How They Started (6 page)

As at Lucasfilm, there was some success selling the Pixar computer, but the audience was limited. Pixar bundled the computer with software and sold it as CAPS: the Computer Animation Production System. Disney bought the system, which brought breakthrough effects to
Beauty and the Beast
, the first animated feature to be nominated for a regular Best Picture Academy Award®.

Pixar continued to grab attention for its breakthroughs. Its next was a computer-animated short film,
Luxo Jr.
, directed by John, in which an amazingly lifelike desk lamp and a smaller “child” lamp play with a ball. Computing power was so limited that a plain black backdrop was used for the short. Nonetheless, the film played to a standing ovation at SIGGRAPH, and playful Luxo would become the Pixar symbol.

This was great for Pixar’s reputation, but still didn’t pay many bills. Only 120 computers were sold by 1988, and Steve was applying pressure to make the company profitable. Budgets were repeatedly trimmed.

“He put us through a lot of pain,” Alvy Ray Smith recalled. “But, at the same time, he was unwilling to let the company go bankrupt.”

While Pixar continued to make successful short films, the company turned to a more lucrative art form to bring in more cash: TV commercials. The first ad, “Wake Up,” was for Tropicana orange juice. The team became known for its skill in creating animated characters for commercials, including a boxing bottle of Listerine. John won a Clio award, the ad industry’s Oscar®, for “Conga,” an ad that featured gummy Life Savers candies dancing in a nightclub.

Recruited for the commercial-making effort were two animators who would later direct films for Pixar, Andrew Stanton and Pete Docter. When Stanton arrived he had literally never touched a computer before. He was a quick study, and soon created a computer-animated Trident chewing-gum ad in which a spearmint-leaf singer sang at a cabaret piano.

The commercial side did well financially, but the huge cost of hardware and software development was crushing the company. The company had mushroomed to 140 employees. At the same time, the CAPS system needed ongoing support to maintain Pixar’s good relations with Disney.

The studio was taking note of Pixar’s progress, and after each short film John would get a call asking him to quit and come back to work for Disney. That John kept turning Disney down bolstered morale greatly at Pixar. Even though Pixar constantly teetered on the brink of financial collapse, John chose it over the security of the big studio.

When local hardware firm Vicom Systems offered to buy the Pixar Image Computer and CAPS system, Ed knew it was a major turning point. He felt strongly that the hardware-side costs would prove fatal to the company and that both sides of the business would fare better separately. The sale was made and Pixar shrank back to 50 employees, greatly lessening its overhead.

Most of Pixar’s focus was on making short films and commercials. One of those shorts,
Tin Toy
, about a wind-up toy, triggered a fateful comment from Disney animator Joe Ranft, who had worked on
Beauty and the Beast
.

Seeing the film with John at a 1988 Dutch animation festival, John recalls Joe’s enthusiasm for the concept: that toys could be alive. Joe thought many more stories could be told this way. And the wheels started to turn in John’s head about doing just that—telling a new, bigger story about toys.

“I’ll always be grateful to Joe for seeing the larger potential in
Tin Toy
,” John says in
To Infinity
. “Who knows if I would have looked at it as a door to a bigger world if it hadn’t been for him?”

Shortly afterward, Disney upped the ante with John. After a shareholder revolt, Disney’s leadership changed and Walt Disney’s nephew Roy Disney was now in charge. If the studio couldn’t hire John back, Disney reasoned, they would partner with Pixar to produce a computer-animated film.

Steve served as Pixar’s negotiator, hammering out a three-picture deal in 1991 with Disney chairman Jeffrey Katzenberg. Pixar would produce, while Disney would promote and distribute. The terms were less than stellar, but Pixar had the machinery in place at last to make and distribute its first feature.

It would take four long years for that first picture to make it to the screen.

“It took us a long time to build the technical foundation,” Steve told TV personality Charlie Rose in an interview shortly after the release of
Toy Story
. “We were pioneering every step of the way.”

The task facing Pixar’s animation staff was a daunting one. The team estimated it would take 100 early ’90s supercomputers two years to render all the animation needed for a computer-generated feature film. As it turned out, the production took so long that more powerful computers became available—but rendering the film still took a full year.

