Childhood is the phase of our lives filled with superheroes, princesses, mystical animals, monsters living in some wonderland, and all other kinds of fantasies. These memories of our childhood stay with us through adulthood and become an escape from reality for us. However, have you wondered how our favorite movies come into being? What’s all the incessant background work involved in the creation of some of the most popular animated movies?

I’m sure the two words which immediately come to one’s mind when they hear of animation are Disney Pixar. Over the years, it has completely redefined and reshaped the animation world. With universally known movies like Toy Story, Cars, Coco, Up, Monsters Inc., Ratatouille among others, Disney Pixar has set a benchmark for animated movies. However, how many of you know that Disney and Pixar were actually completely separate companies not so long ago and that Disney acquired Pixar for a whopping $7.4 billion? Let us take a look into the past.

It all started in 1995 with a collaboration between Disney and Pixar for Toy Story, the world’s first computer-generated animated film. Due to the highly successful collaboration owing to Toy Story’s immense popularity, Disney and Pixar signed a contract of producing 5 movies together for the next 10 years. Nearing the end of the term of the contract, Disney announced that it would acquire Pixar for $7.4 billion. It was Bob Iger, the CEO of Walt Disney Company, who on a trip to Hong Kong Disneyland had this seemingly odd realization while watching the parade, that all of the characters had been created by Pixar and not one by Disney. Trusting that his epiphany of Disney losing its animation king tag over the years was genuine, he got a financial analysis done and it was revealed to him that Disney had actually lost money in its deal with Pixar. He presented all of this to the Board of Directors and was given a thumbs up on a possible acquisition of Pixar. He approached Edwin Catmull, the president of Pixar and John Lasseter, the Chief Creative Officer of both Pixar and Walt Disney Studio, and convinced them of the success of this merger. Initially, both were wary owing to the failed negotiations in the past between Steve Jobs, the then primary investor and Chairman of Pixar and Michael Eisner, the then CEO of Disney, but it was Jobs himself who encouraged them to go forward and accept the deal. There were also some explicit conditions laid down by the two which basically protected the identity of Pixar, including the HR policies and employment contracts remaining intact. Thus, the big day came on 25th January 2006 and the papers were signed.

When the big news was announced, there were a lot of raised eyebrows. Mergers are tricky and complicated and involve a huge amount of trust being reposed in each other, something which was missing between the top officials of both Disney and Pixar. At that time, Disney was going through a major identity crisis itself, losing its animation culture, among many other management issues. There was a major difference in the work culture of both Disney and Pixar and overcoming it turned out to be a hurdle in itself. Lasseter said “The way we saw ourselves at Pixar, we were a filmmaker-driven studio. What developed in that second heyday of animation under Katzenberg was an executive-led studio.” The new management was also stern in keeping Pixar and Disney separate, mostly for Disney’s sake.

Surprisingly, the merger turned out to be pretty well. It allowed both Disney and Pixar to compensate for its shortcomings through the strength of the other. While Disney benefitted through the easy access to Pixar’s innovative technology and techniques and of course the reduced competition since Pixar was the biggest competitor for Disney, Pixar also had something to benefit in terms of reduced costs and increased investment and marketing merchandise. Pixar gained access to Disney’s widespread distribution channels and Disney slowly started to revive its creativity. Soon enough the distinct corporate cultures began to integrate while both retained some integral aspects of it to protect its sanctity.

The Disney-Pixar merger story is one of the most talked-about of all times. When two of the biggest animation studios come together and create movies together, it’s one thing. However, when, the two are integrated literally, hundreds of doubts and questions come to the forefront and become capable of creating internal warfare. Regardless, Pixar has always remained assertive that Disney fulfilled whatever promises it made and that’s one of the biggest marks of the success of this merger. This story has been nothing less than one of the fairy tales Disney Pixar has been known to create, with everyone overcoming all hurdles and living happily ever after.

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