Walt Disney and Toy Story

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Pixar and Disney: A Study of Creativity and Culture
In 2005 the managers of Pixar Animation Studios were facing a crisis. The company’s ten-year partnership with Disney was about to end and the company had three options: draft a new agreement with Disney, find a new partner, or set up their own marketing and distribution network.[1] Renewing the partnership with Disney seemed, to many, like an obvious choice. The arrangement had been a boon to the fledgling studio when it was first starting out. Disney had provided most of the funding[2] and had given Pixar’s movies top flight marketing support[3] in exchange for ownership of Pixar’s characters and a substantial percentage of the profits. Pixar had grown, however, and had accumulated enough funds to finance its own films.[4] Forty-five percent of the operating income for Disney’s film operations came from the sale of Pixar’s movies, and Disney’s own marketing research showed that mothers trusted the Pixar name more than Disney.[5] A study of box office receipts revealed that four of the ten top-grossing “Disney” movies in the history of the company (including live action films) had been Pixar products. Pixar’s Finding Nemo, released in 2003, was the highest grossing film ever released under the Disney banner though Disney’s own studios had not produced the film. It had broken the record formerly held by The Lion King.[6] Disney’s executives, however, had refused to “give” on a number of important issues, and Pixar’s managers had given up on trying to negotiate with them in 2004.[7] They were preparing to walk away from their beloved characters and start over when Michael Eisner resigned from the CEO position and Bob Iger took over.[8] Steve Jobs, Pixar’s chairman and CEO, had dealt with Iger when he was at the helm of ABC television. The two of them had worked out the revolutionary arrangement of making episodes of ABC’s most popular shows available to iPod users right after they had aired.[9] Jobs met with Iger to discuss the future of the Disney-Pixar relationship. Iger told Jobs he wanted to purchase Pixar outright and make it a permanent part of Disney. After a long discussion, Jobs came away favorably impressed with Iger’s leadership style and was convinced that Pixar should seriously consider Disney’s offer. He arranged for John Lasseter, the head of Pixar’s animation studio, and Ed Catmull, who was over the company’s computer graphics area, to meet with Iger separately. They agreed to the meetings, but Lasseter was skeptical.[10] John Lasseter:

As a young person, John Lasseter had been greatly impressed by Disney studios. It was a library book about Disney animation that had caused him to choose animation as a career.[11] It was the Disney-founded CalArts animation school that had given him his education as an animator.[12] Lasseter had been elated, following his graduation from CalArts, when Disney’s animation studio had hired him. The glow had faded, however, when he realized that the leaders of the studio were not interested in his ideas about how to make things better. Instead of welcoming the youthful enthusiasm of the younger animators they hired, they seemed to resent it.[13] Lasseter’s infatuation with the growing field of computer animation had apparently proven to be too much. Disney Animation had fired him.[14] Though Pixar’s partnership with Disney had proven to be a boon for both companies, Lasseter did not completely trust the entertainment giant. He had, after all, ended negotiations with them the previous year and was certainly not enthusiastic about having his company placed under the Disney “umbrella.” As far as he was concerned, Disney had mishandled everything they had acquired in the past decade. They had, in essence, ruined everything they touched, and he did not want them ruining the company he had poured so much of his own life and creative energies into.[15] How had “The House that Walt Built” gotten so far off track? Disney’s...
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