November 18, 2019 • 44 mins
Pixar got its start as a division of Lucasfilm's Industrial Light and Magic before splitting off under the guidance of none other than Steve Jobs of Apple fame. How did this company known for building specialty computer systems become a juggernaut in the computer animation industry?
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Episode Transcript
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Speaker 1 (00:04):
Welcome to Business on the Brink, a production from I
Heart Radio and How Stuff Works. Pixar's origin story plays
out like, well, like a Pixar movie, full of ups
and downs, drama, and a few unexpected allies. This company
has overcome more than a few brink moments, from lamps
(00:27):
to apples to infinity and beyond. We're going to tell
you all the animated details of this company's evolution. This
is Pixar on Business on the Brink. Hey everybody, I'm
(00:55):
Jonathan Strickland and I'm Ariel Casting. And this is a
suggestion from Nathan in St. Louis. Thank you Nathan for
writing in. It was great to hear from you, and
it's a great suggestion. St. Louis. St. Louis fair enough St.
Louise from good old St. Lou So, Yeah, we're gonna
talk about Pixar, which is I love this topic. It's uh,
(01:20):
it's one of those studios that has produced a remarkable
number of amazing films when you look at like the
percentage of all the films made and plus some other
films that aren't so amazing. Dinosaur, Oh my gosh, we
didn't even plan that guy. But I've I've seen it.
(01:40):
I have not. It's that's why I haven't seen it.
So it's not it's not bad, it's just it's just
not remarkable. That's see. That's the thing is that Pixar
set the bar very high with some of their movies,
and so when things are just good instead of great,
you're like, well, that's a disappointment when it when for
(02:01):
any other studio it would be considered a hit. So
but we're gonna talk more about the founding of Pixar
and how it was never a sure thing that it
was going to become the movie studio that it is. Say,
it didn't even really start as a well, it kind
of started as a studio and it became not a studio,
and then it became a studio again. So yeah, let's
(02:21):
get into that. So the story starts not with John Lassen,
who I think a lot of people associated with picks.
It doesn't start with Steve Jobs or even George Lucas,
who would become one of the key members of Pixar.
It actually really starts with a guy named Edwin E.
Cat Mill, and cat Mill had dreams of working for
(02:44):
Disney as an animator, but he had one major issue,
which is that he really just couldn't get down the
artistic talent for hand drawn animation. Yeah, that's that's kind
of a necessity when you want to be an hand
drawn animator. Yeah. So, and he went into computer science.
He really threw himself into it. He got like advanced degrees,
(03:06):
not just a bachelor's, he got a master's and a PhD. Smart, yeah,
super smart. And he went to grad school and in
grad school in nineteen seventy two he would actually get
the nod to designing a computer animated graphic for a
feature film. And it's a film of a of a
movie you've seen. You've seen West World, right, Yeah, and
(03:29):
I've seen the movie that you're talking about, Future World. Yeah.
Future World is the sequel to a film called Westworld.
The film, Yeah, there was a film before the TV
show guys. Yes, this is the film that inspired the
HBO series. So back in the seventies, we may do
with you, ol Brenner as a robot writing around and
being terrified. I don't know if make do is the
(03:51):
right word to put with you, old Brunner, but it
depends on the movie. I guess he was great in
West World. So Future World was the sequel to West World,
and it had this computer and animation sequence in it.
It actually was Captain Moll's hand. He animated his own
hand into it, and this was the first time that
computer animation would be used in a feature film. Then
(04:13):
he graduated with his PhD and he got contacted by
the New York Institute of Technology to go over there
and to serve as the director of a computer graphics
lab brand New. Yeah, and and that's where he met
his cohorts for the eventual Pixar. Yes, the alv Ray
Smith is one of those, in fact the probably the
most important of the ones, who also had a PhD
(04:35):
in computer science. He had uh was he's a little
bit older than Catmill, but he had also worked at
xerox is Park Research Center. Park is the p A
r C. That's the same research center where stuff like
the first graphic user interface, the first computer mouse, like
all that kind of stuff grew out of there. Although
to be fair, the computer mouse actually came from somewhere
(04:56):
outside of Park but got adopted. You get where I'm going.
That's funny because Steve Jobs will them into our story
later here, and Steve Jobs in Park have a tenuous history, yes,
because Steve Jobs got to tour Park and then stole everything. Yeah. Yeah,
I think we talked about that a little bit in
our Zerox episode. I think he also met David Di
Francesco and Ralph Guggenheim there. Yes, both of them would
(05:18):
become founding members of Pixar as well. So they all
are working at this this computer graphics lab together when
a a certain independent filmmaker came knocking at the door.
That independent filmmaker was George Lucas. Yes, he said, I
am your employer, Yeah he was. He was putting together
(05:42):
a little, little little special effects studio called Industrial Light
and Magic. Just a little studio, yeah, right right up
there with Wetta. You know, there's one of the big
ones out there. And so George Lucas being George Lucas,
he wanted to get the best people in the world
to work on this. And computer effects were like new, Yeah,
(06:03):
they were like unheard of. So he was going for
the cutting edge, the bleeding edge of that technology. And
he recruited Cat Moll to come in and head up
the computer division of Industrial Light and Magic. And Cat
will being you know, familiar with the work of his
colleagues reached out and essentially plucked them all up to
(06:24):
be part of this group, thus gutting the computer graphics
division over it. Yeah yeah, no, but smart move on
on George Lucas's part, and smart move on Cat Moll's part. Yep.
So their original work was mostly to make computer animation
not like computer animation, which is understandable, like you're trying
to make it. We see that today too, to say
(06:45):
it's something that we still struggle with. You know, I
think when you said he originally animated his hand, Yeah,
like I've dabbled in drawing hands of the hardest part
for me on two D animation. So, but I think
on three D animation to actually melts away and hair
and hare's another big one. Yeah, it's and eyes too, right,
(07:07):
like you look at something like Polar Express, which is
not a Pixar film and who you can just get
those dead eyes. Okay. So they're trying to make their
computer animation not look like what it was, yeah, which
is again like you see action movies that have like
the the c g I blood spray if someone gets
shot and it's always incredibly obvious. They wanted to try
(07:27):
and create new stuff, and so they also had to
do things like figure out, well, how do we work
around the fact that computer animation is super clean, right,
Like it's all virtual. It's not a real camera you're using,
but real cameras when you're shooting on film, if you
move the camera, you get blur, right, because cameras are
(07:47):
just taking a series of photographs super fast. So they
actually one of the things I had to figure out
was how do we make blur in the computer graphics
effects so that it looks like it's actually they're on
film as opposed to an effect you just eat a
greasy burrito and then you wipe your finger across the screen. That's,
oddly enough, exactly not what they did. So they're working
(08:08):
on this stuff and there really isn't much for us
to comment on other than they were they had steady
work in industrial line, okay, so let's get ahead to then. Sure,
that's when cat Moll would hire on a contract worker,
so not full time yet. This guy was named John Lastener,
still his name, John Lsener, who had previously worked as
(08:30):
an animator for Disney, so exactly what kat Moll wanted
to do. Yep. And the thing that Lastener had encountered,
at least according to most stories, is that he wanted
to introduce computer animation to Disney features but just encountered
a lot of resistance. So he was eager to try
those skills somewhere else, and he thought the Industrial line
(08:53):
Magic would be the place to do it. Yeah, and
he did by he was a full time employee, and
he had the title of interface designer. Yeah, because they
didn't technically have an animator position, so that was the
closest that they could come up with. They would work
on several big motion pictures, including one called Young Sherlock Holmes,
which have you seen. I haven't seen, but I did
(09:16):
look up the scene that you're about to talk about,
where uh they took a two dimensional night I think
from a stained glass window and made him like pop
into the scene and and interact with somebody. And it's
it's interesting because they definitely got the look of like
going through stained glass. But it's pretty row. Yeah, it's
it's a rough one. It also makes me think of
(09:36):
the animated the c g I intro to Steven Spielberg's
television series Amazing Stories. It was very similar. But yeah,
this was the idea and Young Sherlock Holmes is that
it's a hallucination. The bad guys have these hallucinogenic darts,
and when they shoot you with one, you have these
nightmarish hallucinations that then compel you to commit suicide. Spoiler
(09:59):
alert if you haven't seen Young Jill movies, like four
years old, I think we're outside of the spoiler alert rules.
But anyway, this was the first time they had a
scene where live action actors and a c g I
character would be interacting in the same frame. So that
was that was a new benchmark. Yeah, and to do that,
they needed special hardware to do it. Yeah, they didn't
(10:21):
have like, yeah, no one had built a computer system
for that. So they're like, well, I guess we'll build
our own dan dang darn computer system. And they called
it the Pixar Image Computer. Yes, now this is a Yeah,
this is before they had given a name to the division.
They were still just part of Industrial Line Magic and um, yeah.
(10:41):
The funny thing is, I'm not going to go into specs.
Anyone who knows me from texting you knows I could.
