Subtitles section Play video Print subtitles (gentle music) - [Voiceover] Most of us know Pixar as the established dominating animation studio that it is today, responsible for some of the greatest animated movies of our time. But the truth is that this massively successful studio came from a very humble beginnings. In fact, on it's first few years the studio was constantly on the verge of bankruptcy, losing millions of dollars even after the success of Toy Story. In this video I'll tell you the story behind Pixar and how founding it was made possible thanks to three very different people with very different talents. (popping) (rhythmic techno music) The story of how Pixar came to be revolves around three major players, an artist, a scientist, and a businessman. All three working together yet separately to one day find each other and create something amazing. The artist of this story is a guy named John Lasseter. You've probably heard that name. John would become an Academy Award winning director responsible for some of Pixar's greatest films including Toy Story. But back in 1975 he was a freshman at a brand new program at CalArts learning Disney style animation. The program was taught by industry legends including some of Disney's Nine Old Men. His classmates included Tim Burton and Brad Bird who would later become prolific filmmakers themselves. This was a very exciting and creative environment for an animation student. During his time at CalArts John created two student Academy Award winning films and after graduation he got his dream job, he was hired by the Walt Disney Animation Studios. (dramatic music) During his time at Disney working as an animator he stumbled upon computer animation. He had an idea for making an animated film using computer graphics for the environment and pencil animation for the characters. He pitched that idea to Disney executives and they told him, "The only reason we would consider "using computer for animation "is if it will make it faster or cheaper." Shortly after that pitch John was fired from the studio. At about the same time George Lucas hired a guy named Ed Catmull to develop a film editing system and digital sound editing system, all to advance the computer graphics and create ground breaking visual effects for his films. Ed Catmull grew up loving animation, watching cartoons and all Disney films his entire childhood. He gave up his dream of becoming an animator, thinking he wasn't good enough and pursued a career in science. He studied computer science in the University of Utah where he earned his doctorate and has made ground breaking work in the field of computer imagery. He was then asked to run the computer graphics lab in the New York Institute of technology. Ed was a brilliant scientist responsible for some of the most commonly used principles of computer animation such as Z-buffer, texture mapping, and subdivision surfaces. He basically invented 3D graphics as we know it. While working at Lucas Films Ed asked John to join his division after meeting him at an industry event. Nothing having the same dream of one day making the first computer animated feature film. The two hit it off right away, but at that time, 1983, that dream was still far away. (lighthearted music) That division in Lucas Films, then called the Computer Graphics Division, produced some of the most revolutionary uses of computer imagery in films for that time. They produced the first completely computer generated scene in Star Trek Wrath of Khan and the first computer generated character for Young Sherlock Holmes. Within that small division John made the world's first animated short film using computer animation, The Adventures of Andre and Wally B. Creating such complex imagery required building a powerful custom made computer. That computer was called the Pixar Image Computer. Because of the high demand for computer imagery and advanced computer graphics in other industries the computer graphics division was reimagined as Pixar. Still dreaming on making a computer animated full length feature, a dream George Lucas had no interest in, Ed looked for an investor to find such a huge undertaking. But for a long time there were no takers. Meanwhile at Cupertino, Steve Jobs who was recently fired from Apple founded his next company called, well, NeXT. Steve was one of the prospect investors called to take a look at Pixar and he decided to invest. He bought Pixar from George Lucas for five million dollars, throwing an additional five million to keep the company running. After the acquisition the team wanted to make another animated short to establish who they were and stay on the track of filmmaking. John, who loved animating inanimate objects, single handedly animated a short film about a lamp and it's offspring titled, Luxo Junior. That short film was later nominated for an Academy Award and was the first computer generated short to ever receive that nomination. The lamp from that film then became Pixar's mascot. Despite the massive potential though, Pixar was still struggling. They were licensing their rendering software. RenderMan, which became the industry standard for visual effects in films used in major pictures such as Jurassic Park. But despite that they still couldn't turn a profit. They started doing commercials, getting clients like Trident and Tropicana. They did medical visualization, seismic imaging, they sold their hardware, the Pixar Image Computer, which was very expensive. Yet with all their effort they couldn't make their product commercially viable enough to sustain themselves. Steve Jobs was losing about one million dollars every year for five years. The dire financial problems didn't stop the team from making more computer animated shorts. Their third film, Tin Toy, telling the story of toys trying to escape a terrifying baby won the Academy Award in 1988. Disney, who not that long ago before had fired John, saw the success of his shorts and asked him to come back and direct a feature film for them. This was a life long dream for John and he was currently working on a company on the brink of bankruptcy. Yet he refused Disney and he stayed with Pixar still dreaming to make the first computer animated feature film. (subdued music) After the success of Tin Toy the idea of an entire film from the toy's point of view stuck with them. And despite refusing Disney not too long beforehand, he knew that if he wanted to make a fully length film they would need the financial support of a larger studio for marketing and distribution. Disney was the perfect candidate. He pitched them the idea and they loved it. At that time animated feature had only one style, the Disney style. That style was so established that when Tom Hanks was asked to do the voice for the film he asked, "You're not gonna make me sing, are ya?" But the people at Pixar wanted to do it differently. They had a set of rules they set for themselves. There would be no songs. ♫ Mister I'll make a man ♫ Out of you ♫ No "I want" moment. ♫ I want to be where the people are ♫ No happy village. ♫ Bojour ♫ Bojour ♫ Bojour, Bojour, Bojour ♫ No love story. ♫ Can you feel the love ♫ And no villain. This went against everything that was proving to be working in the animation industry at the time. Despite their drive to do something different Disney executives were at their backs giving them notes and ideas. They were the experienced studio, they though they knew what makes animated films work. After a year of preparation, working on story boards and story reels, guided by Disney they screened the pitch of what would later become Toy Story. Disney hated it. It wasn't funny, it wasn't moving, Woody was a horrible character. The film was clearly not working, Disney shut down production the next day. (lighthearted music) This could have been the end for Pixar. However, John did not give up on the story he believed in. Within a period of three weeks with a talented yet small team he completely re-did the story like originally he wanted to without all the notes and ideas from experienced Disney executives. They had a second screening and this time the story worked, production was back on track. The film took almost five years to make, and in 1995 it was released to become the highest grossing film of that year, making 192 million dollars domestically and 362 million dollars worldwide. The film got three Oscar nominations and John received a special achievement award for making the first computer animated feature film. It seemed that Pixar was is the clear, the studio was now a success and their worries were over. But that was not the case. There was one big problem. According to the deal they made with Disney Pixar didn't have the rights to any of the profits for merchandise, and in fact barely made any money from the film. They were still struggling financially. They decided that their only choice was to go public in order to raise capital. They went on to be the biggest IPO of 1995, exceeding even Netscape, raising 132 million dollars. (gentle music) Disney wanted to renew their agreement to distribute more Pixar films, and they signed a new contract to produce five more films together over the period of 10 years, this time dividing the profits 50/50. Pixar was still, however, a single success story so far, not sure if Toy Story was just a fluke. So it was their second film that would determine the future of the studio. Luckily A Bug's Life would become the most successful animated film of that year. The studio started growing rapidly and their headquarters became too small to host the number of people in it.