The story behind Pixar Animation studio and what we can learn from it!

Welcome to #3 of Leeds 1888.

Hello to my new readers!

If you've been reading my content for a while, you know I'm a big fan of what’s happening in the media & entertainment space. 

Skimming the surface of 3 ideas each week, I write about-

• Weekly box office chart of best movies worldwide

• Weekly news in the media & entertainment space, and

• A deep dive into an interesting story

Let’s get started:

 What occurred in media and entertainment this week?

1. RRR' nominated for Golden Globe best picture non-English language and best original song- "RRR", a pan-India blockbuster, will face off with Korean romantic mystery film "Decision To Leave", German anti-war drama "All Quiet on the Western Front", Argentine historical drama "Argentina, 1985", and French-Dutch coming-of-age drama "Close".

2. Golden Globes: Disney Empire Leads With 17 Noms, Including Searchlight’s 12-Among big studio releases at #disney, James Cameron’s Avatar: The Way for Water, which opens in cinemas this week, will vie for best picture, drama, and best director, while Marvel’s Black Panther: Wakanda Forever will compete for best supporting actress (Angela Bassett) and best original song (“Lift Me Up”).

3. Lionsgate unveils its biggest-ever theatrical slate for India- Talking about the theatrical releases in India, Rohit Jain, MD, Emerging Markets Asia, Lionsgate, said, “The theatre business is on an upswing with consumers stepping out to experience good content. It’s our constant endeavour to create edgy and contemporary content. With several big-ticket theatrical releases planned across dubbed languages, Lionsgate is looking at a jam-packed 2023 catering to the masses.

4. MX Player sees 4X growth in subscriber base due to original series 'Dharavi Bank'- With a No. 4 rank in the most anticipated list of IMDb shows before launch, Dharavi Bank has garnered a massive 9+ rating on IMDb. The platform pulled out all stops with a high-decibel marketing campaign and received a cumulative reach of over 200 Mn across YouTube, Facebook, Digital impact, and DOOH, in less than 10 days.

5. Marvel's VFX is 'not even close to Avatar 2, says Cameron- Ahead of the theatrical release, James Cameron dismissed Avatar 2's VFX comparison with Marvel movies. In an interview, the director said Marvel's VFX is 'not even close' to Avatar 2. Both Marvel and Avatar use extensive motion capture technology.

6. Wonder Woman 3 plot details indicate DC might’ve been right to cancel this one- The threequel supposedly would’ve seen Diana resurrect Steve Trevor yet again, via one of the League of Assassins’ Lazarus Pits this time. Considering Steve’s nonsensical comeback was one of the most-criticised aspects of WW84.

7. RRR sets another milestone, becomes highest grossing Indian film at Japan box office- RRR is standing true to its name – Rise, Roar, Revolt as it’s creating a rage across the globe. Transcending the borders of culture, continents, and parlance, RRR realised yet another breakthrough and that too in Japan with Rs 24.20 crore at the end of 8th weekend in Japan.

Worldwide Collection of Best Movies

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And in the story of the week, we will now discuss the story of the biggest and most successful animation studio of the world-

How did Pixar become so successful?

Pixar was one of the leading digital animation studios in the US. 

As of January 2004, Pixar had created and produced five animated feature films

• Toy Story

• A Bug''s Life

• Toy Story 2

• Monsters Inc, and

• Finding Nemo

which were marketed and distributed by The Walt Disney Company. 

All of these were blockbusters, which grossed a total of $1.2 billion, with an average of around $200 million per film. 

Let's see how Pixar had built up a brand image for itself.

Do you know the person behind this successful venture?

It’s the same man whose company has achieved the feat of entrepreneurial success in the tech arena. Yes, we are talking about Apple.

And the man behind both Pixar's and Apple’s success is none other than Steve Jobs.

How did Steve Jobs create Pixar?

The story of Pixar is not all hunky dory. It had its ups and down.

Let’s get started.

It was in 1985 when Steve Jobs was forced out of Apple.

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Looking for other time-worthy opportunities, he landed at the Graphics Group.

Graphics Group was part of Lucasfilm’s computer division back then that helped with special effects on movies like Star Wars.

Once those projects ended Lucas had no need of that technology. 

Lucas was ending his business. It was Jobs who bought it in 1986 for $10mn. 

What difference did Jobs make?

Instead of searching for potential clients to buy his services, Jobs started selling the hardware responsible for generating computer imagery to other companies. 