But technically, if you have a smartphone, then you have
a you have a computer more powerful than this thing
was back in its day. But for its time, it
was an incredibly sophisticated computer. Yeah. But then they used
it for more than just entertainment special effects. Yeah. Well,
(11:01):
they figured that in order to get the best return
on investment, they could actually market this computer system for
lots of other stuff, including like medical imaging. So the
idea was, why should we build this computer system, which
will be very expensive, and just use it in house
if we could also market it as its own product
and make more money by selling it to other, you know, organizations.
(11:25):
So they started. It's almost like they were side hustling
as a hardware company, not just as an effects division
within Industrial Line Magic. They're they're kind of making extra bets.
They're hedging their bets. Yeah. And one of their big
early customers for the Pixar Image computer was Disney. Yep,
(11:47):
they are looking at use such a thing, not to
create three D c g I films, No, No, to
digitize their cell animation. And I'm trying so hard not
to go into this tirade about Disney three D animation
versus two because I like the Pixar Disney movies, but
I really missed the Tudi animation. Well, and there was, Yeah,
(12:08):
there was a thing time at Disney. This is outside
the realm of our discussion, really, but there was a
time at Disney where the prevailing wisdom early on in
the Pixar years was that, oh, the audiences love these
movies because they are computer animated movies. And even lasseter
as As, the man who was really heading up that
(12:29):
effort at the time, said, knew, what's most important is story. Story,
and then you know, you determine how you're going to
tell that story. But story is way more important than
whether it's hand drawn or computer animated. Yeah, okay, tie
right off. The system they made for Disney was called
the Computer Animation Production System, nicknamed CAPS, and uh they
(12:52):
actually would still be working on that when the division
would split off from Lucas Film. So why did this
division of Industrial Light and Magic get spun off, Well,
it's because Lucas was having some issues. So but but
(13:14):
I mean, he just did Star Wars. Star Wars was
super successful. He did Return of the Jedi and eighty three,
so he had just had three blockbuster films he had made.
I think I think the right term is a metric
crap ton of money, very scientific, Jonathan, not just not
just off the films, but through merchandizing. That was I mean,
that was one of the biggest money makers that Lucas
(13:36):
stumbled on. That really wasn't as big a thing until
the Star Wars franchise came around. And so this is
a point where you know, you would think everything's going
on great, but Lucas also was kind of looking for
the next next project. Yeah, he didn't have another Star
Wars film. No, so he made an amazing movie called
(13:59):
Howard The I knew you would. I knew you would.
I knew this. Look, it's not a good movie. It's
a horrible movie, but it's an amazing movie. I saw
it in the theater when it came out. It's so
bad it's good disturbing, which is frequent from that film.
Um Leah Thompson's in it, though she's very cute in
(14:22):
that movie. But no, the it's a it's a terrible movie.
And then it bombed. It absolutely bombs. So Lucas had
just had a flop of a film come out. He
was also going through a an acrimonious divorce that was
incredibly expensive. In fact, there's talk about the reason why
Indian and Jones in the Temple of Doom was so dark.
(14:43):
It was partly because Lucas was working out his feelings
about his divorce. Yeah, but it made a really good movie.
Okay movie. And then he so he's he was in
a bad place and he was thinking, well, I don't
have another Star Wars lined up. Howard the Duck was
a total ust. I think I'm going to focus on independent,
smaller films. Uh. And so he decided he was going
(15:05):
to sell off this computer division of Industrial Light and Magic.
So this was a possible point where this whole thing
could have just gone away. Yeah, but thankfully capt Moll
was kind of already preparing for this spinoff. Yes, he
knew that this was coming, and so he had already
started to kind of set the foundation. And Uh, they
(15:28):
decided that they were going to create their own standalone company,
Computer Animation and Effects Company. Uh. They did have one
little problem, which is that no one was really keen
on what to name it. Like, there were a lot
of no one No one had the one idea that
everyone immediately glommed onto. So there was a lot of
(15:49):
disagreement on that. Yeah, apparently one of the names was
gif fix, yeah, g f X for graphics. Yeah, it
was just this. It was just a temporary name. Is
literally something that they had to put in to a
field on a forum. They forgot the R to they
were well and there are a lot of issues with
that particular acronym doesn't make any sense. So they ultimately
(16:12):
obviously decided that they would name their company after the
computer system they had designed. That's why they called it Pixar.
And then they just needed to get somebody to help
fund this because they couldn't they didn't have any money
when they're just getting spun off. They had to find
some sort of angel investor, and they knew just the
(16:33):
guy who could get the jobs done. I don't know
whether they're grown or do you like at Dune done done?
Tell you what, how about we take a break and
you can figure it out. So obviously I was referring
to a very specific person with that angel investor, and
(16:54):
that would be Steve Jobs. And he paid five million
dollars to George A Kiss four Pixar. Yeah, and then
he spent another five million dollars to help fund the
company to get it really situated. Uh. At this time,
Jobs was actually going through his own transition. This was
during the period where he had been effectively forced out
(17:17):
of Apple or he had quit, depending on who you ask. Yeah,
and uh. And so he had gone on to found
a different company called Next and he decided to to
swoop in and generally he was going to be hands off.
He was going to leave the running of the company
to cat Moll and to Smith. They were going to
(17:38):
keep going. But he did have majority steak in the company. Yeah, absolutely,
he owned seventy percent of the shares is a private company,
not publicly traded, but seventy of the shares of the company,
and then the Pixar employees owned the other thirty percent.
That will be important later in our episode. Yeah. He
also decided that he wanted to really that Picks are
(18:00):
up to be a computer hardware company, so all of
that imaging stuff they were looking at unless the animation
studio side, and we all know how that went eventually. Yeah.
So this was this was largely a practical kind of determination,
the idea that computer animation was not quite at the
(18:21):
level of sophistication where you could make, say a feature
link film that you had people like Lasseter who wanted
to do it. There were a lot of people at
Pixar who wanted to do it, but they had all
determined that as the technology stood at that moment, it
just wasn't really possible. Yeah, but I mean they didn't
give up animation entirely. Lester still made shorts which were
then used as um kind of just like a sales pitch. Yeah,
(18:46):
like a sales pitch system exactly. They said, well, yeah,
you want to know what's possible with this computer, here's
some animation that we designed using this computer. So it's
kind of like a demo. But you know, obviously Laster
being Laster, he wasn't gonna just do you know, a
bouncing ball or something that would play a part of it,
(19:08):
especially in the first one, and that would be uh
Luxo Jr. Where we got the little lampy guy that
you see jump on the eye on the Pixar and
it smushes the eye and it's now the eye exactly.
I said, I wait, I I but yeah, Alexo Jr.
That's They would later go back and sort of remaster that,
(19:29):
but that became one of the early pitch films that
they would use. And it also really kind of helped
set Pixar's kind of aesthetic and tone, like there's this
sort of cheeky humor that tends to be in Pixar films,
and that was that was evident even as early as
six when they designed this short. Yeah, it also got
(19:53):
nominated for an Academy Award. Yes, it did not win
that Academy Award, but it was nominated. And then in
nineteen eight, just two years later, uh, they got another
Academy Award nomination for Best Animated Short Film, and that
film was called Tin Toy t I N Yeah not
t E N Yeah t I N toy and a
(20:14):
little It's a Little Tin Soldier and that one did
win the Academy Award. It's also another adorable film that
got remastered later on, and it would become the inspiration
for a future Pixar mega blockbuster hit. Yes. Uh, In nine,
we got another short from Pixar. Yeah, knick Knack. This
(20:34):
is another one that got remastered and re released actually
as one of the shorts that would come before a
Pixar feature linked film. I don't think I've actually seen.
This was a little snow globe with the snowman in it,
and he's desperately trying to get over to a It's
like a it's like a little a little souvenir choch
key that you would buy at you know, Hawaii or something.
Oh yeah, I do remember that. Yeah, And so the
(20:59):
whole thing is the snow man's just desperately trying to
get over to this hula girl y. Yeah. So that
was another super adorable short. And that was when some
other very important people to the future of Pixar would
join the company. This was nine. That's when Peter Doctor
and or Pete Doctor I should say, and Andrew Stanton
(21:20):
joined the company. So they're making all these animated shorts,
are getting lots of praise for them, Yeah, but the
business side of things is still struggling. Yeah. They were
not selling enough Pixar Image computers to pay off the
costs of running business. And according to a lot of
(21:40):
different stories, over the years, Steve Jobs collectively poured in
about fifty million dollars of his own money to keep
the company up float. And I would say, like, the
average person doesn't even know that Steve Jobs was involved
in Pixars. I mean, if you if you followed it
early on, you would have heard about him being on
the board of directors and things like that. But yeah,
(22:01):
he was very much the reason why the company was still.
If it had not been for Steve Jobs pouring money
into Pixar, it would not have survived. Yeah, well it
looked like they may not have at that point because
they started getting layoffs and downsizing and uh, you know,
at the same time, Steve Jobs is also struggling with
his company Next. Yeah, Next was not doing well either.
