Disney and Pixar

[jlambrig]

Originally posted by DancingBear


And, as I've also said, Eisner screwed up big-time with Katzenberg and Ovitz.

But so did the board. I understand that most are in place because they are Eisner's evil henchmen but the problems with Disney do not lie solely with Eisner, it is the board of directors that let this continue. We can talk ad infintum, and often do, about what Eisner does or doesn't do but this is a totally ineffective board that is enabling him to dictate Disney policy. And I don't see the new addition to the board, though advertised as independent, stirring things up at all.

One would think, that with the corporate governance efforts in place throughout the country, there would be a greater focus on Disney, especially with the Ovitz fiasco, and their ineffective board practices, but this has barely popped up on the radar screen. And that was only briefly.

There is many opinions on this board that Eisner needs to go and I am in agreement with that. I recognize that he has had some significant accomplishments and don't share the view that everything he does is without merit (or that everything that happened during his watch was someone else's doing). But there needs to be a greater shake up at Disney. The house cleaning needs to include the board as well. A dissident stockholder with a large stakeholder position in the company, a Kirk Kerkorian type, may be the only thing that will be able to put a halt to the inertia this board and Eisner have built up.

 

[CasualObserver]

2--Give Job$ what he wanted, and, in exchange, extend the 5 (which would then be really 4) picture deal, on terms somewhat more favorable to Pixar than the original deal.

Bear, I noticed you really glossed over this one. This is the option that Voice had been saying would have been better in the long run for Disney. Remember, "Give a little, get a lot". What you are not wanting to acknowledge is that it is in Disney's best interest to keep a relationship with Pixar. No one has said that they expect Disney to give away the store as you have implied. However, had they been willing to negotiate they could be looking at revenue from more films rather than the well drying up rather quickly.

As I said, this scenario makes sense. Unfortunately, it makes your boy, Ei$ner seem foolish for not taking it. His "My way or the Highway" attitude cost Disney. Now he's crying to the board about how he can't make a deal when it was his belligerence that is making it next to impossible to come to terms.

You will probably say is Jobs fault for wanting to renegotiate. Ei$ner didn't want to budge, now he's paying the price by having the best animation studio take their business elsewhere. His history is riddled with these miscalculations.

Casual Observer

 

[KNWVIKING]

This theory of "give a little,get a lot" sounds good, but why should we believe the "get a lot" would ever materialize ? If Jobs is pissed and holding a grudge now because he felt he shouldn't have to honor the existing contract over TS2, why do you believe he would suddenly become Mr Generous with a new contract with Disney now ?

If Jobs had any idea back in '94 of the magnitude of Pixar's success, do you think there would have been a contract at all between Dis and Pix ?

This time Jobs doesn't need a crystal ball, he has ten years of history to rely on. He has the software and the hardware. He has the creative force. He has the cash. All he needs is a distributor willing to work for whatever he deems is fair. What would be his motivation to offer Disney a few extra bones ? He showed his greed when he tried to rewrite the contract for TS2. For the most part Disney has no bargaining power unless Pixar believes a sizeable portion of their success had something to do with being associated with Disney. Unless Jobs is bluffing, apparently they don't.

IMO giving Jobs TS2 back then would not give Disney an advantage now.

 

[DisneyKidds]

The well oiled machine analogy wasn't meant to imply anyone besides the CEO (and a second "creator" type Chief Operating Officer) sit back and manage the control room.

Fine...........but I would still disagree with you. I think that top men who are figureheads who sit in a control room are the wrong answer for any compnay. The CEO, the COO, the top guys...........they need to be shrewd business men, but they also need to understand their industry, they need to have ideas for the future, they need to know what is going to generate revenue and be in the long term interest of their company. It is a mistake for the top guys to rely on the guys below them to do all of that, IMHO.

I'm certainly not lauding Mr. Eisner for being a defender of contract rights.

I'd say the same thing Scoop, but apparently AV only wants to see this situation, and us, one way. Oh, well.....................

