Steve Jobs' rise to movie mogul
profile In 1991, a younger Jobs said it had long been his "dream" to distribute Pixar films though Disney. Now he's Disney's largest shareholder.
Now, with the $7.4 billion sale of his Pixar Animation Studios to Walt Disney, on terms that make him the venerable movie conglomerate's largest shareholder, Jobs is moving more deeply into a Hollywood that he's always held somewhat at arm's length.
in Tinseltown
The deal marks a personal triumph for Jobs and the studio that has redefined American animation over the last decade. But it also serves as a reminder of just how much the high-tech, entrepreneurial culture of Silicon Valley has helped upend an entertainment business once defined by the films and other products of Disney.
"We consider (Pixar) to be the Disney studio of the 21st century," said Doug Ward, the manager of the animation program at the University of California at Los Angeles, which has sent several of its alumni to Pixar. "Disney really lost its place a few years ago, and now they're trying to catch up."
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It remains to be seen whether Jobs will transform Disney, or whether the 82-year-old corporate giant will resist the Apple-Pixar chief's counterculture-inspired, tightly controlled approach. But the acquisition is likely to give Disney a new lease on a creative life, after growing critical assertions that the company was long past its prime.
"We welcome and embrace Pixar's unique culture, which for two decades has fostered some of the most innovative and successful films in history," Disney Chief Executive Officer Robert Iger said in a statement. "The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses."
Jobs' entry into the entertainment business came in 1986, when the 30-year-old former head of Apple Computer bought into Pixar, shortly after being pushed out of the computer company he had co-founded.
Pixar was primarily a hardware company at the time, a division of Lucasfilm that built high-tech computers to improve the computer graphics of the day.
In an interview with Time magazine in 1986, Jobs said he had looked at Pixar even before leaving Apple, but that nobody else at the computer maker had been interested. He bought a majority stake in the small Lucasfilm division for $10 million and quickly helped it sign deals to sell its $120,000 machine for decidedly non-Hollywood uses, such as analyzing government spy satellite data, or underground oil deposits.
The Pixar investment proved a costly one, as demand for the hardware and the company's early software proved low, however. According to the book "Apple Confidential," Jobs pumped in at least another $50 million to keep the company going in its early days.
The book quotes Jobs as saying, "If I knew in 1986 how much it was going to cost to keep Pixar going, I doubt I would have bought the company." The book also notes that in late 1994, Jobs contemplated selling the money-losing Pixar to Microsoft.
"What people don't realize about Pixar is that it was a really long and painful haul," said Bruce Perens, the open-source software pioneer who worked at Pixar for 12 years, until 1999. At one point, most employees even sold their stock back to Jobs, to help ease the financial crunch, Perens said.
Those financial difficulties began to ease once Pixar was released from a noncompete arrangement with former parent Lucasfilm and could focus on making full-length movies, Perens said. The company had already won recognition for its short films, winning the 1988 Oscar for best animated short. But in 1991, Pixar signed its first three-feature-film deal with Disney, a relationship that Jobs said at the time had been a "dream" since 1986.The first fruit of that deal was 1995's "Toy Story," which grossed more than $350 million worldwide and opened movie audiences' eyes to a new kind of 3D animation. On the strength of that debut, Pixar went public in late 1995, making Jobs a billionaire.
The ensuing decade has seen few missteps from the company and its team of talented animators and producers, leading to movies including "Monsters Inc.," "Finding Nemo" and "The Incredibles." By keeping the company in the San Francisco Bay Area, Jobs--along with George Lucas--helped create a Northern California filmmaking culture that defines itself by an innovative blend of new technology and traditional storytelling.
Balancing Apple and Pixar
Still, Jobs' heart remained with the company he and Steve Wozniak originally created in a Silicon Valley garage. At the close of 1996, he returned to Apple as a consultant, then as a "interim CEO," and finally as full-fledged chief executive.
Pixar flourished under the creative tending of "Toy Story" director John Lasseter, releasing "A Bugs Life," "Toy Story 2" and "Monsters Inc." The company developed a reputation as an artistic Shangri-La, where animators, programmers and storytellers worked in an collegial, nurturing environment, and where directors took the suggestions of their team members seriously.