(22:25):
Next had created a very high end educational computer. It
ran for like five thousand dollars a computer, so very
expensive and no big surprise here. That meant that there
weren't that many customers because not a lot of people
are ready to drop five g s on a computer.
And uh, even though people thought that, I think the
(22:46):
elements of the operating system were really really innovative. So
Jobs was having this issue where he's got one failing
business and then another one. That is he's just constantly
pouring money into He sees the potential there, but the
question is can you ride it out long enough for
that potential to pay off? Well, he kind of didn't.
(23:08):
He kind of didn't, So he sold off the computer
hardware division of Pixar that everything that he had set
them up to do with the imaging and and such,
he decided to get rid of it. Yeah, that was
the part where he said, all right, we're gonna focus
on the computer animation side, but we're going to not
worry about producing actual computers anymore. And a company called
Vicom Systems purchased the computer hardware business unit of Pixar
(23:31):
for just two million dollars. That's not a huge turn
on investment there, and Vicom in turn would end up
going into bankruptcy just a year later. So it was
not it was not the the the shot in the
arm the Vicom needed to succeed. Not to be confused
with Viacom. Yes, no, this is Vicom v I c
(23:52):
O M. That's not the same as the cable company.
So the hardware divisions gone, So the animation division just flourished. No, no,
not quite. They still we're not. You're ruining my happy ending.
Well he's gotta have. You gotta have the low point
in act too before you can have the happy ending
(24:12):
in Act three. Al right, continue on, all right, So
here's the low point in act too. Pixar still wasn't
making money and This led to another round of layoffs
and half of Pixar was fired. Fifty of the employees
were let go. One of those was co founder Alvi
Ray Smith, who may have actually just left on his
own after the changes, and he went on to co
(24:33):
found another company called Altamira Software Corporation, which would later
get acquired by Microsoft. He would stick around with Microsoft retire,
So he's out of our story. And Steve Jobs was
not done. He knew that something big and major was
going to have to change soon, and to do that,
he felt he needed to have absolute control of the company.
(24:56):
But here's the problem. He had a majority stake in
the company, but of those shares didn't belong to him,
they belonged to employees. Yeah, so he shut the company down. Yep,
he effectively ended Pixar. Pixar Pixar was no more. He
closed the company. Is this one of those like Barrenstein
(25:18):
Barrenstein issues where we think Pixar exists but it's actually
in another reality, Jonathan, We'll have to answer that question
after we come back from a quick break. Okay, so
we're back and spoil alert. We know the Pixar comes
back to because obviously the movies came out. Something had
(25:38):
to happen, right, But it is true that that Steve
Jobs he shut Pixar down. Then he decided to start
a new company, a brand new company called rex Raxip.
Neither of those that was I was trying to say
Pixar back backwards. No. He he named the company Pixar. Yes,
and then he hired back all the people who had
(26:01):
been with Pixar just before he shut it down. Yeah,
but he didn't give them their shares back. No. No,
he would be the only one to hold the shares. Now,
if I were employee, I'd be a little upset. So yeah,
he shut down the company and then reopened the company,
and now it was wholly owned by Steve Jobs, and
the employees had no shares. Yes, And so then he
decided to sell this company that he shut down or
(26:23):
he considered it shut down and reopened. Yeah. He was thinking, well,
now I owned the company, so no one can stop me,
and I might be able to make back some of
that fifty million dollars I've been pouring into Pixar for
the last several years. So he started looking around at
the possibility of another buyer. But while doing that, another
opportunity came through the door. Yeah, they landed a twenty
(26:46):
one million dollar deal with Disney for Toy Story, not
just Toy Story, for five films. So that was where
the real issue would come in. The original deal was
to create three films. You're right, that was the original deal.
So the original deal with three films, and it was
a twenty one million dollar like up front and then
they would get a certain percentage of profits afterward, but
(27:09):
it was a very small percentage, as we will see.
So it was definitely something that the company needed, Like
the company needed that money. But if you look at
that deal and you think twenty one million, that's like
seven million dollars per film. Yeah, it's not. I mean
when you think about what film budgets are, especially by
(27:29):
today's standards, which of course, you know this was twenty
years ago or so even then, like an animated film,
I mean, that's nothing. So it's it is one of
those things where it's it was it opened the door
to Pixar, but it could have also spelled the end
of the company. So they decided that they would make
(27:50):
this film about toys that was inspired by the Tin
Toys short that they had made before and um this
was possible largely because Disney was looking at the possibility
of funding animated films that the company itself wasn't having
to animate. Yeah. Yeah, I mean they had success with
(28:11):
that with The Nightmare before Christmas in Yes, so so
there was some precedence for this where they the company
Disney was saying, all right, well, we're still producing animation
out of our our two studios, one was in l
a and one was in in Florida, um at laced
until Yeah. I remember going to the animation studio in Florida.
(28:31):
It was great because you could actually I mean I
remember seeing animated cells for things like a labin I
did do and it's great. You got to see like
stuff before it would come out. And then they shut
it down. Yeah. But all this time Jobs were still
thinking about selling the company. Yeah, and then he thought, well,
you know, I could sell it off, maybe even to Microsoft,
which is interesting because you know, Steve Jobs and Bill
(28:52):
Gates and that sort of relationship. Yeah. They they've they've
definitely been on either side of the friends enemies lines
what from each other. And so they decided he said,
you know what, I'll wait, I'm gonna wait a little bit,
see how this goes, because if these films turn out
really well, it'll put me in a better position than
(29:15):
I would have been had I just sold it. At
this point, so toy story ended up slowly taking shape.
I mean, this was the first time that most of
these folks over at Pixar had ever tried to put
together a feature link film, and not everything turned out
the way like the movie we got. It was very
(29:37):
different from some of the concepts they had, which we
will talk about towards the end of this um. So
Lasseter directed it, and a whole bunch of people helped
to write it, including Josh Sweden. Yep, he wrote one
of my favorite lines, which is wind the frog. Yeah. Yeah.
(29:58):
So at this point, Steve Jobs to you know, as
Jones has has decided to hold off and hold on
to Pixar for a while, and he was named CEO,
which was interesting because technically cat Moll was still calling
all the shops. He was just kind of the face man. Yeah.
The idea was that because Jobs was well known and
was a recognized figure in business, that that would add
(30:21):
enough legitimacy to Pixar to give it a stronger market
position like it was all about and I hate this word,
but it was all about optics. Fun. Yeah, But what
was fun was that toy Story. As we all know,
big hit, yeah, enormous hit. It was actually funny story.
(30:41):
I didn't even think about this when I was making
the notes. That was the first film I ever saw
with my wife in a theater when we were dating.
It was and I had the convincer to go see
it because she was like, I don't want to see
a kid's movie. She loved it when yeah, I had
already seen it, and I was like, just trust me,
just trust me, and she trusted me, and twenty two
(31:04):
years later she still won't let me pick the movie.
But here's the thing. Toy Store is a huge hit.
So you think, Okay, now Pixar's rolling in. Yeah, they're
they're past their their struggles. Except that that deal I
talked about earlier, the twenty one million dollars for three films.
Part of that deal was that Pixar's share of the
profits was tiny. It was around fifteen percent of the
(31:28):
profits and everything else was going to Disney, so of
the profits, right, So the movie's box office global box
office was around three hundred sixty million dollars, which you know, again,
you think about today and everyone's like, oh, if it
doesn't hit a billion, I don't care. But back in
the nineties, sixty million dollars, that's like huge take. Yeah,
things were much more reasonable. Yeah, yeah, dollars. It was
(31:51):
a dollar movie and you could get a bucket of popcorn.
But and a song in your hot no, um no.
But they that's the thing is that that they only
got fifteen percent, so Disney's taking the profits essentially, and
so this was tough. But Steve Jobs had an idea, right, yeah, yeah,
he took the company public. He took Pixar public about
(32:12):
Disney obviously, just a week after Toy Story premiered, which
is great timing because everybody's really excited about this new
Pixar movie, the first feature length animated film computer anim
and so you know, perfect timing. Everybody wants in on
that well. And this is also at a lull for
(32:33):
Disney's animation, right, Like Disney had its renaissance with Little
Mermaid and Aladdin and Beauty and the Beast and then
the other films like Pocahontas, Hunch Mulan, those were starting
to be more of a lull, at least as far
as audience response, now that we're not saying those movies
aren't great. Mulan, I like, I like I like Mulan.
(32:57):
I don't like either of the other two, but I
like Mulan, And so that also helped. Like this was
so this was a great move for Steve Jobs. Like
he was like, we're gonna put the company out, make
it public right after this huge success. Everyone's really excited.