 

[Walt's Frozen Head]

Regardless of which mega-millionaire ends up getting stuck in this little game of "pin the tail on the failure of Disney/Pixar," Jobs' company has demonstrated a commitment to creativity and, at first blush, appears to be poised for immediate improvements in their financial results coming out of the Disney deal. Eisner's company has demonstrated a commitment to cutting costs and, at first blush, appears to be left wondering where to find a quick replacement for "Disney-quality" feature animation and record-setting numbers of ticket sales, upon separating company with Pixar.

 

[Another Voice]

"This theory of "give a little,get a lot" sounds good, but why should we believe the "get a lot" would ever materialize?"

And such is the inherent problem with Eisner's long term strategy of turning Disney from a producer of product into an wholesaler of product.

Disney is at the mercy of others - the company can no longer control its own fate.

And when at the fate of others that puts you in a very weak position and sometimes that means you have to pay. And pay big. What if Pixar had turned out flop after flop after flop - Disney would have had no option but to release a long string of money-losing films (because, of course, they would have thought themselves strictly bound by the contract and wouldn't think of refusing).

In normal business, the company with the more expensive legal drones usually wins. But Hollywood ain't a normal business. Hollywood relies on people, extremely tempertmental people. General Motors can always find someone else to make fuzzy dice for them, there is an extremely limited pool of taleneted film makers there. Unless you're careful you're soon left without options.

Eisner moved Disney into a position where Disney would not make CGI movies. He had to rely on an outside contractor to provide those items. He promptly turned around and ticked off that supplier and they, as any company with a successful product would, started to explore their options.

Now that the traditional animation facilities have been gutted, and 2D animation declared as dead as Beastly Kingdom, suddenly Eisner is left without the "future of Animation".

How are the few dollars he squeezed from getting one extra film worth becoming a bit player in a field they created?

 

[KNWVIKING]

"This theory of "give a little,get a lot" sounds good, but why should we believe the "get a lot" would ever materialize?"

***"And such is the inherent problem with Eisner's long term strategy of turning Disney from a producer of product into an wholesaler of product.

Disney is at the mercy of others - the company can no longer control its own fate." ****

I absolutely agree. Disney should be "Pixar". They should be on the cutting edge of CGI. In that regard Eisner failed. But back when TS2 came out CGI was still relatively new to the industry, Disney was trying to develope its own CGI devision- which ME closed prematured based I imagine soley on Dino- so your "give a little" theory isn't relative. I'd imagine that back then the plan was to use Pixar as a gap filler until Disney's own CGI business took off. With those assumptions, ME would have no reason to offer Jobs a break on the contract.

Now if there was no TS2 then but today the issue were Nemo 2, given Disney's current CGI status, it could possibly be in ME's best interest to suck up to Jobs and let Nemo 2 count towards the total. But of course we'll never know.

Now a question for you AV. Disney still has a couple years worth of cash cow business with Pixar. How long would it take for Disney to get it's own CGI devision back up and running ? I can't believe every talanted writer & artist will reject an offer from Disney. What would it take and do you feel Disney can do it quickly enough to fill the void left by Pixar ?

 

[HB2K]

Now a question for you AV. Disney still has a couple years worth of cash cow business with Pixar. How long would it take for Disney to get it's own CGI devision back up and running ? I can't believe every talanted writer & artist will reject an offer from Disney. What would it take and do you feel Disney can do it quickly enough to fill the void left by Pixar ?

If you were a CGI Animator, knowing Disney's history with the secret lab, would you be chomping at the bit to go work there? How would you be able to believe Eisner that this time around he won't grow impatient and fire you to hire some other third party?

 

[KNWVIKING]

... People gotta work,feed their families,buy AP's. Not everybody out there has a personal grudge with ME. The talant pool didn't suddenly stop produce bright,new,energetic animators & writers when Disney closed up the secret lab.

 

[HB2K]

You're avoiding my question...

If you have this skill, would you choose the Walt Disney company as your employeer knowing what happened the last time they wanted to produce in house CGI feats?

As you said, people have families to feed, bills to pay, etc. Does it make sense to go to work for a company where you're one cost cutting whim away from unemployment...and that company has already had the whim once? What would make you think this time will be different?

