THE RISE AND FALL OF THE

DISNEY-PIXAR ALLIANCE

Amirhossein Semsarzadeh

1390

PIXAR Originally founded by : Gorge Lucas

Goal: develop computer-generated images

Bought by Steve Jobs: 1986

PIXAR Created:

Software to create 3-dimensional animated scenes

Develop various short subjects Decided:

Move into animated feature films Didn’t have:

CapitalProduction skillsDistribution skills

DISNEY Long-time leader in traditional animated

films Owner of a variety of entertainment

distribution True power in Hollywood under the

direction of CEO Michael Eisner Have 4 business segments:

Media networksParks and resortsStudio entertainmentConsumer products

1991 Pixar and Disney agreed to collaborate

on 3 films:Disney is to do marketing and distribution.Toy Story

THE MOTIVES FOR EACH PARTNER For Disney:

Disney can acquire core strengths of Pixar in producing computer motion pictures

The decrease in competition Disney cannot compete in term of producing the

animations that attract customers as much as Pixar Access to technology

For Pixar: don't have to invest in production line for

making merchandise and home entertainment Being able to produce the other lines of

products such as apparels, toys, and so on

1997 Extended to 5 a film-deal

DISNEY- PIXAR ALLIANCE

1390آذر ماه آزيتا كرمي پور –

INITIALLY Disney kept 85% of the profits Retained the intellectual property rights

to the films

GROWTH Pixar’s technical skills Pixar’s story-telling skills

Split of revenues after Disney took a 12.5% distribution fee

2004 Alliance needed renewal Jobs and Eisner were not able to come

to an agreement

Jobs was not willing to pay more than 5% for distribution

Eisner had come under pressure to step down from his post as CEO

RESULT Disney

Animation studio shrink to nothingLost it’s brand identification advantageWasn’t able to offer distribution beyond that

of several other studiosThe bargain had become obsolete

Pixar Was ready to try its luck in the market

RESULT (2004) Disney

Is left with the sequel rights to the first six films

Without the technical competencies of Pixar

QUESTIONS 1. what are the key success factors of

alliance?

1. WHAT ARE THE KEY SUCCESS FACTORS OF ALLIANCE? Both Disney and Pixar offer each of their

core strengths to the alliance. Trust in sharing the information to

another party. Pixar has to share its know-how in

producing the animation and human resources to Disney and vice versa.

Tolerance.

QUESTIONS 2. noting that “Warners brothers” and

“twentieth century fox” are two main competitors of Disney, as the CEO of Disney how do you continue to work with Pixar?

2005

2006

2010

Thanks for your attention