It drives up the value of the company. Uh, it
was the biggest I p O in even beat out Netscape,
(33:19):
which was, you know, like the dominant web browser of Yep,
we'll have to do an episode on that. But then,
so the markets when they opened. Before they opened, the
shares were estimated to open up at around twelve to
fourteen dollars. It actually opened at twenty two and it
got up as high as forty six dollars at at
(33:40):
its peak that first day of trading, then settled down
to thirty nine dollars, still an incredible gain considering that
they originally thought it was gonna be twelve bucks of share.
And is this what made Steve Jobs a billionaire? Yes,
this is how Steve Jobs went from being a rich
millionaire to a super stinking rich billionaire overnight. Here I
thought it was all Apple. No, no, it was actually
(34:02):
Pixar that really pushed him into the billionaire club. And
at this point you probably think that, well, I bet
some of those employees are said that they didn't have
their shares anymore. I would be because they were no
longer they weren't going to be billionaires. So the thing
that this did allow Jobs to do is to go
back to the bargaining table with Disney and say like, well,
now Pixars a publicly traded company, we're valued very very high. Like,
(34:27):
our our valuation is incredibly high. Uh, let's talk about
this deal. So the deal, the three picture deal, was
scrapped and a new deal was put in place, and
this time it was a five picture deal that would
last over ten years, so five movies and ten years,
and the profits would be split right down the middle
(34:48):
fifty fifty between Disney and Pixar. So this made, you know,
picks are obviously happier, but also it kind of shut
up some analysts that were saying that Pixar shouldn't be
as value valued as high as it. Yeah, there were
there were people who were questioning whether or not Pixar's
value really was what it seemed to be in that
(35:09):
in that week of the I p O. Because they
were saying, people are really excited because you had one success,
but until you have a proven series of successes, that
doesn't really mean anything. Like you could you could have
a freak home run and then you strike out the
rest of the season. That was what they were saying.
(35:30):
But it wasn't It still wasn't fair. All fairy tale
endings for Disney and Picks are yet. No, No, that
was the early years were rough. So the next film
to come out was A Bug's Life, which I really enjoyed.
It's often kind of grouped in some of the lesser
Pixar films. Then you got Toy Story two, which originally
Michael Eisner, the CEO of Disney, wanted to go as
(35:53):
a direct to video type of sequel. I would have
been fine with that. Laster, however, was not. Yeah, I
love Toy Story too. I like Toy Story. I like
Toy Story three better. No, I like Toy Story two
more than three, but I like I like the original
more than either of those. But you know what, I
like more than either of those myself, What Monsters, Inc.
And Finding Nemo, which came out next. Yes, so he
(36:14):
had Bugs Life, Toy Story two, Monsters Ince Finding Nemo.
But Steve Jobs and Michael Eisner were starting to have
some problems. They were largely disagreeing over which films counted
towards that five picture deal. Yeah, because Eisner didn't want
Toy Story two to go to the theaters, so he
didn't want that to count towards the deal. Yeah. He
(36:36):
essentially said it's a sequel. See girls don't count. Yeah,
the five five picture deals just for totally original I
p and Jobs is like, the heck, did you just
say we didn't say five ideas. Yeah, we said five films.
So by the time Finding Nemo came out, word was
getting around that Disney and Pixar had been holding talks
(36:56):
about perhaps extending this agreement beyond those five pictures, but
that the talks were not going well. And Steve Jobs
actually released a statement and here's a quote quote after
ten months of trying to strike a deal with Disney,
we're moving on. We've had a great run together, one
of the most successful in Hollywood history, and it's a
(37:18):
shame that Disney won't be participating in Pixar's future successes
end quote sadness. But Disney was like fine, and they
tried to establish their own Well, they did establish our
on computer animation studio and they called it Circle seven, Yes,
which never made a movie by the way. No, it
was intended to create sequels to the Pixar movies. Yeah,
(37:39):
the idea being that Disney owns that intellectual property, so
they could turn out as many sequels of Toy Story
and Monsters in Finding Nemo as they wanted without Pixar's
involvement at all. Um. Clearly that would have been rough,
if not disastrous. Yeah. I think of some of the
directive video sequels that Disney has done that have not
(38:00):
been great. There have been something that have been really good.
Line King one and a half is great, but a
lot of the a lot of the ones are not
so hot, and so that raised a lot of concern.
But while this argument was still going on, Pixar was
still making movies for Disney, and the Incredibles and Cars
(38:21):
had come out, and that meant that they were beyond
the five picture deal at this point that they something
had to change. Cars came out in two thousand and six,
and at that point Disney and picks Are we're able
to settle their differences, and that's when Disney made the
announcement that it would acquire Pixar for And this is amount,
(38:44):
an amount that was astonishing when you think about how
close picks Are was to going out of business just
a few years earlier, for seven point four billion dollars. So, yeah,
here's the computer animation studio that was losing so much
money that a millionaire had poured fifty million dollars of
his own money in it just to keep it afloat.
(39:05):
Now acquired for seven point four billion dollars, Jobs would
end up joining the board over at Disney UM and
was an even richer billionaire. Yeah, and you know, you
might be thinking, I thought Disney made some computer animated
movies by themselves, and they did, but that's later on. Yeah,
and it wasn't Circle seven. That was a division that
they formed to do that, and ultimately Circle seven didn't
(39:28):
do that in a gut kind of folded into other departments.
So it was just one of those things where a
company makes a division specifically to do something and then
it just never works out, all right, So we want
to end this episode of some fun facts. Yep. So
here's some of the weird stuff about toy story. The
original version of Woody was not a pole string cowboy. No,
(39:49):
he was a ventriloquist dummy, which is creepy. Yeah, that's
what Michael Eisner said. He said, no one thinks ventriloquist
dummies or anything other than creepy. I don't want to
have a creepy character as the protagonist. Change it. I'm
sure at one point they weren't, but now they are
mainly creepy. It's it's kind of hard. Like most of
the Ventrolak was dummy movies. I've seen cast it in
(40:11):
the form of like possessed dummy all you know, chucky,
but that's all I've watched. Jeff Donoman not gotten scared,
so that's you know, he scares the heck out of me. Anyhow,
Next fun fact, Okay, well, buzz Lightyear was not originally
buzz light you're His original name was Tempest, named after
the classic arcade game. He also originally was aware that
(40:32):
he was a toy. I'm glad they changed that. Well,
apparently the reason why they changed it was that when
Tim Allen came in to read for the character, he
was playing him with such bravado and such like completely earnest,
earnest and not not knowing he was a toy, like
treating it like he is a space ranger. That the
(40:52):
these these the writers were all saying, no, wait, this
is way better. And that's when they made the choice
to fear away from Buzz Lightyear, knowing that he was
a toy um And and the last time fact is
that Toy Starter was kind of it kind of had
snow white syndrome. So they thought it would take eight
animators and it needed thirty three yep. And they thought
(41:13):
it would take fifty three processors and it took three hundred. Yeah.
So yeah, this is is funny because when we did
our episode about Disney uh going into snow White, it
was very much the same thing, right, Like Walt Disney
drastically underestimated how many animators and how much time it
was going to take, and and they underestimated the time
to make Toy Story as well. Yeah, as it turned out,
(41:35):
the reason why they had to go with those three
processors was because rendering each of those frames just took
so much time, and when you think about like a
frame is one of a second. So a full movie,
a feature league movie, has thousands and thousands and thousands
of frames, and when it takes hours to render a
single frame, you then extrapolate that and you realize we
(41:58):
will never finish making this movie. So obviously things have
improved since then. But then also as technology improves, Pixar
tries to push the envelope of how much it can
do with that technology. So it's it's constantly a seesaw
right that they'll animators will come up with a new
way to test the technology to its limits, new technology
(42:22):
will come out and rinse and repeat. Yeah. Well, this
was a really fun topic. Thank you Nathan for requesting
it and and kind of hitting a love of both
Jonathan and mine. Yeah, we loved going back and looking
at this story and again, like it's really interesting to
see how much of it was rooted not just an animation,
but in hardware. Yeah, yeah, which I always appreciate an
(42:44):
aerial's eyes glaze over. No, I do appreciate it. Look,
I like technology, This is just not the place for it. Okay,
fair enough, entirely, Well, what is the place if people
have suggestions to send us for future companies we should
focus on. Well, that place would be our email. In
our mail is feedback at the Brink Podcast Dot Show. Yeah,
and Ariel reads every single one of those. Yes, please
(43:06):
please write in. I love hearing from you guys. It
makes my week. She's so lonely. And if you want
to visit our website, that's The Brink Podcast Dot Show.
We have an archive of all of our past episodes,
so if you've ever missed one, you can go check
that out. You can search to see if perhaps the
company you were thinking of has been covered already, and
if it hasn't, then definitely reach out to us. Or
(43:27):
if it has, but you feel like there needs to
be an update that's legit too. So that's that, and uh,
that's it. I think until next time, I have been
Jonathan Strickland and I've been aerial casting to infinity and
be all business. On the Brink is a production of
I Heart Radio and How Stuff Works. For more podcasts
(43:49):
for my heart Radio, visit the I heart Radio app,
Apple Podcasts, or wherever you listen to your favorite shows.