 

[crusader]

HB2K

You're talking about job security which has become a thing of the past. Would someone laid off from a company consider re-employment there? Depends on the job market.

 

[KNWVIKING]

I didn't avoid your question, I just don't agree that every writer/animator out there has the distaste for Disney that AV makes it sound like does.

If I'm an animator that is confident I can do the job, put out the quality required to produce a money making hit, then I'll go to work for whoever I feel can provide the means to do so. To avoid Disney because of past failures is almost like admitting I'm not good enough to do the job so when the flick fails I'm getting the axe. Potential hires can look at the success of the non animated film makers and know that Disney is serious.

Hey, maybe I'm dead wrong. Maybe Disney puts out a want add for animators and only hacks show up. But my gut tells me otherwise.

 

[raidermatt]

Its not really about job security.

Its about two things:

One, you can't always count on finding top notch talent from the pile discarded by other companies. That doesn't mean that talented people don't get axed, it just means that somebody like Pixar or Blue Sky isn't kicking their best people out the door.

Two, I'm guessing most animators realize they aren't going to get job security in the traditional sense. Most likely, what they are looking for is someone who is committed to the product. I'm sure they understand that if things don't go well, they won't be kept around forever, but I think they would be much more apprehensive of a company who slashes entire departments on a whim vs. one who is either going to succeed in the genre or go bankrupt trying.

Usually, the best people have a choice, and certainly Disney's recent moves with The Secret Lab and the Animation division would not score them any points.

Doesn't mean it can't be done, but it will require a true committment on Disney's part, one that has not yet surfaced. Instead, they continue to look to other third parties.

 

[Peter Pirate]

Particularily in this pop culture we live in, I think the best talent (that Disney would need to hire) is the new, young talent looking for their first jobs. Older appeals to older and seldom will the experienced talent be the innovators. As proof, Bob Dylan give us anything lately? Has Spielberg given us anything other than Spielberg? Meryl Streep pushing the envelope anymore? Still great acting but... Is the Boss still the 'Boss'? Robin Williams? Still a hoot, but anything new?

If you want to see the same old stuff keep the same old guys doing it...Otherwise make way for the young turks, which traditionally happens anyway, but this means Disney has as good of shot as any at attracting the next really "great one" or the next great team...Just like Pixar did...

This 'Chicken Little" syndrome is really silly. The sky is not falling no matter what happens...It's just another day.

 

[jlambrig]

Originally posted by Peter Pirate
Is the Boss still the 'Boss'?

Yes

 

[DancingBear]

Originally posted by CasualObserver

"2--Give Job$ what he wanted, and, in exchange, extend the 5 (which would then be really 4) picture deal, on terms somewhat more favorable to Pixar than the original deal."

Bear, I noticed you really glossed over this one. This is the option that Voice had been saying would have been better in the long run for Disney. Remember, "Give a little, get a lot". What you are not wanting to acknowledge is that it is in Disney's best interest to keep a relationship with Pixar.

I don't see how I "glossed over this one." After that paragraph, I said:

The first problem with this scenario is there is little evidence that Job$ would have extended the deal----after all, the whole point of having TS2 "count" was to get out of the deal faster.

Second, what sort of extension do you think might have been negotiated? Cars (which Eisner would have just given up) plus 2 more? 3 more?

And I would add, at what price would such an extension have been obtained? Just what sort of a deal do you think was out there?

 

[raidermatt]

You're right, Pete, the sky is not falling.

But if everything we discussed had to be a falling sky, the boards would be pretty slow.

Should the relationship end, its a negative for Disney. We can all agree on that, since we have already agreed that a new deal would be good for Disney.

IF Disney truly commits to creating their own CGI, with a goal of being the best in the Biz, I agree that its possible they could do it.

Its just that I haven't seen anything to make me believe they will make that committment. On the contrary, most of what I see indicates they have no intention of making such a commitment. Doesn't mean it CAN'T happen, just that the odds are against it.

