Business Report for Pixar
06/11/2014
Student Number: 121212212
Pixar was founded as The Graphics Group, which was one third of the Computer Division of HYPERLINK "http://en.wikipedia.org/wiki/Lucasfilm" \o "Lucasfilm" Lucasfilm that was launched in 1979 with the hiring of Dr. Ed Catmull from the New York Institute of Technology (NYIT),[6] where he was in charge of the Computer Graphics Lab (CGL). At NYIT, the researchers pioneered many of the CG foundation techniques—in particular the invention of the "alpha channel" (by Catmull and HYPERLINK "http://en.wikipedia.org/wiki/Alvy_Ray_Smith" \o "Alvy Ray Smith" Alvy Ray Smith);[7] years later the CGL produced an experimental film called The Works. After moving to Lucasfilm, the team worked on creating the precursor to HYPERLINK "http://en.wikipedia.org/wiki/RenderMan_Interface_Specification" \o "RenderMan Interface Specification" RenderMan, called REYES (for "renders everything you ever saw"); and developed a number of critical technologies for CG—including "particle effects" and various animation tools. In 1982, the team began working on film sequences with Industrial Light & Magic on special effects.[6] After years of research, and key milestones in films such as the Genesis Effect
Which numbered 40 individuals back then, HYPERLINK "http://en.wikipedia.org/wiki/Pixar" \l "cite_note-Pixar_Founding_Documents-1" [1] was spun out as a corporation in February 1986 with investment by Steve Jobs shortly after he left Apple Computer.[1] Jobs paid $5 million to George Lucas for technology rights and put them and $5 million cash as capital into the company.[1] A factor contributing to Lucas' sale was an increase in cash flow difficulties following his 1983 divorce, which coincided with the sudden dropoff in revenues from Star Wars licenses following the release of Return of the Jedi. The newly independent company was headed by Dr. Edwin Catmull as President and Dr. Alvy Ray Smith as Executive Vice President. They were joined on the Board of Directors by Steve Jobs who was Chairman.[1]Initially, Pixar was a high-end computer hardware company whose core product was the Pixar Image Computer, a system primarily sold to government agencies and the medical community. One of the buyers of Pixar Image Computers was Walt Disney Studios, which was using it as part of their secretive CAPS project, using the machine and custom software written by Pixar to migrate the laborious ink and paint part of the 2-D animation process to a more automated method. The Image Computer never sold well.[8] In a bid to drive sales of the system, Pixar employee John Lasseter—who had long been creating short demonstration animations, such as HYPERLINK "http://en.wikipedia.org/wiki/Luxo_Jr." \o "Luxo Jr." Luxo Jr., to show off the device's capabilities—premiered his creations at SIGGRAPH, the computer graphics industry's largest convention, to great fanfare.[8]Inadequate sales of Pixar's computers threatened to put the company out of business as financial losses grew. Jobs invested more and more money in exchange for an increasing portion of the company, reducing the fraction of ownership by the management and employees until after several years he owned essentially all the company for a total investment of $50 million. Lasseter's animation department began producing computer-animated commercials for outside companies. Early successes included campaigns for Tropicana, Listerine, and Life Savers.[9] In April 1990 Pixar sold its hardware division, including all proprietary hardware technology and imaging software, to Vicom Systems, and transferred 18 of Pixar's approximately 100 employees. The same year Pixar moved from San Rafael to Richmond, California.[10] During this period, Pixar continued its successful relationship with Walt Disney Feature Animation, a studio whose corporate parent would ultimately become its most important partner. In 1991, after a tough start of the year when about 30 employees in