E
Welcome to Business on the Brink, a production from I
Heart Radio and How Stuff Works. Pixar's origin story plays
out like, well, like a Pixar movie, full of ups
and downs, drama, and a few unexpected allies. This company
has overcome more than a few brink moments, from lamps
(00:27):
to apples to infinity and beyond. We're going to tell
you all the animated details of this company's evolution. This
is Pixar on Business on the Brink. Hey everybody, I'm
(00:55):
Jonathan Strickland and I'm Ariel Casting. And this is a
suggestion from Nathan in St. Louis. Thank you Nathan for
writing in. It was great to hear from you, and
it's a great suggestion. St. Louis. St. Louis fair enough St.
Louise from good old St. Lou So, Yeah, we're gonna
talk about Pixar, which is I love this topic. It's uh,
(01:20):
it's one of those studios that has produced a remarkable
number of amazing films when you look at like the
percentage of all the films made and plus some other
films that aren't so amazing. Dinosaur, Oh my gosh, we
didn't even plan that guy. But I've I've seen it.
(01:40):
I have not. It's that's why I haven't seen it.
So it's not it's not bad, it's just it's just
not remarkable. That's see. That's the thing is that Pixar
set the bar very high with some of their movies,
and so when things are just good instead of great,
you're like, well, that's a disappointment when it when for
(02:01):
any other studio it would be considered a hit. So
but we're gonna talk more about the founding of Pixar
and how it was never a sure thing that it
was going to become the movie studio that it is. Say,
it didn't even really start as a well, it kind
of started as a studio and it became not a studio,
and then it became a studio again. So yeah, let's
(02:21):
get into that. So the story starts not with John Lassen,
who I think a lot of people associated with picks.
It doesn't start with Steve Jobs or even George Lucas,
who would become one of the key members of Pixar.
It actually really starts with a guy named Edwin E.
Cat Mill, and cat Mill had dreams of working for
(02:44):
Disney as an animator, but he had one major issue,
which is that he really just couldn't get down the
artistic talent for hand drawn animation. Yeah, that's that's kind
of a necessity when you want to be an hand
drawn animator. Yeah. So, and he went into computer science.
He really threw himself into it. He got like advanced degrees,
(03:06):
not just a bachelor's, he got a master's and a PhD. Smart, yeah,
super smart. And he went to grad school and in
grad school in nineteen seventy two he would actually get
the nod to designing a computer animated graphic for a
feature film. And it's a film of a of a
movie you've seen. You've seen West World, right, Yeah, and
(03:29):
I've seen the movie that you're talking about, Future World. Yeah.
Future World is the sequel to a film called Westworld.
The film, Yeah, there was a film before the TV
show guys. Yes, this is the film that inspired the
HBO series. So back in the seventies, we may do
with you, ol Brenner as a robot writing around and
being terrified. I don't know if make do is the
(03:51):
right word to put with you, old Brunner, but it
depends on the movie. I guess he was great in
West World. So Future World was the sequel to West World,
and it had this computer and animation sequence in it.
It actually was Captain Moll's hand. He animated his own
hand into it, and this was the first time that
computer animation would be used in a feature film. Then
(04:13):
he graduated with his PhD and he got contacted by
the New York Institute of Technology to go over there
and to serve as the director of a computer graphics
lab brand New. Yeah, and and that's where he met
his cohorts for the eventual Pixar. Yes, the alv Ray
Smith is one of those, in fact the probably the
most important of the ones, who also had a PhD
(04:35):
in computer science. He had uh was he's a little
bit older than Catmill, but he had also worked at
xerox is Park Research Center. Park is the p A
r C. That's the same research center where stuff like
the first graphic user interface, the first computer mouse, like
all that kind of stuff grew out of there. Although
to be fair, the computer mouse actually came from somewhere
(04:56):
outside of Park but got adopted. You get where I'm going.
That's funny because Steve Jobs will them into our story
later here, and Steve Jobs in Park have a tenuous history, yes,
because Steve Jobs got to tour Park and then stole everything. Yeah. Yeah,
I think we talked about that a little bit in
our Zerox episode. I think he also met David Di
Francesco and Ralph Guggenheim there. Yes, both of them would
(05:18):
become founding members of Pixar as well. So they all
are working at this this computer graphics lab together when
a a certain independent filmmaker came knocking at the door.
That independent filmmaker was George Lucas. Yes, he said, I
am your employer, Yeah he was. He was putting together
(05:42):
a little, little little special effects studio called Industrial Light
and Magic. Just a little studio, yeah, right right up
there with Wetta. You know, there's one of the big
ones out there. And so George Lucas being George Lucas,
he wanted to get the best people in the world
to work on this. And computer effects were like new, Yeah,
(06:03):
they were like unheard of. So he was going for
the cutting edge, the bleeding edge of that technology. And
he recruited Cat Moll to come in and head up
the computer division of Industrial Light and Magic. And Cat
will being you know, familiar with the work of his
colleagues reached out and essentially plucked them all up to
(06:24):
be part of this group, thus gutting the computer graphics
division over it. Yeah yeah, no, but smart move on
on George Lucas's part, and smart move on Cat Moll's part. Yep.
So their original work was mostly to make computer animation
not like computer animation, which is understandable, like you're trying
to make it. We see that today too, to say
(06:45):
it's something that we still struggle with. You know, I
think when you said he originally animated his hand, Yeah,
like I've dabbled in drawing hands of the hardest part
for me on two D animation. So, but I think
on three D animation to actually melts away and hair
and hare's another big one. Yeah, it's and eyes too, right,
(07:07):
like you look at something like Polar Express, which is
not a Pixar film and who you can just get
those dead eyes. Okay. So they're trying to make their
computer animation not look like what it was, yeah, which
is again like you see action movies that have like
the the c g I blood spray if someone gets
shot and it's always incredibly obvious. They wanted to try
(07:27):
and create new stuff, and so they also had to
do things like figure out, well, how do we work
around the fact that computer animation is super clean, right,
Like it's all virtual. It's not a real camera you're using,
but real cameras when you're shooting on film, if you
move the camera, you get blur, right, because cameras are
(07:47):
just taking a series of photographs super fast. So they
actually one of the things I had to figure out
was how do we make blur in the computer graphics
effects so that it looks like it's actually they're on
film as opposed to an effect you just eat a
greasy burrito and then you wipe your finger across the screen. That's,
oddly enough, exactly not what they did. So they're working
(08:08):
on this stuff and there really isn't much for us
to comment on other than they were they had steady
work in industrial line, okay, so let's get ahead to then. Sure,
that's when cat Moll would hire on a contract worker,
so not full time yet. This guy was named John Lastener,
still his name, John Lsener, who had previously worked as
(08:30):
an animator for Disney, so exactly what kat Moll wanted
to do. Yep. And the thing that Lastener had encountered,
at least according to most stories, is that he wanted
to introduce computer animation to Disney features but just encountered
a lot of resistance. So he was eager to try
those skills somewhere else, and he thought the Industrial line
(08:53):
Magic would be the place to do it. Yeah, and
he did by he was a full time employee, and
he had the title of interface designer. Yeah, because they
didn't technically have an animator position, so that was the
closest that they could come up with. They would work
on several big motion pictures, including one called Young Sherlock Holmes,
which have you seen. I haven't seen, but I did
(09:16):
look up the scene that you're about to talk about,
where uh they took a two dimensional night I think
from a stained glass window and made him like pop
into the scene and and interact with somebody. And it's
it's interesting because they definitely got the look of like
going through stained glass. But it's pretty row. Yeah, it's
it's a rough one. It also makes me think of
(09:36):
the animated the c g I intro to Steven Spielberg's
television series Amazing Stories. It was very similar. But yeah,
this was the idea and Young Sherlock Holmes is that
it's a hallucination. The bad guys have these hallucinogenic darts,
and when they shoot you with one, you have these
nightmarish hallucinations that then compel you to commit suicide. Spoiler
(09:59):
alert if you haven't seen Young Jill movies, like four
years old, I think we're outside of the spoiler alert rules.
But anyway, this was the first time they had a
scene where live action actors and a c g I
character would be interacting in the same frame. So that
was that was a new benchmark. Yeah, and to do that,
they needed special hardware to do it. Yeah, they didn't
(10:21):
have like, yeah, no one had built a computer system
for that. So they're like, well, I guess we'll build
our own dan dang darn computer system. And they called
it the Pixar Image Computer. Yes, now this is a Yeah,
this is before they had given a name to the division.
They were still just part of Industrial Line Magic and um, yeah.
(10:41):
The funny thing is, I'm not going to go into specs.
Anyone who knows me from texting you knows I could.
