Walt Disney and Toy Story

Pixar and Disney: A Study of Creativity and Culture In 2005 the managers of Pixar Animation Studios were facing a crisis. The company’s ten-year partnership with Disney was about to end and the company had three options: draft a new agreement with Disney, find a new partner, or set up their own marketing and distribution network.[1] Renewing the partnership with Disney seemed, to many, like an obvious choice. The arrangement had been a boon to the fledgling studio when it was first starting out. Disney had provided most of the funding[2] and had given Pixar’s movies top flight marketing support[3] in exchange for ownership of Pixar’s characters and a substantial percentage of the profits. Pixar had grown, however, and had accumulated enough funds to finance its own films.[4] Forty-five percent of the operating income for Disney’s film operations came from the sale of Pixar’s movies, and Disney’s own marketing research showed that mothers trusted the Pixar name more than Disney.[5] A study of box office receipts revealed that four of the ten top-grossing “Disney” movies in the history of the company (including live action films) had been Pixar products. Pixar’s Finding Nemo, released in 2003, was the highest grossing film ever released under the Disney banner though Disney’s own studios had not produced the film. It had broken the record formerly held by The Lion King.[6] Disney’s executives, however, had refused to “give” on a number of important issues, and Pixar’s managers had given up on trying to negotiate with them in 2004.[7] They were preparing to walk away from their beloved characters and start over when Michael Eisner resigned from the CEO position and Bob Iger took over.[8] Steve Jobs, Pixar’s chairman and CEO, had dealt with Iger when he was at the helm of ABC television. The two of them had worked out the revolutionary arrangement of making episodes of ABC’s most popular shows available to iPod users right after they had aired.[9] Jobs met