o Should Pixar seek a better distribution deal outside of Disney? o Can it seek a better deal with Disney?
John Pongsajapan Xin Ye
SPRING 2005 BEM 106 FINAL PROJECT
In 1986, Steve Jobs purchased the computer graphics division of Lucas Films Ltd. for $10 million and established Pixar Animation Studios. Since its inception, Pixar established itself as a leader and innovator in computer animation. Its first animated short films garnered many film awards, most notably The Tin Toy, which won the Academy Award for Best Animated Short Film in 1989. In 1991, Pixar entered into a three-picture co-production deal with Disney. Following the success of Toy Story, this relationship was extended to include three more pictures. A string of blockbuster hits followed, each film doing better than its predecessors. A Bug’s Life was the highest grossing film of 1998. Toy Story 2 became the highest grossing animated movie of its time in 1999, later topped by Monsters, Inc. in 2001, and then by Finding Nemo in 2003. On January 30, 2004, it was announced that Pixar and Disney had failed in their negotiations to extend their contract beyond the animated film Cars, to be released in 2006. With the stellar success of Finding Nemo, Pixar felt entitled to a more profitable contract with Disney. The new Disney CEO Robert Iger has stated that he will continue negotiations with Pixar. Before Pixar makes its decision on its future relationship with Disney, it should consider its survivability and likely profitability in seeking distribution deals elsewhere. II. Company Analysis • Company History (1) o 1984: Former Disney animator John Lasseter joins George Lucas’ computer graphics group. He will eventually become one the founders of Pixar and its creative director. o 1986: Steve Jobs purchases the computer graphics division of Lucasfilm, Ltd. for $10 million and establishes Pixar. o 1991: Pixar enters into a 3 feature-length...