Pixar Animation Studios
Pixar has a very interesting early history. It began in 1979 as the Graphics Group, which was one third of the Computer Division of Lucasfilm[->0]. After moving to Lucasfilm, they worked on creating the precursor to RenderMan[->1], called REYES, meaning "renders everything you ever saw" and developed a number of critical technologies, including "particle effects" and various animation tools. After parting ways with Lucas film, Pixar became a corporation in 1986 with funding by Apple Inc.[->2] co-founder Steve Jobs[->3], who became its majority shareholder. The Walt Disney Company[->4] bought Pixar in 2006 for $7.4 billion, which made Steve Jobs Disney's largest shareholder. Pixar started as a high-end computer hardware company whose core product was the Pixar Image Computer[->5], a system mostly sold to government agencies and the medical community. One of the buyers of Pixar Image Computers was Walt Disney Studios[->6], which was using the computer as part of their secretive CAPS[->7] project. Using the machine and custom software, written by Pixar, to change the long hard work of the ink and paint part of the 2-D animation process to a more automated and faster method. The Image Computer never sold well. As poor sales of Pixar's computers threatened to put the company out of business, Jobs invested more and more money and took more and more ownership away from the management and employees until after several years he owned mostly all of the company for a total investment of $50 million. John Lasseter's animation department began producing computer animated commercials for outside companies. Early successes included Tropicana[->8], Listerine[->9], Life Savers[->10] and Terminator 2: Judgment Day[->11]. 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, and Lasseter’s animation department, who made television commercials and a few shorts for Sesame Street[->12], was all that was left of Pixar. They then made a $26 million deal with Disney to produce three computer animated feature films, the first of which was Toy Story. In 1994, Jobs thought about selling Pixar to other companies, among them Microsoft. Only after learning from New York critics that Toy Story was probably going to be a success and confirming that Disney would distribute it for the 1995 Christmas season did he decide to give Pixar another chance. He also began then for the first time to take an active direct leadership role in the company, making himself its CEO. The film went on to gross more than $361 million worldwide. Later that year, Pixar held its first marketing[->13] 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 hardest aspect to Pixar and made for a bad relationship. The two companies tried to reach a new agreement in early 2004. The new deal would be only for distribution, as Pixar wanted 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. One of the most important issues was, 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 wouldn't agree to these conditions, but Pixar would not give in. While waiting for the Disney acquisition of Pixar, the two companies created a distribution deal for the 2007 release of Ratatouille, in case the deal fell through, to ensure that this one film would still be released through Disney's distribution channels. Different from the earlier Disney/Pixar deal, Ratatouille was to remain a Pixar...
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