But technically, if you have a smartphone, then you have
a you have a computer more powerful than this thing
was back in its day. But for its time, it
was an incredibly sophisticated computer. Yeah. But then they used
it for more than just entertainment special effects. Yeah. Well,
(11:01):
they figured that in order to get the best return
on investment, they could actually market this computer system for
lots of other stuff, including like medical imaging. So the
idea was, why should we build this computer system, which
will be very expensive, and just use it in house
if we could also market it as its own product
and make more money by selling it to other, you know, organizations.
(11:25):
So they started. It's almost like they were side hustling
as a hardware company, not just as an effects division
within Industrial Line Magic. They're they're kind of making extra bets.
They're hedging their bets. Yeah. And one of their big
early customers for the Pixar Image computer was Disney. Yep,
(11:47):
they are looking at use such a thing, not to
create three D c g I films, No, No, to
digitize their cell animation. And I'm trying so hard not
to go into this tirade about Disney three D animation
versus two because I like the Pixar Disney movies, but
I really missed the Tudi animation. Well, and there was, Yeah,
(12:08):
there was a thing time at Disney. This is outside
the realm of our discussion, really, but there was a
time at Disney where the prevailing wisdom early on in
the Pixar years was that, oh, the audiences love these
movies because they are computer animated movies. And even lasseter
as As, the man who was really heading up that
(12:29):
effort at the time, said, knew, what's most important is story. Story,
and then you know, you determine how you're going to
tell that story. But story is way more important than
whether it's hand drawn or computer animated. Yeah, okay, tie
right off. The system they made for Disney was called
the Computer Animation Production System, nicknamed CAPS, and uh they
(12:52):
actually would still be working on that when the division
would split off from Lucas Film. So why did this
division of Industrial Light and Magic get spun off, Well,
it's because Lucas was having some issues. So but but
(13:14):
I mean, he just did Star Wars. Star Wars was
super successful. He did Return of the Jedi and eighty three,
so he had just had three blockbuster films he had made.
I think I think the right term is a metric
crap ton of money, very scientific, Jonathan, not just not
just off the films, but through merchandizing. That was I mean,
that was one of the biggest money makers that Lucas
(13:36):
stumbled on. That really wasn't as big a thing until
the Star Wars franchise came around. And so this is
a point where you know, you would think everything's going
on great, but Lucas also was kind of looking for
the next next project. Yeah, he didn't have another Star
Wars film. No, so he made an amazing movie called
(13:59):
Howard The I knew you would. I knew you would.
I knew this. Look, it's not a good movie. It's
a horrible movie, but it's an amazing movie. I saw
it in the theater when it came out. It's so
bad it's good disturbing, which is frequent from that film.
Um Leah Thompson's in it, though she's very cute in
(14:22):
that movie. But no, the it's a it's a terrible movie.
And then it bombed. It absolutely bombs. So Lucas had
just had a flop of a film come out. He
was also going through a an acrimonious divorce that was
incredibly expensive. In fact, there's talk about the reason why
Indian and Jones in the Temple of Doom was so dark.
(14:43):
It was partly because Lucas was working out his feelings
about his divorce. Yeah, but it made a really good movie.
Okay movie. And then he so he's he was in
a bad place and he was thinking, well, I don't
have another Star Wars lined up. Howard the Duck was
a total ust. I think I'm going to focus on independent,
smaller films. Uh. And so he decided he was going
(15:05):
to sell off this computer division of Industrial Light and Magic.
So this was a possible point where this whole thing
could have just gone away. Yeah, but thankfully capt Moll
was kind of already preparing for this spinoff. Yes, he
knew that this was coming, and so he had already
started to kind of set the foundation. And Uh, they
(15:28):
decided that they were going to create their own standalone company,
Computer Animation and Effects Company. Uh. They did have one
little problem, which is that no one was really keen
on what to name it. Like, there were a lot
of no one No one had the one idea that
everyone immediately glommed onto. So there was a lot of
(15:49):
disagreement on that. Yeah, apparently one of the names was
gif fix, yeah, g f X for graphics. Yeah, it
was just this. It was just a temporary name. Is
literally something that they had to put in to a
field on a forum. They forgot the R to they
were well and there are a lot of issues with
that particular acronym doesn't make any sense. So they ultimately
(16:12):
obviously decided that they would name their company after the
computer system they had designed. That's why they called it Pixar.
And then they just needed to get somebody to help
fund this because they couldn't they didn't have any money
when they're just getting spun off. They had to find
some sort of angel investor, and they knew just the
(16:33):
guy who could get the jobs done. I don't know
whether they're grown or do you like at Dune done done?
Tell you what, how about we take a break and
you can figure it out. So obviously I was referring
to a very specific person with that angel investor, and
(16:54):
that would be Steve Jobs. And he paid five million
dollars to George A Kiss four Pixar. Yeah, and then
he spent another five million dollars to help fund the
company to get it really situated. Uh. At this time,
Jobs was actually going through his own transition. This was
during the period where he had been effectively forced out
(17:17):
of Apple or he had quit, depending on who you ask. Yeah,
and uh. And so he had gone on to found
a different company called Next and he decided to to
swoop in and generally he was going to be hands off.
He was going to leave the running of the company
to cat Moll and to Smith. They were going to
(17:38):
keep going. But he did have majority steak in the company. Yeah, absolutely,
he owned seventy percent of the shares is a private company,
not publicly traded, but seventy of the shares of the company,
and then the Pixar employees owned the other thirty percent.
That will be important later in our episode. Yeah. He
also decided that he wanted to really that Picks are
(18:00):
up to be a computer hardware company, so all of
that imaging stuff they were looking at unless the animation
studio side, and we all know how that went eventually. Yeah.
So this was this was largely a practical kind of determination,
the idea that computer animation was not quite at the
(18:21):
level of sophistication where you could make, say a feature
link film that you had people like Lasseter who wanted
to do it. There were a lot of people at
Pixar who wanted to do it, but they had all
determined that as the technology stood at that moment, it
just wasn't really possible. Yeah, but I mean they didn't
give up animation entirely. Lester still made shorts which were
then used as um kind of just like a sales pitch. Yeah,
(18:46):
like a sales pitch system exactly. They said, well, yeah,
you want to know what's possible with this computer, here's
some animation that we designed using this computer. So it's
kind of like a demo. But you know, obviously Laster
being Laster, he wasn't gonna just do you know, a
bouncing ball or something that would play a part of it,
(19:08):
especially in the first one, and that would be uh
Luxo Jr. Where we got the little lampy guy that
you see jump on the eye on the Pixar and
it smushes the eye and it's now the eye exactly.
I said, I wait, I I but yeah, Alexo Jr.
That's They would later go back and sort of remaster that,
(19:29):
but that became one of the early pitch films that
they would use. And it also really kind of helped
set Pixar's kind of aesthetic and tone, like there's this
sort of cheeky humor that tends to be in Pixar films,
and that was that was evident even as early as
six when they designed this short. Yeah, it also got
(19:53):
nominated for an Academy Award. Yes, it did not win
that Academy Award, but it was nominated. And then in
nineteen eight, just two years later, uh, they got another
Academy Award nomination for Best Animated Short Film, and that
film was called Tin Toy t I N Yeah not
t E N Yeah t I N toy and a
(20:14):
little It's a Little Tin Soldier and that one did
win the Academy Award. It's also another adorable film that
got remastered later on, and it would become the inspiration
for a future Pixar mega blockbuster hit. Yes. Uh, In nine,
we got another short from Pixar. Yeah, knick Knack. This
(20:34):
is another one that got remastered and re released actually
as one of the shorts that would come before a
Pixar feature linked film. I don't think I've actually seen.
This was a little snow globe with the snowman in it,
and he's desperately trying to get over to a It's
like a it's like a little a little souvenir choch
key that you would buy at you know, Hawaii or something.
Oh yeah, I do remember that. Yeah, And so the
(20:59):
whole thing is the snow man's just desperately trying to
get over to this hula girl y. Yeah. So that
was another super adorable short. And that was when some
other very important people to the future of Pixar would
join the company. This was nine. That's when Peter Doctor
and or Pete Doctor I should say, and Andrew Stanton
(21:20):
joined the company. So they're making all these animated shorts,
are getting lots of praise for them, Yeah, but the
business side of things is still struggling. Yeah. They were
not selling enough Pixar Image computers to pay off the
costs of running business. And according to a lot of
(21:40):
different stories, over the years, Steve Jobs collectively poured in
about fifty million dollars of his own money to keep
the company up float. And I would say, like, the
average person doesn't even know that Steve Jobs was involved
in Pixars. I mean, if you if you followed it
early on, you would have heard about him being on
the board of directors and things like that. But yeah,
(22:01):
he was very much the reason why the company was still.
If it had not been for Steve Jobs pouring money
into Pixar, it would not have survived. Yeah, well it
looked like they may not have at that point because
they started getting layoffs and downsizing and uh, you know,
at the same time, Steve Jobs is also struggling with
his company Next. Yeah, Next was not doing well either.
