When he joined Pixar in 1974, Ed Catmull sought to do one thing: push the boundaries of computer animation. Under Catmull’s guidance along with the support of chief creative officer John Lasseter and former chairman Steve Jobs, that vision culminated 21 years later with the release of Toy Story, the highest grossing film of 1995. Today, Pixar, a Disney subsidiary, is one of the premier production houses in Hollywood, and critics and audiences revere the studio’s films for their appeal, humor, and memorable stories.
The Business of Pixar
Lasseter frequently refers to “the nobility of entertaining people” as the core belief on which Pixar’s business model rests. Foundationally, however, Pixar is a film business, and this translates into developing well-liked and high-quality movies that gross more than they cost to produce, market, and distribute. In aggregate, Pixar has been phenomenally successful with regards to both critical reception and gross sales.
Pixar’s film budgets are not necessarily smaller than comparable live-action films, even though the studio relies on digital animation. Up, for example, is estimated to have cost $175 million to produce, but whereas live-action films spend massively on A-list actors, sets, and kinetic sequences, Pixar’s costs are concentrated in animation rendering, a large creative and technical staff, and voice talent.
Pixar in Practice
With some exceptions, Pixar’s film production model is similar to those of other animation studios, but its key competitive advantages lay within the company’s “software” – its culture of quality control and focus on people.
At its core, Pixar operates as a filmmaker driven as opposed to executive led studio, and the company’s quality control practices align closely with this belief.
Film production is analogous to traditional assembly line manufacturing: a film is passed linearly from team to team as it moves from ideation to distribution. Similar to Toyota’s jidoka and kaizen practices, Pixar empowers employees at each level of the process to question established protocols, innovate, and make and correct mistakes.
Additionally, Pixar employs a unique quality control mechanism, known as the Braintrust, which provides directors with film feedback during later stages of production. The committee is composed of carefully selected individuals with creative or storytelling backgrounds, such as former directors and writers along with Lasseter, as opposed to studio executives with little relevant experience, and it meets on demand with directors to review films-in-progress. Directors are not required to implement recommendations from the Braintrust, thereby removing power dynamics and encouraging candid conversation. Braintrust recommendations propelled Toy Story 2, originally scheduled for a direct-to-video release, to a nearly $500 million success.
Most film studios operate in a process-focused manner, and conventional movie making wisdom holds that strict adherence to schedules, budgets, and information flow mechanisms is essential to a timely and economical release. Pixar, however, emphasizes people over process.
The company invests considerably in recruiting, developing, and supporting its employees, and Catmull reasons that these employees will function in a more productive, collaborative, and adaptive manner in an environment free of rigid structures. Employees, for example, are free to communicate fluidly across the organization without authorization from supervisors (i.e., a technical artist can reach out to a writer to better understand a character). More importantly, Pixar’s smart, creative workers continually innovate towards quality. This emphasis enables Pixar to develop its own stories and scripts, a practice not common in the industry and one that has contributed substantially to the studio’s success.
Catmull’s approach to managing software within Pixar’s operating system has resulted in a distinct competitive advantage over other film studios. Following Disney’s purchase of Pixar in 2006, Catmull assumed control of the ailing Walt Disney Animation Studios in addition to Pixar and has since introduced Pixar’s processes to Disney Animation, resulting in a remarkable revitalization (most recently Frozen, the fifth highest grossing film ever). This success is indicative of the importance of properly managing infrastructure within operating systems.
- Catmull, Ed. Creativity, Inc. New York: Random House, 2014.