Wednesday, July 5, 2017

This Day in Pixar History: Ed Catmull and the (First?) Computer Animated Film

45 years ago, in 1972, Pixar co-founder Ed Catmull and Fred Parke created what may be the very first digital 3D film. They made this film while pursuing upper graduate degrees at the University of Utah. The film is short, and is an animation of Ed's left hand. I really enjoy how, at one point, the camera flies inside the model of the hand and into one of the fingers. Part of this animation was even used in the 1976 film Futureworld.

I think the best way to watch this film is via Robby Ingebretsen's website. Robby is the son of Robert Ingebretsen, who assisted with the creation of the film, and Robby gives a great description of the film, plus some details of meeting Ed Catmull at Pixar and getting a tour of the studio. The comments to Robby's post are also fascinating, and include many from individuals (or their family members) involved in the early computer graphics field. I love the details like how the film was created on two PDP-10 computers (My computer graphics course at the University of Minnesota was on a PDP-11). It's such a great look back at the start of computer animation.

Thursday, June 22, 2017

This Day In Pixar History: Brave Theatrical Release

Five years ago today, on June 22, 2012, Pixar's 13th film, Brave, had its theatrical release. It opened in first place with over $66 million and went on to make over $540 million worldwide. Brave won a number of awards, including the Academy Award for Best Animated Feature Film, the BAFTA for Best Animated Film and the Golden Globe award for Best Animated Feature Film.

Brave was released with the excellent short film La Luna by Enrico Casarosa, with a beautiful score by Michael Giacchino.

Brave was a great, fresh take on the fairy tale story with strong female characters and a new interpretation of a princess character. It's really the relationship between Merida and Elinor that moves the story forward and sets it apart.

The archery scene where Merida declares she will shoot for her own hand, and splits Dingwall's arrow with her own, still gives me goosebumps. The film then jumps to the fight inside the castle between Merida and her mother; the animation is beautiful and full of such emotion. I also just love the music; I still often listen to the soundtrack (composed by Patrick Doyle), and think Touch the Sky is an awesome song.

I remember being stunned by the complexity of the film - the number of sets; all the atmospheric conditions -  rain, water, mist and fog; the different light conditions - full sunlight, candles and torches, moonlight,  and dark shadowed forests. And how can we forget Merida's wild and crazy hair?! It was a huge leap forward in simulations, photorealistic sets and environments.

Here are some fun facts:
  • The inspiration for the story came from director Brenda Chapman's relationship with her daughter.
  • Sadly, there isn't a director's commentary to the film, but fortunately there is a LARGE number of interesting and entertaining bonus features including ones on the music, the design language of the relationship between Merida and her mother, alternate and deleted scenes, computer-generated bloopers and an in-depth look at director Mark Andrews. The promos for the film were also hilarious!
  • To blow off steam (and to help rejuvenate the creative juices) during the production of the film, the crew would partake in Scottish activities such as eating haggis, wearing kilts and Nerf wars (not sure if that last one really qualifies as purely Scottish!)
  • Two of the songs in the film, Touch the Sky and Into the Open Air, were created by Alex Mandel, who was a Pixar manager. Director Mark Andrews helped come up with the lyrics with Alex on Touch the Sky.
  •  111,394 storyboards were created for the film, compared to 80,000 for Cars 2 and 92,854 for Toy Story 3.

Tuesday, June 13, 2017

The Science Behind Pixar at the Science Museum of Minnesota

The museum is on the banks of the Mississippi River in downtown St. Paul

My wife and I went to The Science Behind Pixar last week on its opening night at the Science Museum of Minnesota in St. Paul, and I wanted to share some thoughts and photos from this amazing exhibition.

Inside the lobby

I want to start with the Science Museum as it has some significance to my wife Lynn and myself. Our first date was at the museum in January of 1982, where we saw Genesis on the domed Omnitheater during a blizzard. We've been to the museum many times since then, at first just the 2 of us, and then with our 3 children. For many years we had family annual passes, and the museum always had creative and interesting exhibits and films. But as the kids got older and became more involved in school activities and sports, we started going less and less. So I was super excited that, 35 years after our first trip there, Lynn and I would be going there to see this exhibition.

And we weren't disappointed! As its name suggests, The Science Behind Pixar is an incredible exhibit that demonstrates the STEM (Science, Technology, Engineering and Mathematics) concepts involved in creating Pixar films. It shows off these concepts in a multitude of ways making it easy for everyone to participate and learn.

