Tuesday, June 18, 2013

This Day in Pixar History: Toy Story 3, Art of Animation Resort, and Brave!

June has historically been a busy month for Pixar, and today, June 18, exemplifies this! Here are 3 major events that have occurred on this day.

First we have the theatrical release of Toy Story 3, which I also wrote about last year. Toy Story 3 is the most successful (in terms of box office revenue) animated film of all time! It made an astounding $110 million in its opening weekend and ended up with over $1 billion worldwide. Toy Story 3 had it all - great heart, a great story and a lot of humor! I start chuckling out loud when I think of the tortilla scene, or any scene with Ken and Barbie! And who could forget Day & Night, the totally unique short film directed by Teddy Newton? It sounds like Newton is working on a new project for Pixar, and I would love to see what he could dream up for a feature length film.

via InsideTheMagic.net
Next up, a year ago the Cars-inspired section of the Art of Animation Resort at Walt Disney World opened. The Art of Animation Resort opened in 4 phases, the first being the Finding Nemo section in May, 2012. The Cars section was themed like Radiator Springs with the rooms themed like the Cozy Cone Motel. The entire section is full of great details and plenty of life-sized characters from the film including Lightning McQueen, Sally, Doc Hudson and Mater. If you're looking for more information, Inside The Magic did a complete write-up of the new section with videos and pictures of the resort.

Finally, also one year ago on this day, Brave held its world premier at the newly re-opened Dolby Theatre (it had been the Kodak Theater, home of the Academy Awards) in Hollywood! As with all major premiers, Brave had the red carpet out, with appearances by the film's crew such as Mark Andrews, Brenda Chapman, John Lasseter and Katherine Sarafian, plus actors like Kelly Macdonald, Kevin McKidd, Craig Ferguson and Pixar's lucky charm, John Ratzenberger. Another significant moment from the premier was that Brave was the first film completely mixed and released with the new Dolby Atmos audio platform. Dolby Atmos can provide a much more immersive experience as there are 128 separate sound channels. The system can even direct specific sounds and audio to individual speakers in the theater. Very few theaters support Dolby Atmos but hopefully we'll see it get rolled out to more theaters over time. If you're looking for more information and pictures from the premier, the Pixar Times wrote an article covering it!

Sunday, June 16, 2013

Monsters University Related Merchandise

Monsters University merchandise at Barnes & Noble
YES!! It's almost here! I of course mean the release of Monsters University! It's been 3 years since we first heard about Pixar going back to explore the monster world, and I'm very excited to see this film! As with all Pixar films, there is some great merchandise available. Other sites have done a wonderful job showing off a lot of it, including The Pixar Post with articles on the "Build-A-Scarer" plushes and the Series One Vinylmation that is now available. I wanted to highlight some of the books and other merchandise that has caught my eye.

To start with, if you haven't visited the official Monsters University store, you need to! Disney and Pixar have done an awesome job marketing this film, and the Monsters University website is a great example. The site looks just like a regular university site with campus maps, lists of courses, current events and a store that you can buy real merchandise. It's been difficult for me to control my impulse to buy everything; I have limited myself to only a 2 armed MU hoodie (I wanted the 4 arm version but my wife said she wouldn't let me wear it in public with her. What's up with that?!?!)

As for books, as usual there are a wide variety with my favorite being The Art of Monsters University. I just ordered mine, as I knew I'd want to look through it and was afraid of spoilers. The Art of books have great concept art and usually contain little stories and anecdotes about the development of the movie. Karen Paik is a great choice for author; she has previously written To Infinity and Beyond!, a great book on the founding of Pixar, plus worked on The Art of Ratatouille and The Art of Cars 2. In anticipation of the new book, I have been looking through my copy of The Art of Monsters, Inc.; I especially love the drawings of the Monstropolis neighborhoods done by Harley Jessup, the monster drawings by Geefwee Boedoe and Ricky Nierva, and paintings by Dominique Louis.

I also bought the Monsters University Fearbook. This is a "yearbook" style book, and I think it will be a lot of fun! From the book's description:
Go beyond the screen with the Monsters University Fearbook. Learn all about the fraternities and clubs on campus; find out who is most likely to become a Scarer and who is the class clown; get recaps of the year's highlights; see the monsters' class photos; and more. This 80-page full-color yearbook, which also includes ads, memory pages, and signature pages, is perfect for anyone who wishes THEY could attend MU.
Monsters University Fearbook is authored by Calliope Glass and illustrated by Disney artist Lorelay Bove.

I'm a huge fan of movie soundtracks, especially for Pixar films! I am looking forward to the Monsters University soundtrack. The Monsters, Inc. soundtrack is one of my favorites, from the fun music over the opening credits, to the scare floor theme, the emotion of Boo's theme and the song "If I Didn't Have You", so I can't wait to hear how these themes may be worked into the new soundtrack, and hear all the new music. I love the track "Roar" that was already released and could be heard on the "It All Began Here" trailer. The Monsters University soundtrack will be available on June 18, 2013.

One note, many of the books give away the entire story from the film, so if you don't want to be spoiled then I recommend waiting until after seeing the film before cracking them open. And even with the soundtrack, individual track titles may allude to plot points, so again, be careful!

Tuesday, June 11, 2013

This Day in Pixar History: Pixar Earnings Report, 1st Quarter 1997

I'm back with another post reviewing Pixar's quarterly earnings reports from when they were a public company. I started about a year ago with the first quarter of 1996, their first quarterly report as a public company. In this post I'm covering the first quarter of 1997, another positive if uneventful quarter except for the big, new film agreement with Disney that was announced after the end of the quarter (discussed at the end of this post).

