Gone isn Os 198-59 ABs Lead Sy2 ve eee, gta pig niin wehbe ar ao 2201-08 Asompothiston Pr Montes. Fg Nea 24 The nce 2% Sore anerbretice 208 Web icones toh in fo Para ec tec fae eth ated 2009 Uodecanesh Fin fom Pea he Os frase ent aati Zeit ___feySen3 ces scar vominaon an wis wong orf Bes inte Fi. oii Seve bs es etn Es Cama in ge 2012 Bve becomes te see nfm Pare a Oxf Bet Amat Fn. 2015 sie Ot cames te ein fm om Prt rece an scr er Best rie ln 201 Perched roman ft an xaos nme in i techies, Hollywood production honchos, and artsy anima tion experts, In the pursuit of Catmul's vision, this eclectic, sroup transformed ther office cubicles into tiki hus, circus tents, and cardboard castles with bookshelves stuffed with toys and desks adorned with colorful Mac computers. ‘One of Catmull’ biggest achievements has been the ee- ation of what is called the Pixar Brantrust (see Exhibit 3). This creative group of employees, which includes directors, meets ona regular basis o assess each movie that the firm is, developing and offer their ideas for improvement. Its such emphasis on creativity that has kept Poa onthe cutting ede. Each of their films has been innovative in many respects, including of course making the best possible use of computer animation. “Theyre absolute geniuses,” gushed Jules Roman, ‘cofounder and CEO of rival Tippett Studio. “They're the people who created computer animation really* Catmull has worked hard to build creative innova tion into programs to develop all the employees, who are ‘encouraged to devote up to four hours a week, every week, to further their education at Pixar University. The in-house training program offers 110 diferent courss that cover sub- jects such as live improvisation, creative writing. painting. crawing, sculpting, and cinematography. For many years, a9 ASE 14 PILAR the school’s dean was Randall E. Nelson, a former juggler Inown to perform his act using chain saws so students in “animation classes had something compelling to draw. Becoming Accomplished Storytellers ‘A considerable part of the creative energy at Pixar always, {goes into story development, Jobs understood that a film ‘works only if its story can move the hearts and minds of families round the worl. His goal was to develop Pixar into an animated movie studio known for the quality of ts story telling above everything else. "We want to create some great sfories and characters that endure with each generation,” Jobs stated” For story development, Pixar relies on 43-yearold John Lasseter, who goes by the title of “vce president ofthe ere- ative.” Known for his collection of 358 Hawaiian shirts and his irrepressible playfulness with toys, Lasseter has been the key to the appeal ofall of Pixar’ films. Lasseter gets very passionate about developing great stories and then harnessing computers to tell these stories. Most of Pixar's employees believe itis this passion that has ensured the string of commercial hits. Laseter is widely regarded as the Walt Disney forthe 2Ist century.Escatmall sot aseter Presider, rodacer exHieiT 3 as et rate fer pad ecto, wnter Sample ct Roles iad Bid Business manager Pete Doctor recta wer aoe es oi redicton designer na Prediction designer ees Production design at det, characte designer in An decor oe Character cesier set dese nate pater ii ‘Shading at recto, dg pointer Cater ese seta Joy Souster Character and eminent designer Sure Fear When is time to start a project, Lasseter ioltes a aroup of eight oro writers and dtets them to age abut the constraints of technology, The group bounces ideas off cach othe, taking collective responsibility for developing a sory. While many stuios try to rush fom setpt ope. duction, Lasseter takes up to two yeas jst to workout al the details. Once the script has ben developed tists cre. ate storyboards that connect the various character tothe developing plo. "No amouat of great enimaton i going to save aba sto” he said. “That's why we goo for to make itright ‘Only after the basic story has been set does Lasseter teint think bout what hel ned fom Psa’ technolo Biss, And is always more than the computer animators expect. Lasseter, for example, demanded that the erowds of ants in 4 Bug’ Life nt be a Single mas of lookalike faces. To solve the problem computer expert Wiliam T Reeves developed software that randomly applied physical and émtional characterises wo each ant. In another insane, writers brought a model of @ buterly named Gypsy to researchers, asking them to write code so that when she rubbed her antennas, you could see the hairs press down and pop backup. ‘Atay stage during the process, Lasster may go back to povential problems that he may se with the story. In 4 Burs Lif, for example, the sory vas totally evamped aftr more than a year of work had been complete. Orginal, twas, about a troupe ofcireus bugs run by PT Fle that ties rescue a colony of ans from marauding grasshoppers. But Because of a flaw in the sory—Wwhy would the circus bugs Fst ther lies to save stranger ans?