The Science Behind Pixar is a 13,000 square foot exhibit that was created by the Museum of Science, Boston in collaboration with Pixar. It opened on June 28, 2015, and began a 10 year traveling tour in early 2016. It's been to The Franklin Institute in Philadelphia, PA and the California Science Center in Los Angeles. It will next be at the Telus World of Science in Edmonton, Alberta and The Henry Ford Museum in Dearborn, MI.

The exhibit starts with a short introductory video, very similar to the Pixar in a Box introductory video and hosted by a couple of characters from Pixar films. Once the film ends you enter the main exhibition area. And the area is huge! My first thoughts when I walked in were how expansive and elaborate it was.

The exhibit is broken up into areas representing the steps of filmmaking, such as rigging, sets & cameras, simulation and lighting. Each of these areas has a number of stations to help you learn more about the concept.

What makes the exhibit so great is the variety of activities, with many that are hands on. For instance, in the rigging area there is a station to adjust Jessie's eyelids and eyebrows to match her expression to different ones from the Toy Story films.

Or you can explore and apply different arm rigs to Woody, Eve and Elastigirl.

I really enjoyed the Working at Pixar stations. These are videos of employees describing what they did at Pixar, maybe how they became interested in computer graphics and animation, and included great nuggets of information on making our favorite films: how they used lighting to make WALL•E stand out amongst the dust and trash, or why they had to move the location of the Eiffel Tower in Ratatouille.

Interspersed among all of this are life sized statutes of characters and plenty of wonderful artwork, maquettes and sculpts.

The Science Behind Pixar is an engaging, informative and fun exhibit. I had walked through most of the areas and tried a number of activities, and was shocked that we had already been there for more than 2 hours! I'll definitely need to go back and check out the areas I missed.

I strongly recommend trying to see this exhibition! It will be at the Science Museum of Minnesota until September 4th.

Friday, June 2, 2017

Cars 3 Sneak Peek at Hollywood Studios

Cruz Ramirez topiary at Epcot's Flower and Garden Festival

I just returned from a trip to Disney World. We had a great time and saw some wonderful Pixar exhibits and shows, such as topiaries that were part of Epcot's Flower and Garden Festival, and the brand new The Music of Pixar Live! at Hollywood Studios.

There was also a Cars 3 preview at Hollywood Studios. Inside the Walt Disney: One Man's Dream exhibit, they were displaying artwork, storyboards and maquettes from the film. 

They also had a 10-15 minute sneak peak of the film, which included a large portion of the Thunder Hollow scene. You've probably seen portions of this in the trailers for the film, with the crazy explosions, a lot of mud and a crazed looking school bus! The extended cut shown in the preview maintains that high energy, and it's a gorgeous scene that must've been a technical nightmare to pull off.

If you're going to Disney World this summer you'll really want to get over to Hollywood Studios and check out this exhibit and sneak peek. I'm hoping that as we approach fall, they'll have a similar exhibit for Pixar's next film, Coco!

Cars 3 will be in theaters in exactly 2 weeks from today, on June 16th!

Jackson Storm poster at Hollywood Studios

Monday, May 29, 2017

Pixar Topiaries at the Epcot 2017 Flower and Garden Festival

The annual Flower and Garden Festival is one of my favorite events at Epcot. Epcot is my favorite park at Disney World and is bright and colorful all year long, but come every spring it takes a giant leap up with the festival.

Start with the beautiful and elaborate topiaries, add over 70,000 flower beds and 220 floating pots, include the Garden Rocks concerts and the Outdoor Kitchens, and it's really giving the Food & Wine Festival a run for its money as the holder of my favorite event!

Pixar characters have been a part of the festival for many years. In the past, there's been Mike and Sulley topiaries from Monsters University, and there was the Inside Out Emotion Garden in 2015.

This year was no exception. As has been the case for the past few years, Woody from Toy Story could be found in the American Adventure pavilion in World Showcase.

His friend Buzz Lightyear was in his usual location right outside of the Mission: Space attraction in Future World.

In addition, Lightning McQueen from Cars returned to his same location on the walkway between the Mouse Gear store and Test Track.

In previous years, Tow Mater joined Lightning, but this year Mater was replaced with Cruz Ramirez from Cars 3!