"All studios try to nurture talent, but Pixar does it on a level that is magical," said Bobby Beck, a seven-year Pixar veteran who left in 2004 to start online animation school Animationmentor.com. "The whole thought is that inspired employees create inspired work. That's been their focus."
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Jobs was meanwhile focused on turning around Apple, cutting off unprofitable businesses and streamlining products into a few well-designed, sexy offerings.
Observers quickly noted a family resemblance between the two companies. Each faced huge, traditional rivals. Each focused on a small number of products, and paid painstaking attention to the smallest details of design, winning awards and cultish admiration from fans.
In Apple's case, this created the successive iMac designs, each of which overturned the traditional image of the personal computer, as well as the now-explosively successful iPod. For Pixar, each movie made breakthrough technical strides in computer animation, making character motion and expression, light and shading, and other, almost subliminal details look increasingly natural.
Perens, whose Pixar office was directly across from Jobs' own, said there was a period of a year or two where he "just disappeared to work on Apple." But even afterward, Jobs followed a more hands-off approach than at the computer company and iPod maker, where he's often deeply involved with the details of design decisions.
For instance, he typically doesn't come to the screenings of films as they wind their way through production, former employees said. However, he is always at premieres and wrap parties, and he makes it clear to employees that he cares deeply about what they do, Beck said.
"After I was hired, Jobs came into the room where a bunch of us were training and told us, 'I want to make sure that you are happy here for the rest of your creative life,'" Beck said. "That was really inspiring, and I believe that they definitely followed through. It wasn't just smoke, it was the real deal."
Apple computers had long been widely used inside the music and movie industries, but the company itself moved awkwardly into the entertainment business. It was slow to add CD burners to computers, and then launched its iTunes music software with a "Rip. Mix. Burn" advertising campaign that angered record executives fearful of music piracy.In early 2002, Jobs brought his full charms to bear on a music industry that had resisted most advances from the high-tech world. In a series of face-to-face meetings with the industry's top executives, he showed off his idea for a new music store that would protect copyrights but be easier to use than previous music download services.
The full-court-press worked and Jobs launched the iTunes Music store in April 2003. Initially Mac-only, the store quickly expanded to Windows and emerged as the dominant force in the online music business.
That ambition has now been expanded to video, with TV shows, music videos and Pixar shorts. To launch that service, Jobs went first to Disney, which provided the Pixar chief with the first television content for iTunes from the Disney-owned ABC network.
"This is a first giant step," said Disney CEO Robert Iger, appearing on stage with Jobs to tout the new video offering late last year. "It is the future, as far as we are concerned."
That cordial appearance followed a near-catastrophic collapse of the relationship between Jobs' Pixar and Disney, however. Indeed, the appearance of Iger on the same stage with Jobs immediately loosed speculation that some new deal between the companies was close--or at least that Iger was hoping to mend bridges.
In early 2004, Pixar announced that it had broken off talks with Disney to renew their relationship, and would begin negotiating with other studios. Jobs himself savaged the older company in a conference call with analysts, saying that Disney had "very little creative input" on Pixar films.
"You can compare the creative quality of Pixar's last three films--for example--with the creative quality of Disney's last three films," Jobs said in that February 2004 conference call. "No amount of marketing will turn a dud into a hit. Not even Disney's marketing and brand could turn Disney's last two films--'Treasure Planet' and 'Brother Bear'--into successes."
The revelation that Disney was ultimately hoping to buy--not just distribute--Pixar was evidence to many in the industry of just how far the onetime pioneer of animated film had fallen from its original creative leadership.
"I've just been dismayed at the direction the company has gone in the last 10 years," UCLA's Ward said. "I thought if they lost Pixar, they should get out of the animation business and just stay in the hotel and theme park lines."
Now the future of Pixar--and Disney--may depend on just how well Jobs can retain the single-minded focus on detail that's led to successful Apple products and hit animated films. That in turn will likely depend on how much breathing space Jobs can lay claim to inside the massive Disney structure for his creative team.
Other Disney studio acquisitions, such as the 1996 purchase of the well-regarded Dreamquest special effects studio, haven't gone smoothly. But as with many of Jobs' previous sequels, it would probably be a mistake to expect anything less than a surprise ending.