The Most Powerful Man in Film Has Arrived, With Two Aces: Disney Animation and Pixar

Who is John Lasseter? When we say Steve Jobs redefined entertainment too, Lasseter helped him do it. He co-founded Pixar, directed Toy Story, and became chief creative officer of Disney’s animation studio. Above all, he brought Disney animation back to life.

John Lasseter has come to China, nearly 20 years after his last visit. Back then, he came for Toy Story, the world’s first computer-animated feature. He, Steve Jobs, and Ed Catmull were Pixar’s three central figures; Lasseter was its chief creative officer. Think of the Pixar films you remember: Monsters, Inc., with its furry monster and one-eyed sidekick; The Incredibles, with an entire family of superheroes; and WALL-E, with two robots who know how to fall in love. Lasseter had a hand in them all.

Perhaps those characters have made such a lasting impression that people still think of him as “the Pixar guy.” But his role changed after Disney acquired Pixar in 2006. He oversees Pixar and Disney animation as chief creative officer of both studios. Lasseter also had a hand in Frozen, the film you have heard about constantly since last year and cannot seem to escape.

He has even changed Disney and, through it, influenced Hollywood. We can take 2006, when Disney bought Pixar and Lasseter took charge of Disney animation, as a dividing line: before and after his arrival at Disney.

What does that mean? If you like animated films, the difference is easy to see. Before, Disney made 2D films such as Beauty and the Beast and The Lion King. They still looked, in a sense, like drawings on paper. Afterward, its films looked more like Pixar’s Toy Story: three-dimensional animation made on computers, detailed enough to show individual strands of fur on a cinema screen.

So the studio that once made films in the style of The Lion King can now make Wreck-It Ralph and Frozen. The difference lies in how the films are made, and Pixar’s technology has been crucial. That is one of the major changes Lasseter brought to Disney.

1. Before the acquisition, Disney and Pixar had already helped save each other

Pixar was, at heart, a computer company. That helps explain why Steve Jobs took an interest in it in 1986, shortly after Apple’s board pushed him out. Pixar initially made computer hardware. It sought customers for a product called the Pixar Image Computer, made animation for government agencies and medical institutions, and produced TV commercials. It also made a few dazzling shorts, including the playful desk lamp in Luxo Jr., which became a classic. But short films could not keep the company alive.

Pixar laid off staff and sold its hardware division. Jobs kept investing, but things did not improve until Pixar received its first commission from Disney in 1991. The technology Pixar had developed finally had a purpose: making something wonderful, the first computer-animated feature, Toy Story. Disney invested US$26 million.

Disney became Pixar’s biggest customer, and their collaboration grew from there. Their agreement covering eight animated films followed the same basic arrangement: Pixar made the films and Disney distributed them. The two split box-office revenue and production costs, while Disney kept the distribution profits. In the years before the acquisition, that arrangement became a source of friction. Pixar thought the division of profits was unfair. Disney also held the rights, meaning that if the two sides failed to agree on new terms, Disney could make sequels to a series such as Toy Story without Pixar. Negotiations dragged on until Disney agreed to buy Pixar for US$7.4 billion.

Curiously, Disney’s own animated films had been struggling in the years before the acquisition. Its partnership with Pixar had been a temporary lifeline for Disney as well.

2. Pixar made money from films and software, and Lasseter was essential

Pixar went public in 1995, the year Toy Story was released. On the strength of the film’s success, it achieved what was then the highest share price at an initial public offering. The reason for listing was simple: Pixar needed money. Jobs had already put in US$50 million, and at the time a single flop might have put the company out of business. Going public changed that.

Pixar had two lines of business, animation and software, and depended heavily on the former. As the financial figures below show, its weaker years of 1998 and 2001 followed years in which it released no new film.

The key person is coming into focus. Of Pixar’s three central figures—Steve Jobs, Ed Catmull, and John Lasseter—Jobs handled business, Catmull handled technology, and Lasseter was the artist. Pixar’s story ideas came from Lasseter. He set new rules and told new stories; more than anyone, he gave audiences a reason to love Pixar.

3. Before it bought Pixar, Disney animation went through a shaky spell

When we think of Disney animation, we think of The Lion King, Pocahontas, Tarzan, and Beauty and the Beast. Now look at the films below. Their worldwide box-office takings ranged from US$100 million to US$300 million, and you may never have heard of many of them. Yet these are the animated films Disney made between 2000 and 2006. As Lasseter said in Hall 1 of the Shanghai Film Art Center, Disney went through a period without making princess films. But perhaps that was not the real problem. Its lack of fresh ideas was.