The area where Lightning and Cruz were positioned was themed as the Road to the Florida 500, which highlighted plants and flowers that thrive in warm weather climates and is home for an outdoor playground. Epcot is always educating, and it was fun to read about how plants like the Spanish Bayonet, Silver Buttonwood and Sea Oats survive in hot weather.

Sadly, the Flower and Garden Festival ends today, Monday, May 29, but will return next year!

Wednesday, May 24, 2017

Pixar News Articles for May, 2017

It's been a long time since I've written a "Pixar News Article" post, but with the Cars 3 marketing machine fully ramped up, there have been a number of excellent behind-the-scenes articles and interviews.

Jay Ward, the Cars creative director and franchise guardian, shared this article regarding how Pixar brings Cars to life, with a focus on authenticity. And this Sahm Reviews article discusses story aspects and some of the challenges that Cars 3 presented with Bob Peterson, Scott Morse, Kiel Murray and Mike Rich.

The Pixar Post released a new podcast episode with the first in their series of interviews they had during the Cars 3 blogger press day a few weeks ago. This interview was with Production Designer Jay Shuster, Character Supervisor Michael Comet and Directing Animator Jude Brownbill, and covered the design, rigging and animation of the multitude of characters in the film.

There was some non-Cars 3 news too. In this Digital Arts article, Pixar's Matthew Luhn talks about the impact storytelling can have on people. Luhn also shares his opinions on how virtual reality is changing and how storytelling can work within that medium.

The next few months should be exciting, with more articles and interviews on Cars 3, and then we should immediately start seeing a lot more Coco news!

Sunday, May 21, 2017

This Day in Pixar History: Pixar's 1999 Annual Report

I've written a number of posts on the earning reports Pixar released when they were a public company. I began with their first report as a public company, the 1996 annual report, and now am reviewing the 1999 annual report. But I thought it would be fun to look at their earnings as someone considering buying Pixar stock.

To be clear, nothing in this post should be construed as stock advice or a recommendation to buy or sell any stock. One of the first rules of investing is to do your own due diligence. The point of this post is to highlight some of the numbers and factors one might look at when analyzing a company, using Pixar's 1999 annual report as a concrete example.

A Thinking Machines CM-5 Supercomputer
In addition to doing due diligence, an important investing rule (at least for me) is to be interested in the company. I know from my own experience, when I'm interested in the company I'll spend the time to research it, keep up with their press releases, read their quarterly and annual reports, etc. Fortunately, I was very interested in the company. I was an early investor in Pixar, with my first stock purchase in 1997. I wish I had kept a diary so I could better remember my thought process in why I bought the stock. Obviously I loved Toy Story and saw the potential in computer generated animation. Even prior to the release of Toy Story I was aware of the company. In the early 1990s I was working at the Minnesota Supercomputer Center, doing system administration and system programming for their Thinking Machine supercomputers. A number of folks on our team were involved with computer graphics and were aware of the work Pixar was doing in the field. Plus, during a conversation with Pixar's Bill Reeves, I learned Pixar had used one of our Cray supercomputers to render one of their early short films.

While at the Supercomputer Center, I also had the opportunity to hear Pete Docter speak at a conference I was attending. I believe it was his talk that introduced me to Pixar.

Getting back to Pixar's 1999 annual report, what can we learn? A couple of questions investors usually ask about a company is, is the revenue or sales of the company growing, and is that sales growth sustainable? Sales growth is what propels a company's stock price higher. From those sales we hope it covers all the expenses of the company and ends up on the "bottom line", which is more commonly referred to as net income. Sales, expenses and net income can be found on the income statement. For Pixar, their revenue is pretty straight forward, primarily coming from making their films - theater ticket sales, home videos and merchandise. If you've read my article on the film production agreements Pixar had with Disney, you may recall that Pixar and Disney split all profits 50/50 as well as the expenses to develop the films. In 1999, Pixar's revenue was $121 million. Even though Toy Story 2 had just been released in November of 1999, Pixar made no money from it during 1999 - that money would be earned in 2000 and later. In 1999, over $110M of their revenue came from A Bug's Life, which was released in November of 1998. This amount included theatrical, home video and merchandise sales. They also made $4.1M from Toy Story merchandise, television royalties and home video sales. The rest of their sales came from $5.7M of RenderMan sales and less than $1M of animation services.