-codirector Andtew Stanton recast the story to be about Flk, the heroic ant ‘who recruits Flea’ troupe to fight the grasshoppers. "You hhave to rework and rework it” explained Lasseter. “Its not tare fora scene tobe rewritten as much as 30 times. Pumping Out the Hits In spite ofits formidable string of hits, Pixar has had dit ficulty in stepping upits pace of production. Although they ‘may cost 30 percent less, computergenerated animated films take considerable time 10 develop. Because of the desired emphasis on detail, Pixar completed most of the work on afl before moring to the next one, until Catmall and Lasseter decided to work on several projects at the same time. Stil the firm has not been able to release more than one movie a year, ‘To push for increased production, Pixar has built up its workforce to well over 1,000 employees and turned to 4 stable of directors to oversee its moves. Lasseter, who directed Pixar's frst thre films, supervises other direciors Who are taking the helm. Monsters dnc, Finding Nemo, The Incredibles, Rataoull, and Brave were directed by some ofthis new talent But there are eoncerns about the qual ity of directors that Par ean rely upon to turn out high- quality animated fils, Michael Savnerof Bank of America Securities commented: “You can't simply double produc- tion, There sa finite amount o talent" ‘To meet the faster production pace. Catmull has added new divisions, ineluding one for development of new mov- iesand one to oversee movie development shot by shot. The cightperson newmovie development team has helped t0 generate more ideas for new films, “Once more ideas are CASE 14: PAR C89EXHIBIT 3 Es Cotmuit President, producer John Lasseter Chit creative oficer, producer, tector, wer senete of Rilee Jin Mors Busnes manager Brad Bie Director, writer Pete Doctor ret wer Horley Jessup Production designer Bit Cone Production designer ficky News Producten designer a ret character designer ph Eolsion ieee Randy Barrett Character designer, set designer, matte painter Taxcoter Shing art det pier B00 Psy Coaracte desoner htc st Jay Sse orate nd envenent eset a ‘When it's time 10 start a project, Lasseter isolates a group of eight or so writers and directs them to forget about the constraints of technology. The group bounces ideas off each other, taking collective responsibility for developing ‘a story. While many studios try to rush from seript to pro- ‘duction, Lasseter takes up to two years just to work out all the details. Once the script has been developed, artists cre: ate storyboards that connect the various characters to the developing plot. “No amount of great animation is going to save a bad story.” he said. “That's why we go so far to make itright!* Only after the basic story has been set does Lasseter ‘begin to think about what he'll need from Pixar's technolo- gists. And it's always more than the computer animators expect, Lasseter for example, demanded that the crowds of, ants in A Bug's Life not be a single mass of lookalike faces. To solve the problem, computer expert William T. Reeves developed software that randomly applied physical and ‘emotional characteristics to each ant, In another instance, writers brought a model of a butterfly named Gypsy 10 researchers, asking them to write code so that when she rubbed her antennas, you could see the hairs press down, and pop back up. ‘AL any stage during the process, Lasseter may go back 10 potential problems that he may see with the story In A Bus ‘Lif for example, the tory was totally revamped after more ‘than a year of work had been completed. Originally, it was about a troupe of eicus bugs run by PLT. Flea that tries 10 rescue @ colony of ants from marauding grasshoppers. But because of a flaw in the story-why would the circus bugs risk their lives to save stranger ants?—codirector Andrew Stanton recast the story to be about Flik, the heroic ant who recruits Fle’s troupe to fight the grasshoppers. “You have to rework and rework i.” explained Lasseter. “Its not rare fora scene to be rewritten as much as 30 times.~* Pumping Out the Hits In spite ofits formidable string ofits, Piar has had it Telly in stepping up its pace of production, Although thes may cont 30 percent fess, computergenerated animated fms take corsiderable time to develop. Because of the {eure emphasis on deta, Par completed most of the work onlin before moving to the next one. until Catal and Lasseter decided to work on several projets at the Same ime il the firm has nt been able to eease more than one movie a yea, "fo push for increased production, Pasar has built op its workforce to well rer 1,000 employees and turned io a sable of directors to oversee is moves, Lasseter, who flected Psa’ ist three films, supervises other directors wo ae taking the beim, Monsters tn, Finding Nemo, Tie Incredibles, Retaouile, and Brove were directed by some of this new talent. But there are concerns about the qua ity of eretors that Pinar can rely upon to turn out bigh- ‘sly animated films. Michael Sayer of Bank of America Secures commented: “You ean simply double produc tion, There is a finite amount of talent.”"” ‘To meet the faster production pace, Catmull has added new divisions. including one for development of new mo¥- ies and one to oversee movie development shot by shot. The tightperson newimovie development tam has helped 0 fsenerte moe ideas for new films. "Once more ies are CASE 14 = POR C89percolating. we have more options to choose from 30 no ‘one artist i feeling the weight ofthe work! on their shou! ders* said Sarah MeArthut, who served as president of production," ‘Catmull keeps pushing technology to improve the qual lity of the animation. During the production of Brine, for «example, the animators had to make the eurty air ofthe ‘main character appear to be natural, Claudia Chung, who worked on the film, talked about their reaction to various ‘methods they kept trying: “We'd kind of roll our eyes and: say,“ guess we can do that bu inside we were all excited, because it's one more sireich we can do." AL the same time. new animation software, Luno, has allowed the use ‘of fewer people. with no more than 100 animators working ‘on each film, The high standards ofthe firm cannot be compromised for the stke ofa steady flow of films. This was evident in their decision to delay the launch of The Good Dinosaur ‘because they fl that they had to rethink the film, Everyone at Pixar remains committed t0 the philosophy that every ‘one of Pixar's films should grow out of the very best efforts ofthe firm's animators, storytellers, and technolo. fs. “Quality is moe important than quai” Jobs had ‘emphasized. “One home run is better than two doubles” Catmall works hart to retain Pixar's commitment to quality even as it grows, He uses Pixar University to-encour age collaboration among employees, and to instil the key values that are tied to Pixar's success. And he has helped devise ways to avoid collective burnout. A masseuse and a ‘doctor now come by Pixar's campus each week, and anima- {ors must get permission from their supervisors ifthe want to work more than $0 hours a week To Infinity and Beyond? (ver ine the individual behind the success of Pa have only become more instrumental. Afer it acquired Pia Disney paced Catml and Lasseter in charge ofthe com bined animation business of both Par and Disney. Two ofthe films that were nominated inJanary 2017 for Best “Animated Fim, Moana and Zoot, were both made a Disney under the supervision of these Phar heads. For Laster, the new responsibilities for Disney repeat return to his roots, He had been inspired by Disney films fs kid and he started is career at Disney before being lured away to Pixar by Catal. For many of wat Par, vas the magic of Disney that influenced us o purse our dreams of becoming animator, artis, stole and filmmakers,” Lasseter remarked. ‘Something that had to beads © was the loss of Jobs, who passed ava in 2011 tthe se ine, exerone at Par understands that thir suces canbe attributed (90 CASE 4 POR is able to recruit and train to to the new talent the fi ‘work together. Ths recognition leads to a culture of con- ous exchange of ideas and fosters a collective sense of responsibility om all their films. "We created the stuio we ‘want to work in.” Lasseter remarked. “We have an environ ment that’s wacky. W's creative bran trust 1 nota place ‘where I make my movies=i'sa place where a group of peo ple make movies." Pisa’ string of successl films is particularly striking, tiven that there has been a considerable increase in the number of animated films released each year. Over the pas, decade there have been years when as many as 16 films have ben offered, as more and more studios have grabbed for a share ofthis hicrative market, The growth in competition has Jed to string of losses at Dreamworks Animation, Pix largest competitor. Lasscler welcomes the competition because it frees Paar to stick (0 is commitment to quale ity. “ike healthy competition,” he says. "id rather be in a heathy industry than be the only player a dead industry." Tink shout hw of puting a movie aboot repring fo old be, or how risky must've Seemed to start movie about robots wth 39 dialogue. fee minutes, We dare to ater these stories ut se dont et hem ght onthe fst pas. This is as it sho be Ed Caml from Ws book, Creat, ne. (ublished n 2018 ENDNOTES 1 Chace Solomon. Paar rene Ch Sok Retr the sy Mae Seok Tne Bay 28.208.» Co 2 Dani Mile. Par Fla Dea Lends Las, Los Ages Tes November 3,200». B. 3. Pr Brows an Ronald Grae. See Jobs Moi Moga. ‘Bodesser, Noverber 2, 199% 150 i St pte ts 7, Mar Grr Pr Ra Raced Gs. iri, seer 2, 1999p. 1 Ne Hit Tins, October 18,201, pC 9 Barns an Genet cr, November 23,1989 10, Anew Bary Coy Sy Burn, Oster 13, 2003, p 2 1, Dania einan. Bane Going Weve Par Aination Tech Hat Neve Gone CNET Att Ie 1,20 12, Puig Ta, Wt Quan Ha Pars Quali? al Smet dma Fete 5200198 18. arrows and Ror Grove See Jy’ Magi King, asset, eeu 6,200.66 1, Soom. New Hn Tins at 2S, 2006. 15, Bary. Burs tbe 13,20» 2, "6. 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