That’s how Pixar was invented. 

They had been developing a super advanced computer with the sole purpose of generating high-resolution 3D images called the Pixar Image computer.

But all was not well. 

At the time, animation studios like #disney  weren't interested in the technology. Artists feared that the new technology could replace them in the workplace. 

So the machines were instead marketed for use in medical science, geophysics & meteorology. 

But thanks to its $135,000 price tag, sales were few and far between.

There were two more generations of the computer that eventually lowered the cost to $30,000. 

But even after years of promotion only 300 Pixar Image Computers could be ever sold. 

Jobs found himself in a difficult position. 

He was tied up in a company which was causing him tens of millions to operate with no signs of profit.

What changed?

Jobs actually admitted that if he had known how much Pixar would cost to keep running he would never have bought it to begin with.

Luckily, one of Pixar’s founders, John Lasseter, was coming up with a strategy of his own.

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Pixar executives Ed Catmull, Steve Jobs and John Lasseter

Lasseter worked on several short films that use 3D animation Technology.

Like Luxo Jr, which earned an Academy Award nomination for Best Animated Short Film and Tin Toy which became the first animated short film to win an Oscar.

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Tin Toy

The changing moment was now

Jobs then recognised the potential of Pixar’s own employees.

He realised that they didn't have to sell their animation technology to established movie studios.

They could simply create the content themselves and that's exactly what they did. 

Jobs sold Pixar's hardware division to Viacom systems for $2mn. Although Viacom went out of business just a couple of years later. 

Jobs focused on generating income through short films and commercials. All the income from these products was still not enough to recoup the company's operating cost.

Then came the most important deal in Pixar’s history

That's when Jobs made the most important deal in Pixar’s history. 

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Bob Iger with Steve Jobs at an Apple event in 2006

He helped negotiate a $26mn contract with #disney to produce Pixar’s first three feature-length films.

This was a surprising turn of events as #disney wasn’t previously interested in utilising 3D animation for movies.

What made Disney change its mind?

Many speculated that, through Pixar, #disney could safely test the concept and observe the audience response before implementing such technology into their own films. 

Pixar’s creative team immediately began work on the first movie called Toy Story.

Good days were near

Jobs also hired a chief financial officer Lawrence Levy to organise a corporate restructuring in preparation for a public offering, where people could begin buying shares in the company.

Jobs set the IPO’s date soon after the Thanksgiving release of Toy Story. 

It meant that if the movie ended up being successful so would the company but if it was a flop, the movie would go down too. 

It was a high-risk reward bet, but one that was necessary in order to transform Pixar from a hobby that caused millions to a viable company that could finally generate a profit.Add alt text

Luckily, Toy Story ended up making $30mn in its opening weekend alone and eventually $365mn globally. That meant Pixar’s IPO would also be successful since the stock was in high demand. 

It was after its first day of trading ,Pixar closed at $39 per share amounting to a total valuation of $1.5bn.

The company had finally achieved profitability.

That was just the beginning for Jobs. 

Pixar was still losing out on all of the licensing revenue their movies earned.

Jobs renegotiated a new five movie contract that played the cost and profits equally between Disney and Pixar allowing Pixar to generate even more revenue.

After that contract expired in 2002, Jobs again set out to leverage Pixar's success to negotiate an even better deal with #disney but then CEO Michael Eisner didn't agree to the new terms.

It prompted Jobs to publicly announce that Disney and Pixar would be ending their partnership.

Although in 2005 the situation changed.

Disney signed Bob Iger as their new CEO. Iger recognised that Disney's animation division was faltering as has been shown up by the movies like Finding Nemo And The Incredibles.

The fastest way to bolster Disney's animation was to simply acquire Pixar.

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That’s when the historic $7.4 bn deal took place between Disney and Pixar in January 2006. Pixar was sold off to Disney.

That meant Jobs would no longer serve as the company's CEO.

But,

Jobs would have a seat on Disney's board of directors and a 7% share in the company,

which made Jobs #disney's single largest shareholder.

 During Jobs' darkest days, the period after being forced out of Apple, he ended up doing the impossible, starting a company that would secure him a position in one of the most valuable companies in the world-Disney.

It was really an unbelievable turn of events and really gives credence to the Winston Churchill quote “if you are going through hell keep going.”

That's all for today!

And if you've got a moment, I’d love to hear what you thought of this edition of the newsletter. 

I read each of your replies.