From the $121M in revenue, Pixar deducted $46.5M in film development costs and other expenses such as research and development, sales and marketing, and general administrative costs. In addition, they paid almost $33M in income taxes and made about $7.5M in interest on their cash and investments. In the end, this gave Pixar a little over $49M in net income.

How did these results compare to previous years? Well, since Pixar hadn't released a film since Toy Story in 1995, they compared extremely well! For 1998, Pixar only had $14.3M in revenue and almost $8M in net income, while in 1997 the did a little better with $34.7M in revenue and $22.2M in net income.

Not only did revenue and profits jump dramatically in 1999, but their balance sheet was strong. The balance sheet shows how much assets (cash, bonds, property, equipment, etc) and liabilities (salaries to be paid, debt, upcoming income taxes, money owed to Disney, etc) the company has. At the end of 1999, Pixar had about $195M in cash and investments, plus other assets of $180M for total assets of almost $375M, while they had no debt and only owed $30.5M, giving them a net worth of over $344M. And the balance sheet was getting stronger - from the $121M in total revenue for the year, over $109M of that ended up as cash the company could use for buying more computers, developing films and putting in the bank. I think it's clear that A Bug's Life was very profitable for the studio!

So going back to the questions I asked earlier, in regards to sales growth, I think it's clear that Pixar had this covered! As for the second question, whether the growth was sustainable, I think this is where it helps to really understand the company. What I mean is that while 1999 was a banner year compared to 1998, revenue and income in 1998 dropped from 1997, when Pixar was receiving more income from the international and home video releases of Toy Story. Up to this point one could say Pixar's profits were lumpy and not consistent, rising when a new film was released and falling just as dramatically the year after. This "lumpiness" might scare off investors who didn't look deeper at the company and the film production agreement Pixar had with Disney.

But I think there were strong signs as to why Pixar could continue growing their revenue and net income.

First was the new Co-Production Agreement with Disney. As I mentioned earlier, Pixar received half of all the profits from A Bug's Life and any of their other future films. The impact the new agreement would have was already clear. I wrote a post about how much money Pixar made from Toy Story. That film was produced under Pixar's original agreement with Disney, where they received a much smaller percentage (closer to 10% - 15%) of the film's profits. While I don't have the exact numbers, in the 3 year period after Toy Story was released, I estimate Pixar received about $56M. Compare that to just one year of revenue from A Bug's Life where they made $110M, or almost double all their revenue from Toy Story!

Second, Pixar had a set a goal of delivering a new film every year. They weren't there yet - Toy Story came out at the end of 1995, and it was 3 years before A Bug's Life was released. But Toy Story 2 came out 1 year later, and Monsters, Inc. would be released 2 years later (with Finding Nemo about 18 months after that). One could see that Pixar received significant revenue from Toy Story for over 3 years. So even if their next films weren't as successful as Toy Story, I think it was clear their earnings "lumpiness" would smooth out as they approached delivering a film every year.

I also think it was clear their growing film library would continue delivering results long after the films had left the theater. I wish I could say I had the foresight to see all the ways Pixar could have a positive impact on the Disney corporation. I'm not sure I envisioned theme park lands being devoted to one of their films, or that sections of resorts would be named after other films, or that Disney theme parks would dedicate entire weekends exploring the development of their films or celebrating the studio's 30th anniversary. But I do think it was obvious Disney was making good use of their partner. Pixar characters were showing up in parades at the Disney theme parks, and Buzz Lightyear had his own attraction at Disney World's Magic Kingdom (which opened in late 1998), all of which would help keep the films and its iconic characters in people's minds, helping drive additional merchandise sales beyond the ebb and flow of their film releases.

All of these factors pointed to the strong possibility of continued growth for the company.  Were these factors reflected in Pixar's stock price? Well, the price stayed between $15 and $25 from 1999 through 2001 (note, all prices are adjusted for the 2-for-1 stock split the company declared in early 2005). Even into the beginning of 2002 one could buy their stock for around $15. But then in 2002 it began a steady climb for the next few years, going over $50 before the company announced its merger with Disney at a price of almost $60 in early 2006. For that period, from early 2002 to early 2006, Pixar's stock price returned over 30%/year, compared to the average annual return of 8% - 10% for the overall market! We will never know, but I think Pixar would have continued to be an exciting company for shareholders if they hadn't merged with Disney.