Company
Overview: PIXAR
Pixar is an Academy Award winning
digital animation studio competing in the entertainment industry, headquartered
in Emeryville, California. The company
produced and released, in partnership with Walt Disney Pictures, three features
that represent half of the top six domestic grossing animated films of all
times: “Toy Story” in 1995, “A Bug’s life” in 1998, and “Toy Story 2” in
1999. Each of those became the highest
grossing animated film for the year they were released. Pixar is working to release “Monsters, Inc.” in November 2001, and
“Finding Nemo” in the summer of 2003. In partnership with Disney since 1991,
Pixar renegotiated the agreement with them in 1997 “ to produce five animated
feature films from which they will equally share the profits generated from
each film and its related merchandise”.
Pixar’s chairman, CEO and co-founder,
is the famous founder of Apple Computers, Steve Jobs. He runs what he calls “a world class animation studio”, which
attracted some of the world’s finest talent in application of computer graphics
in filmmaking. Under his management,
Pixar has established its leadership in the computer animated film industry
through it new generation of computer-animated films. Pixar’s increasingly famous brand is known as a “unique brand of
storytelling with a heart”. I believe
that Pixar will continue this tradition of producing high quality computer
animated features, and is capable of achieving its goal of producing one
feature release per year by 2005.
Pixar is investing more in research
and core technology than any other competitor.
The company created and developed three core proprietary software
systems that represent “a breakthrough in the art of animation”. It also has a talented creative team, and an
expanded production team that can work on more projects simultaneously. The company is well positioned to produce
more award winning movies, and become a competitive player in the industry.
·
Increasing
brand recognition; unique brand of “storytelling with a heart”
·
Strong
reputation; 18 Academy Awards/ Wide appeal to audience
·
Leadership
in the computer animated film industry
·
Strong
financial position/ Six years of profitability / Fourth quarter 2000 earnings
well ahead of “Street” estimates ($0.71 vs. $0.62)/ Increased guidance for next
year
·
Lower
P/E ratio than the competitors (Lower 20’s vs. high 20’s or higher)
·
Talented
management/ Strong creative team
·
Three
core proprietary technologies (Marionette, Ringmaster, RenderMan) for modeling,
animating (including motion control), coordinating projects, rendering
high-quality, photo-realistic images
·
Revenues
come in bursts
·
Timing
and amount of revenues from video, DVD releases, and merchandise sales
·
Agreement
with Disney: co-producing (i.e.,
co-financing, and co-branding, equal sharing of profits from films and
ancillary products)
·
Focusing
on story and creative elements, and productions, since it can utilize Disney’s
worldwide promotion, marketing, and distribution facilities
·
Increased
efficiencies (decreased costs of film and animation services); library of
digital models, sets, etc.
·
Potential
flop of a release (unlikely)
·
Timing
and amount of revenues from video, TV, and DVD releases, and merchandise sales
·
Timing
and amount of distribution costs
·
Competition
from other computer graphics and animation software producers such as Sillicon
Graphics could cut their competitive advantage based on their superior
technology