To Pixar and Beyond by Lawrence Levy
My Unlikely Journey with Steve Jobs to Make Entertainment History
To Pixar and Beyond covers the development and execution of Pixar’s business plan in the early 1990s, ending in the sale of Pixar to Disney in 2006. The details of Lawrence and Steve Jobs planning their negotiation of a second film contract with Disney were especially fascinating.
The main focus of the book is on business strategy, not so much on Pixar’s films. It has some overlap with the time period and events in DisneyWar by James Stewart. I recommend this if you like reading about business planning or have specific interest in Pixar, Steve Jobs, Disney or the entertainment industry.
My Favorite Quotes
- Story comes first. Great graphics will keep us entertained for a couple of minutes, it is story that holds us in our seats. -John Lasseter
- One never knows if an event that appears detrimental, is, in fact, part of a larger pattern that we cannot see. -Lawrence Levy (referencing how Steve Jobs, in 2004, called off negotiations with Eisner and Disney to extend their agreement. Eventually leading to the sale of Pixar to Disney when Bob Iger became CEO)
- The life of sensation is the life of greed, it requires more and more. The life of the spirit requires less and less, time is ample and its passage sweet. -Annie Dillard, The Writing Life
- Lawrence used the book Entertainment Industry Economics by Hal Vogel as a guidebook in developing the financial models for Pixar.
- Pixar’s successful process relied much on the relentless critique of each other’s work, and the willingness to put aside ego enough to hear that critique.
- Pixar ceded creative control and decision making to the creative team. This was contrary to the popular Hollywood model of the executives making creative decisions (example Jeffrey Katzenberg at Disney).
- Steve Jobs first became a billionaire from the Pixar IPO.
- When going public for their IPO, investment bankers examined every aspect of the company, it’s history, assets, debts, products, profits, markets, distribution channels, management team, competition, and anything else relevant to its success.
- Melding business realities with creative priorities was always integral to Pixar’s collaboration and business model.
Four Pillars of the Pixar Business Plan
As developed by Lawrence Levy and Steve Jobs
- Increase Pixar’s share of film profits to at least 50%.
(4 times increase of the current deal with Disney at that time)
- Raise money to finance their own films. At least 75 million dollars to pay for production costs. (Pixar would have to pay all, or a large part, of production costs of its own films. This is a key requirement of negotiating for an increased share of profits)
- Expand the studio to increase the rate of producing films.
(One film every 18 months instead of every four years)
- Build Pixar into a worldwide brand.
Two factors that determine one’s capacity to affect change.
- Leverage (bargaining power or strength)
- Tactics you employ to extract the best terms you can, given your leverage
- How you put the leverage to work for you.
- Courage, fear, tenacity, trustworthiness, creativity, calm, the willingness to walk away, to behave irrationally.
In Pixar’s first agreement with Disney, Pixar had fared poorly in terms of both leverage and negotiation.
Steve Jobs and Lawrence Levy brainstormed. They created this list of pros and cons on a whiteboard before starting Pixar’s second negotiation with Disney.
Disney Points Column
- No obligation to change contract.
- Can invest in computer animation themselves.
- Other Pixar options are inferior.
- Pixar has had only one hit (Toy Story).
- Animation might be losing priority for Disney.
Pixar Points Column
- IPO money to pay for productions.
- Toy Story success.
- Dreamworks threat to Disney (might make Disney less willing to alienate Pixar).
- Better deal if they wait.
New Deal Column
These were Pixar’s requirements of the negotiation, they would walk away from the negotiation if the new deal did not include everything below.
- Creative control.
- Favorable release windows.
- True 50/50 profit share.
- Pixar brand (equal branding with Disney on all materials).
One of the marks of a successful negotiator is knowing where to draw the line, so that things can move forward.
In negotiation, there is a constant tension between momentum and fear.
It comes down to an exercise in risk management.
Aspects of Pixar that had a big influence on Steve Jobs
- Becoming a billionaire.
- Experiencing a stellar comeback in the eyes of the public.
- Learning the ins and outs of the entertainment industry.
- Enjoying a transformed relationship with Pixar.
- Bringing both business and creative imperatives into harmony.
Combined with Steve’s aesthetic genius and product vision, these influences made for a very potent force as he jumped into the vortex at Apple.
One could make the case that without Pixar, the revolution ushered in by Steve’s second act at Apple, might never have occurred.
Lawrence Levy’s Reflections on His Career and Life
Lawrence Levy always found much to enjoy in his work
What he enjoyed as an attorney.
He prided himself on crafting complex deals and artfully expressing them in written contracts.
What he loved as an executive
The creativity and finesse involved in developing and implementing a strategy.
The thrill of negotiation.
The opportunity to be part of a team aiming for great things.
Something was missing. He saw the world of business and finance as a game of sorts.
He found it only about products, profits, market share, and competition.
The priorities generated challenges around identity and meaning.
Lawrence resolved to take a sabbatical to read, learn, and explore his interests more deeply.
Key Locations, People, Dates
Time Period: 1986-2013
Point Richmond, California
Palo Alto, California
Skip Brittenham (Hollywood Lawyer on Pixar’s board of directors)
Larry Sonsini (Lawyer on Pixar’s board of directors)