“It took us a long time to build the technical foundation,” Steve told TV personality Charlie Rose in an interview shortly after the release of Toy Story. “We were pioneering every step of the way.”

John soon discarded the idea of building the feature around the star of
Tin Toy,
and he developed an entirely new storyline featuring a cowboy ventriloquist dummy named Woody and a newfangled electronic toy spaceman, Buzz Lightyear. Later, Woody and Buzz both became 12-inch dolls so that they fit together better onscreen. The jealousy between old and new toys was at the heart of the film.

But as production proceeded, Disney’s Katzenberg carefully watched its progress and issued copious notes. The story went through rafts of revisions as Katzenberg pushed to make the characters more “edgy,” more adult. In particular, Woody became an increasingly nasty character. John knew he was going down the wrong road when actor Tom Hanks, who was voicing Woody, noted that he rarely got to play jerks.

Finally, a year into production, Pixar brought its assembled reels to Disney for a screening. The event became known at Pixar as “the black day.”

The film was a disaster. It wasn’t funny. It didn’t have the heart that had won renown for John’s short films.

Disney wanted to halt production, lay off most of the Pixar team, and move a few key Pixar animators to its own Burbank, California, headquarters to rework the film under close supervision. In John’s view, this was to be avoided at all costs. John begged Disney for two weeks in which to write a new storyline and prove they could complete a winning film.

Energized by the reprieve, Pixar staffers worked around the clock to recapture the fun and joy they originally saw in the
Toy Story
idea. Woody became a far more likeable character, and the interplay between the toys crackled with jokes again.

Incredibly, within the scant two weeks granted them, Pixar completely remade the entire first third of the movie. Impressed with the new version, Disney reversed its decision: production was back on.

As the story continued to be animated, Ed’s technical team faced the daunting task of fully animating 80 minutes of film. Previously, the most computer animation in a film had been 10 minutes of dinosaurs in
Jurassic Park
. Rapidly, the team constructed programs that would allow networked computers to work together to speed the rendering process.

In all, Steve would invest a staggering $55 million in Pixar prior to
Toy Story
’s release. The company would likely have faced extinction without his commitment, John recalled in a Facebook-page tribute the week of Steve’s death in October 2011: “He saw the potential of what Pixar could be before the rest of us, and beyond what anyone ever imagined,” John wrote. “Steve took a chance on us and believed in our crazy dream of making computer-animated films.”

As Pixar readied
Toy Story
for release, there was a huge question hanging over the project: what would audiences used to 2-D animation think? Would they take to Pixar’s computer-generated toys? The first preview Disney held for the movie while it was still in process got the lowest scores in the company’s history. However, a later screening of the nearly completed film received high marks.

“He saw the potential of what Pixar could be before the rest of us, and beyond what anyone ever imagined,” John wrote. “Steve took a chance on us and believed in our crazy dream of making computer-animated films.”

The fears proved unfounded.
Toy Story
opened in November 1995 and was an instant smash. It would go on to gross more than $360 million dollars and spawn two sequels that would each gross even more. The movie won a Special Achievement Oscar® as the first-ever computer-animated film.

Unfortunately, Pixar didn’t benefit much from
Toy Story
’s success. In particular, its agreement with Disney left Pixar with little participation in the lucrative merchandising associated with
Toy Story.
So the millions of Woody and Buzz toys sold did not enrich Pixar’s coffers. But Steve was thinking ahead about this, and had a plan to prevent Pixar from missing out on this revenue in future.

Confident that
Toy Story
would be a success, Steve began pushing during late production for the company to do a public offering. John thought the idea crazy, thinking it would be better to wait until Pixar had two successful films under its belt. But Steve’s logic was that to better their deal with Disney, the company would have to put up half the production money for future films.

To do that would take big money. Steve was at the limit of what he could contribute. Pixar needed to go public to get more capital to finance future pictures.

In a high-risk gambit, Steve timed the IPO to debut the same week as
Toy Story
’s release. But with the film’s success, Pixar’s IPO was the largest of 1995, raising $140 million. With the IPO, Pixar changed its name to Pixar Animation Studios, signaling that its entire focus would be on animation going forward. With the IPO cash in hand, Pixar renegotiated its Disney deal, obtaining a 50 percent share of merchandising on future films.