(22:25):
Next had created a very high end educational computer. It
ran for like five thousand dollars a computer, so very
expensive and no big surprise here. That meant that there
weren't that many customers because not a lot of people
are ready to drop five g s on a computer.
And uh, even though people thought that, I think the
(22:46):
elements of the operating system were really really innovative. So
Jobs was having this issue where he's got one failing
business and then another one. That is he's just constantly
pouring money into He sees the potential there, but the
question is can you ride it out long enough for
that potential to pay off? Well, he kind of didn't.
(23:08):
He kind of didn't, So he sold off the computer
hardware division of Pixar that everything that he had set
them up to do with the imaging and and such,
he decided to get rid of it. Yeah, that was
the part where he said, all right, we're gonna focus
on the computer animation side, but we're going to not
worry about producing actual computers anymore. And a company called
Vicom Systems purchased the computer hardware business unit of Pixar
(23:31):
for just two million dollars. That's not a huge turn
on investment there, and Vicom in turn would end up
going into bankruptcy just a year later. So it was
not it was not the the the shot in the
arm the Vicom needed to succeed. Not to be confused
with Viacom. Yes, no, this is Vicom v I c
(23:52):
O M. That's not the same as the cable company.
So the hardware divisions gone, So the animation division just flourished. No, no,
not quite. They still we're not. You're ruining my happy ending.
Well he's gotta have. You gotta have the low point
in act too before you can have the happy ending
(24:12):
in Act three. Al right, continue on, all right, So
here's the low point in act too. Pixar still wasn't
making money and This led to another round of layoffs
and half of Pixar was fired. Fifty of the employees
were let go. One of those was co founder Alvi
Ray Smith, who may have actually just left on his
own after the changes, and he went on to co
(24:33):
found another company called Altamira Software Corporation, which would later
get acquired by Microsoft. He would stick around with Microsoft retire,
So he's out of our story. And Steve Jobs was
not done. He knew that something big and major was
going to have to change soon, and to do that,
he felt he needed to have absolute control of the company.
(24:56):
But here's the problem. He had a majority stake in
the company, but of those shares didn't belong to him,
they belonged to employees. Yeah, so he shut the company down. Yep,
he effectively ended Pixar. Pixar Pixar was no more. He
closed the company. Is this one of those like Barrenstein
(25:18):
Barrenstein issues where we think Pixar exists but it's actually
in another reality, Jonathan, We'll have to answer that question
after we come back from a quick break. Okay, so
we're back and spoil alert. We know the Pixar comes
back to because obviously the movies came out. Something had
(25:38):
to happen, right, But it is true that that Steve
Jobs he shut Pixar down. Then he decided to start
a new company, a brand new company called rex Raxip.
Neither of those that was I was trying to say
Pixar back backwards. No. He he named the company Pixar. Yes,
and then he hired back all the people who had
(26:01):
been with Pixar just before he shut it down. Yeah,
but he didn't give them their shares back. No. No,
he would be the only one to hold the shares. Now,
if I were employee, I'd be a little upset. So yeah,
he shut down the company and then reopened the company,
and now it was wholly owned by Steve Jobs, and
the employees had no shares. Yes, And so then he
decided to sell this company that he shut down or
(26:23):
he considered it shut down and reopened. Yeah. He was thinking, well,
now I owned the company, so no one can stop me,
and I might be able to make back some of
that fifty million dollars I've been pouring into Pixar for
the last several years. So he started looking around at
the possibility of another buyer. But while doing that, another
opportunity came through the door. Yeah, they landed a twenty
(26:46):
one million dollar deal with Disney for Toy Story, not
just Toy Story, for five films. So that was where
the real issue would come in. The original deal was
to create three films. You're right, that was the original deal.
So the original deal with three films, and it was
a twenty one million dollar like up front and then
they would get a certain percentage of profits afterward, but
(27:09):
it was a very small percentage, as we will see.
So it was definitely something that the company needed, Like
the company needed that money. But if you look at
that deal and you think twenty one million, that's like
seven million dollars per film. Yeah, it's not. I mean
when you think about what film budgets are, especially by
(27:29):
today's standards, which of course, you know this was twenty
years ago or so even then, like an animated film,
I mean, that's nothing. So it's it is one of
those things where it's it was it opened the door
to Pixar, but it could have also spelled the end
of the company. So they decided that they would make
(27:50):
this film about toys that was inspired by the Tin
Toys short that they had made before and um this
was possible largely because Disney was looking at the possibility
of funding animated films that the company itself wasn't having
to animate. Yeah. Yeah, I mean they had success with
(28:11):
that with The Nightmare before Christmas in Yes, so so
there was some precedence for this where they the company
Disney was saying, all right, well, we're still producing animation
out of our our two studios, one was in l
a and one was in in Florida, um at laced
until Yeah. I remember going to the animation studio in Florida.
(28:31):
It was great because you could actually I mean I
remember seeing animated cells for things like a labin I
did do and it's great. You got to see like
stuff before it would come out. And then they shut
it down. Yeah. But all this time Jobs were still
thinking about selling the company. Yeah, and then he thought, well,
you know, I could sell it off, maybe even to Microsoft,
which is interesting because you know, Steve Jobs and Bill
(28:52):
Gates and that sort of relationship. Yeah. They they've they've
definitely been on either side of the friends enemies lines
what from each other. And so they decided he said,
you know what, I'll wait, I'm gonna wait a little bit,
see how this goes, because if these films turn out
really well, it'll put me in a better position than
(29:15):
I would have been had I just sold it. At
this point, so toy story ended up slowly taking shape.
I mean, this was the first time that most of
these folks over at Pixar had ever tried to put
together a feature link film, and not everything turned out
the way like the movie we got. It was very
(29:37):
different from some of the concepts they had, which we
will talk about towards the end of this um. So
Lasseter directed it, and a whole bunch of people helped
to write it, including Josh Sweden. Yep, he wrote one
of my favorite lines, which is wind the frog. Yeah. Yeah.
(29:58):
So at this point, Steve Jobs to you know, as
Jones has has decided to hold off and hold on
to Pixar for a while, and he was named CEO,
which was interesting because technically cat Moll was still calling
all the shops. He was just kind of the face man. Yeah.
The idea was that because Jobs was well known and
was a recognized figure in business, that that would add
(30:21):
enough legitimacy to Pixar to give it a stronger market
position like it was all about and I hate this word,
but it was all about optics. Fun. Yeah, But what
was fun was that toy Story. As we all know,
big hit, yeah, enormous hit. It was actually funny story.
(30:41):
I didn't even think about this when I was making
the notes. That was the first film I ever saw
with my wife in a theater when we were dating.
It was and I had the convincer to go see
it because she was like, I don't want to see
a kid's movie. She loved it when yeah, I had
already seen it, and I was like, just trust me,
just trust me, and she trusted me, and twenty two
(31:04):
years later she still won't let me pick the movie.
But here's the thing. Toy Store is a huge hit.
So you think, Okay, now Pixar's rolling in. Yeah, they're
they're past their their struggles. Except that that deal I
talked about earlier, the twenty one million dollars for three films.
Part of that deal was that Pixar's share of the
profits was tiny. It was around fifteen percent of the
(31:28):
profits and everything else was going to Disney, so of
the profits, right, So the movie's box office global box
office was around three hundred sixty million dollars, which you know, again,
you think about today and everyone's like, oh, if it
doesn't hit a billion, I don't care. But back in
the nineties, sixty million dollars, that's like huge take. Yeah,
things were much more reasonable. Yeah, yeah, dollars. It was
(31:51):
a dollar movie and you could get a bucket of popcorn.
But and a song in your hot no, um no.
But they that's the thing is that that they only
got fifteen percent, so Disney's taking the profits essentially, and
so this was tough. But Steve Jobs had an idea, right, yeah, yeah,
he took the company public. He took Pixar public about
(32:12):
Disney obviously, just a week after Toy Story premiered, which
is great timing because everybody's really excited about this new
Pixar movie, the first feature length animated film computer anim
and so you know, perfect timing. Everybody wants in on
that well. And this is also at a lull for
(32:33):
Disney's animation, right, Like Disney had its renaissance with Little
Mermaid and Aladdin and Beauty and the Beast and then
the other films like Pocahontas, Hunch Mulan, those were starting
to be more of a lull, at least as far
as audience response, now that we're not saying those movies
aren't great. Mulan, I like, I like I like Mulan.
(32:57):
I don't like either of the other two, but I
like Mulan, And so that also helped. Like this was
so this was a great move for Steve Jobs. Like
he was like, we're gonna put the company out, make
it public right after this huge success. Everyone's really excited.
It drives up the value of the company. Uh, it
was the biggest I p O in even beat out Netscape,
(33:19):
which was, you know, like the dominant web browser of Yep,
we'll have to do an episode on that. But then,
so the markets when they opened. Before they opened, the
shares were estimated to open up at around twelve to
fourteen dollars. It actually opened at twenty two and it
got up as high as forty six dollars at at
(33:40):
its peak that first day of trading, then settled down
to thirty nine dollars, still an incredible gain considering that
they originally thought it was gonna be twelve bucks of share.