 

[crusader]

The truth is Matt, that if they don't re-sign with Pixar Disney has to seriously consider producing CGI animation in-house and competing directly against them.

I have the same question as Mr. Viking which is: what would it realistically entail at this point? Even if Pixar has proprietary rights to certain software applications, hasn't Dreamworks already proven this market isn't a monopoly? That tells me the technique exists within the public domain and Disney certainly has the capability to tap it.

If this deal does go South, Pixar begins that inevitable transformation of moving in the direction of the money - and they're going to need it.

 

[DancingBear]

Originally posted by crusader
Even if Pixar has proprietary rights to certain software applications, hasn't Dreamworks already proven this market isn't a monopoly?

Actually, I believe that Dreamworks uses Pixar's Renderman software. But, Blue Sky has their own technology, and there are others out there.

Edited to add:

Yes, Pixar's latest 10-K says Dreamworks is a Renderman customer. It also says this about CGI competition:

Several movie studios have developed their own internal computer animation capability specifically for the production of animated films and live action films. For example, DreamWorks SKG (with PDI) successfully produced Antz in 1998 and Shrek in 2001. Fox successfully produced, through its subsidiary Blue Sky, Ice Age, which was released in 2002. Other movie studios may internally develop, enter into a co-production agreement with a third party, license or sub-contract three-dimensional animation capability. Further, we believe that continuing enhancements in commercially available computer hardware and software technology have lowered and will continue to lower barriers to entry for studios or special effects companies which intend to produce computer-animated feature films or other products. For example, SGI’s Alias/ Wavefront subsidiary licenses “Maya,” which is its next generation three-dimensional software for creating high quality animation and visual effects. “Maya” incorporates many new features and could be used to make a computer-animated feature film.....

Computer Graphics Special Effects Firms. We also expect to compete with computer graphics special effects firms, including ILM, Rhythm & Hues/VIFX, Tippett Studios, Digital Domain, and Sony Pictures Imageworks. These computer graphics special effects firms may be capable of creating their own three-dimensional computer-animated feature films or may produce three-dimensional computer-animated feature films for movie studios that compete with us. For example, ILM has already created and produced three-dimensional character animation which was used for several central characters in the live action film Star Wars Episode II: Attack of the Clones, and ILM has a royalty-free, paid-up license to use our RenderMan® software and to obtain at no cost all enhancements and upgrades thereto. Other computer graphics special effects firms have licensed or may license RenderMan®. Accordingly, our RenderMan® software may not provide us with a competitive advantage. We also compete, or may in the future compete, with the above firms with respect to animation products other than feature films. We believe that the primary competitive factors in the market for three-dimensional computer animation for animated feature films and other animation products include creative content and talent, product quality, technology, access to distribution channels and marketing resources. We believe that we presently compete favorably with respect to each of these factors.

Software Publishers. We also experience competition with respect to our RenderMan® software product. In particular, we compete with makers of computer graphics imaging and animation software, principally SGI (which acquired Wavefront Technologies, Inc. (“Wavefront”) and Alias Research, Inc. (“Alias”)), MentalImage GMD and Avid Technologies (which distributes the MentalImage product). MentalImage, Avid and SGI (which through its Alias/ Wavefront subsidiary licenses “Maya”, a three-dimensional software for creating high quality animation and visual effects), are each marketing competing rendering software products, usually at lower prices than ours. SGI has licensed several of our patents that cover certain rendering techniques and may therefore be better able to market products that compete with our RenderMan® software. Under appropriate circumstances, we might elect to license our rendering technology patents to other companies, some of which may compete with us. In addition, as PC’s become more powerful, software suppliers may also be able to introduce products for PC’s that would be competitive with RenderMan® in terms of price and performance for professional users. We believe that the primary competitive factors in the market for rendering software include product quality, price/performance, technology, functionality, breadth of features and customer service and support. We believe that we presently compete favorably with respect to each of these factors.

 

[DancingBear]

Read this article a little while ago, which was interesting. Though this technology is not strictly for animation, it could be used for it.

http://millimeter.com/ar/video_creating_virtual_performers/