Those ideas were at Pixar—or, more precisely, with Lasseter and the team he calls “smarter than me.” The team had five central members: Lasseter; Brad Bird, who made The Incredibles; Pete Docter, who made Up; Andrew Stanton, who made WALL-E; and Lee Unkrich, who made Toy Story 3.

Emeryville, the Northern California city where Pixar is based, was a place alive with ideas.

“We knew they wanted to steal John away from here, but John understood how important this place was to him,” Catmull recalled. “I remember him saying, ‘I could go to Disney and be a director, or I could stay here and make history.’”

4. After the acquisition, Pixar had a shaky spell of its own

But Jobs sold Pixar to Disney. As we have seen, the two sides negotiated over profits and rights. Disney badly needed content; Pixar badly needed a better chance of survival. After the 2006 acquisition, though, many wondered whether Pixar had lost its way.

The box office and reception of its subsequent films appeared to bear that out. The three films the two companies truly made together—Cars 2, Brave, and Monsters University—performed poorly at the box office and drew a lukewarm response. Before then, Pixar films had reliably won awards and praise on review sites. These three were different. Cars 2 received the worst reviews in Pixar’s history; Monsters University became the first Pixar film not to receive an Oscar nomination; and Brave had a relatively weak box office.

Many blamed Disney for wearing away Pixar’s character and began to doubt the acquisition. Pixar still had new films with which to prove itself, including the forthcoming Inside Out and The Good Dinosaur. But that was not the heart of the matter.

5. What matters is that Lasseter brought Disney animation back to life

What matters is Frozen. Lasseter made several changes after arriving at Disney. For animation fans, the most obvious was that Disney was making films worth watching again. Its princess films returned, a sign that the animation studio might be finding its way. Each of the three princess films made since Lasseter took over was more successful than the last.

Lasseter brought his way of working from Pixar. Put simply, he dealt directly with the person who had the idea. In interviews, he called this a “system of trust.” He rejected a process with “three or four layers, each with ideas that must be enforced,” and wanted “artists to have ownership of the films they create.” He brought a new way of working, Pixar’s technology, and his approach to storytelling. You can see it in Disney’s 2012 hit Wreck-It Ralph: its nostalgia, the new world it builds within the story—a Pixar hallmark—and its use of Pixar technology. Even its images look like Pixar’s.

6. Cars 2: Pixar’s most tangible gift to Disney

For fans who see Pixar chiefly as a source of emotional stories, Cars 2 is hard to explain. The original Cars, released in 2006, fared poorly with critics and at the box office. Judged as a film alone, it hardly seemed to call for a sequel. Its merchandise told another story. The 2011 sequel was a film Disney had to make: in 2010, Cars merchandise brought in US$2.5 billion, making it Disney’s sixth most valuable merchandise brand, close to long-popular properties such as Barbie and Toy Story.

7. Among the big companies’ animation studios, Pixar is still the strongest

So which animation studio comes out on top? Compared with Blue Sky Studios, Illumination Entertainment, and Sony Pictures Animation, Pixar found the owner that both needed it most and suited it best. Lasseter had worked at Disney before; the two knew each other well. Disney now has a packed slate of animated films. The other big companies’ animation divisions have each produced hits that can keep earning money, but they still seem less developed. What they lack is the full set of strengths Pixar has within Disney: storytelling skill, proprietary technology, a platform, and resources.

DreamWorks Animation is changing too. The Hollywood Reporter recently said it was in talks to sell its animation division to Japan’s SoftBank for US$3.4 billion. Disney and Pixar still have plenty of challenges ahead.

8. To understand Pixar’s nearly 30 years, start with technology

Look back at Pixar’s milestones over nearly 30 years and its history becomes a history of technology. Under Lasseter, Pixar has long used technology to change the course of Hollywood animation. By 2014, it had won 27 Academy Awards, 7 Golden Globes, and 11 Grammys. Yet more important than the Oscars it wins year after year was the early recognition of its technical achievements. You can see the changes in films from Toy Story to Frozen.

One name matters here: RenderMan. Pixar developed this software, whose name translates as “renderer,” in-house in 1989, though its origins go back further. In 1973, Ed Catmull, then a student at the University of Utah and later Pixar’s technical director, began exploring it. The software developed a pixel-depth algorithm called the Z-buffer, which enabled computers to produce complex images. Pixar used the invention in its animated films, and Lasseter brought it to Disney animation.

Its reach goes far beyond Disney. Pacific Rim, The Great Gatsby, The Hobbit: The Desolation of Smaug, Iron Man 3, Gravity—many films you have seen in theaters in recent years used RenderMan. It has become an industry standard.