And is this what made Steve Jobs a billionaire? Yes,
this is how Steve Jobs went from being a rich
millionaire to a super stinking rich billionaire overnight. Here I
thought it was all Apple. No, no, it was actually
(34:02):
Pixar that really pushed him into the billionaire club. And
at this point you probably think that, well, I bet
some of those employees are said that they didn't have
their shares anymore. I would be because they were no
longer they weren't going to be billionaires. So the thing
that this did allow Jobs to do is to go
back to the bargaining table with Disney and say like, well,
now Pixars a publicly traded company, we're valued very very high. Like,
(34:27):
our our valuation is incredibly high. Uh, let's talk about
this deal. So the deal, the three picture deal, was
scrapped and a new deal was put in place, and
this time it was a five picture deal that would
last over ten years, so five movies and ten years,
and the profits would be split right down the middle
(34:48):
fifty fifty between Disney and Pixar. So this made, you know,
picks are obviously happier, but also it kind of shut
up some analysts that were saying that Pixar shouldn't be
as value valued as high as it. Yeah, there were
there were people who were questioning whether or not Pixar's
value really was what it seemed to be in that
(35:09):
in that week of the I p O. Because they
were saying, people are really excited because you had one success,
but until you have a proven series of successes, that
doesn't really mean anything. Like you could you could have
a freak home run and then you strike out the
rest of the season. That was what they were saying.
(35:30):
But it wasn't It still wasn't fair. All fairy tale
endings for Disney and Picks are yet. No, No, that
was the early years were rough. So the next film
to come out was A Bug's Life, which I really enjoyed.
It's often kind of grouped in some of the lesser
Pixar films. Then you got Toy Story two, which originally
Michael Eisner, the CEO of Disney, wanted to go as
(35:53):
a direct to video type of sequel. I would have
been fine with that. Laster, however, was not. Yeah, I
love Toy Story too. I like Toy Story. I like
Toy Story three better. No, I like Toy Story two
more than three, but I like I like the original
more than either of those. But you know what, I
like more than either of those myself, What Monsters, Inc.
And Finding Nemo, which came out next. Yes, so he
(36:14):
had Bugs Life, Toy Story two, Monsters Ince Finding Nemo.
But Steve Jobs and Michael Eisner were starting to have
some problems. They were largely disagreeing over which films counted
towards that five picture deal. Yeah, because Eisner didn't want
Toy Story two to go to the theaters, so he
didn't want that to count towards the deal. Yeah. He
(36:36):
essentially said it's a sequel. See girls don't count. Yeah,
the five five picture deals just for totally original I
p and Jobs is like, the heck, did you just
say we didn't say five ideas. Yeah, we said five films.
So by the time Finding Nemo came out, word was
getting around that Disney and Pixar had been holding talks
(36:56):
about perhaps extending this agreement beyond those five pictures, but
that the talks were not going well. And Steve Jobs
actually released a statement and here's a quote quote after
ten months of trying to strike a deal with Disney,
we're moving on. We've had a great run together, one
of the most successful in Hollywood history, and it's a
(37:18):
shame that Disney won't be participating in Pixar's future successes
end quote sadness. But Disney was like fine, and they
tried to establish their own Well, they did establish our
on computer animation studio and they called it Circle seven, Yes,
which never made a movie by the way. No, it
was intended to create sequels to the Pixar movies. Yeah,
(37:39):
the idea being that Disney owns that intellectual property, so
they could turn out as many sequels of Toy Story
and Monsters in Finding Nemo as they wanted without Pixar's
involvement at all. Um. Clearly that would have been rough,
if not disastrous. Yeah. I think of some of the
directive video sequels that Disney has done that have not
(38:00):
been great. There have been something that have been really good.
Line King one and a half is great, but a
lot of the a lot of the ones are not
so hot, and so that raised a lot of concern.
But while this argument was still going on, Pixar was
still making movies for Disney, and the Incredibles and Cars
(38:21):
had come out, and that meant that they were beyond
the five picture deal at this point that they something
had to change. Cars came out in two thousand and six,
and at that point Disney and picks Are we're able
to settle their differences, and that's when Disney made the
announcement that it would acquire Pixar for And this is amount,
(38:44):
an amount that was astonishing when you think about how
close picks Are was to going out of business just
a few years earlier, for seven point four billion dollars. So, yeah,
here's the computer animation studio that was losing so much
money that a millionaire had poured fifty million dollars of
his own money in it just to keep it afloat.
(39:05):
Now acquired for seven point four billion dollars, Jobs would
end up joining the board over at Disney UM and
was an even richer billionaire. Yeah, and you know, you
might be thinking, I thought Disney made some computer animated
movies by themselves, and they did, but that's later on. Yeah,
and it wasn't Circle seven. That was a division that
they formed to do that, and ultimately Circle seven didn't
(39:28):
do that in a gut kind of folded into other departments.
So it was just one of those things where a
company makes a division specifically to do something and then
it just never works out, all right, So we want
to end this episode of some fun facts. Yep. So
here's some of the weird stuff about toy story. The
original version of Woody was not a pole string cowboy. No,
(39:49):
he was a ventriloquist dummy, which is creepy. Yeah, that's
what Michael Eisner said. He said, no one thinks ventriloquist
dummies or anything other than creepy. I don't want to
have a creepy character as the protagonist. Change it. I'm
sure at one point they weren't, but now they are
mainly creepy. It's it's kind of hard. Like most of
the Ventrolak was dummy movies. I've seen cast it in
(40:11):
the form of like possessed dummy all you know, chucky,
but that's all I've watched. Jeff Donoman not gotten scared,
so that's you know, he scares the heck out of me. Anyhow,
Next fun fact, Okay, well, buzz Lightyear was not originally
buzz light you're His original name was Tempest, named after
the classic arcade game. He also originally was aware that
(40:32):
he was a toy. I'm glad they changed that. Well,
apparently the reason why they changed it was that when
Tim Allen came in to read for the character, he
was playing him with such bravado and such like completely earnest,
earnest and not not knowing he was a toy, like
treating it like he is a space ranger. That the
(40:52):
these these the writers were all saying, no, wait, this
is way better. And that's when they made the choice
to fear away from Buzz Lightyear, knowing that he was
a toy um And and the last time fact is
that Toy Starter was kind of it kind of had
snow white syndrome. So they thought it would take eight
animators and it needed thirty three yep. And they thought
(41:13):
it would take fifty three processors and it took three hundred. Yeah.
So yeah, this is is funny because when we did
our episode about Disney uh going into snow White, it
was very much the same thing, right, Like Walt Disney
drastically underestimated how many animators and how much time it
was going to take, and and they underestimated the time
to make Toy Story as well. Yeah, as it turned out,
(41:35):
the reason why they had to go with those three
processors was because rendering each of those frames just took
so much time, and when you think about like a
frame is one of a second. So a full movie,
a feature league movie, has thousands and thousands and thousands
of frames, and when it takes hours to render a
single frame, you then extrapolate that and you realize we
(41:58):
will never finish making this movie. So obviously things have
improved since then. But then also as technology improves, Pixar
tries to push the envelope of how much it can
do with that technology. So it's it's constantly a seesaw
right that they'll animators will come up with a new
way to test the technology to its limits, new technology
(42:22):
will come out and rinse and repeat. Yeah. Well, this
was a really fun topic. Thank you Nathan for requesting
it and and kind of hitting a love of both
Jonathan and mine. Yeah, we loved going back and looking
at this story and again, like it's really interesting to
see how much of it was rooted not just an animation,
but in hardware. Yeah, yeah, which I always appreciate an
(42:44):
aerial's eyes glaze over. No, I do appreciate it. Look,
I like technology, This is just not the place for it. Okay,
fair enough, entirely, Well, what is the place if people
have suggestions to send us for future companies we should
focus on. Well, that place would be our email. In
our mail is feedback at the Brink Podcast Dot Show. Yeah,
and Ariel reads every single one of those. Yes, please
(43:06):
please write in. I love hearing from you guys. It
makes my week. She's so lonely. And if you want
to visit our website, that's The Brink Podcast Dot Show.
We have an archive of all of our past episodes,
so if you've ever missed one, you can go check
that out. You can search to see if perhaps the
company you were thinking of has been covered already, and
if it hasn't, then definitely reach out to us. Or
(43:27):
if it has, but you feel like there needs to
be an update that's legit too. So that's that, and uh,
that's it. I think until next time, I have been
Jonathan Strickland and I've been aerial casting to infinity and
be all business. On the Brink is a production of
I Heart Radio and How Stuff Works. For more podcasts
(43:49):
for my heart Radio, visit the I heart Radio app,
Apple Podcasts, or wherever you listen to your favorite shows.
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Business on the Brink News
Hosts And Creators
Jonathan Strickland
Ariel Kristen Kasten
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