Total revenue for the quarter was almost $7.9 million. As Pixar warned in their annual report earlier in the year, revenues decreased from $8.3 million in the first quarter of 1996 due to a number of reasons. In the first quarter of 1996 Pixar received a large ($6.5 million) patent royalty payment from Silicon Graphics. In addition, Pixar had significantly reduced their commercial animation services business during 1996 to focus on developing feature films, which had a negative impact on the 1997 earnings. On the positive side, Pixar did receive $6.3 million from home video sales of Toy Story, compared to only $76,000 in film revenue in the year ago period. They also increased software sales (mostly from RenderMan licenses) from $911,000 to $1.4 million. But the increases in film and software revenue were not enough to make up for the losses in the other segments.

Cost of revenue as a percentage of revenue continued to be very low. For software sales, cost of revenue was 1% in 1997 compared to 6% in 1996 due to the higher margins received for RenderMan. Cost of film revenue also decreased (as a percentage of revenue) from 12% in 1996 to 9% in 1997. There were no costs for the patent licensing revenue. Therefore, gross margins for the 1997 quarter were $7.3 million, and on a percentage of revenue basis, were 92.7% vs. 90.5% in 1996.

Operating expenses stayed fairly constant, increasing 2% to $2.6 million. Expenses were held in check partially due to the new Co-Production agreement with Disney, who was now paying half of all expenses associated with film production.

Net Income for the first quarter of 1997 was $5.1 million versus $6.3 million in 1996, primarily due to the decrease in revenues from Toy Story. Diluted earnings per share were $0.11 versus $0.13.

In usual Pixar style, management gave a plethora of reasons why future revenues and earnings would be decreasing and why losses should be expected, especially in the 1998 fiscal year. They pointed out that since 1990, about 40 animated films had been released and only 2 of those films had generated more revenue than Toy Story, and both of those films were produced solely by Disney. And in the 5 year period prior to early 1997, no animated feature film produced by any studio other than Disney had generated domestic revenue of more than $25 million, other than Toy Story. The point Pixar was trying to make was that even if their next film, A Bug's Life, was a critical and box-office success, generating results similar to Toy Story would be very unlikely. But as we know, A Bug's Life was a hit, generating almost $163 million in domestic revenue and over $363 million worldwide. As an investor I appreciated Pixar's conservative outlooks - it helped keep the stock price stable and avoided large price drops. It also helped keep analyst estimates in check, and as became a regular occurrence, Pixar would exceed these estimates which would help drive the price up.

The biggest news of the quarter was the announcement on February 24 by Pixar and Disney of a new film agreement between the 2 companies. The new agreement, which was expected to run 10 years, expanded the original 3 film agreement to 5 films. With the new agreement, both Pixar and Disney would have equal billing on the films, home videos and other merchandise.  It also greatly increased the risk and reward for Pixar, as they would now evenly split all costs and revenue with Disney from the films and merchandise (in the original agreement, Disney paid for almost all film development costs and Pixar only received a small percentage of the profits). A Bug's Life was to be the first film developed under the new agreement, and it would run through 2006 and the release of Cars.

In addition, as part of the new agreement Disney bought 1,000,000 shares of Pixar stock at $15/share and committed to hold the stock for at least 3 years. This was a strong signal to the market of the confidence Disney had in Pixar, and Pixar's stock price reacted positively, jumping almost $7 to $21. The higher stock price did not last long though, as investors realized the new agreement wouldn't do anything to increase revenue or profits, at least until A Bug's Life was released about 20 months later. But for patient investors, the future was set and looked extremely promising. We'll find out how the 1997 fiscal year proceeded when I look at second quarter earnings in a couple of months.

Friday, June 7, 2013

Early Pixar Technology Breakthroughs

If you listened to the Pixar Post's most recent podcast, you heard me talking to T.J. and Julie about Pixar's formation and their first year as a standalone company. I love Pixar's early history. I mean, before they made Toy Story, Pixar was a computer manufacturer. And before that, they were part of Lucasfilm revolutionizing digital film-making (actually, creating it). And before that, folks like Ed Catmull, Alvy Ray Smith and David DiFrancesco were at the forefront of computer graphics and animation at the New York Institute of Technology (NYIT). When you look back at that time frame (from the mid 70s to mid 80s), before they could act on their dream of creating a feature-length computer animated film, they had to create the tools. Many of the techniques and algorithms found in today's animation tools (motion blur, texture mapping, rendering) were discovered and created by these pioneers.

I thought it would be fun to highlight some of these people and the techniques they pioneered, plus provide links to further information for those of you interested in learning more.

Ed Catmull

Most people know that Ed Catmull is one of the founders of Pixar (along with Alvy Ray Smith). But more than a decade before spinning Pixar out of Lucasfilm, Catmull was studying computer graphics at the University of Utah. As a graduate student in 1972, one of Catmull's projects (along with classmate Fred Parke) was to animate his left hand. He made a plaster cast of his hand, drew a few hundred polygons on the cast, then measured, digitized and entered the coordinates of each polygon into his computer. He then developed a 3D animation program to animate his reproduced hand. Finally, he used a 35mm movie camera to capture the animation from the screen and record it to film. About a minute long, this is one of the first ever computer rendered movies and an amazing piece of work. Not only does the hand rotate and curl up, the camera goes inside the hand. Portions of the film (along with a film that Parke made of animating his wife's face) ended up in the 1976 film Futureworld. To see the video, along with some "making of" and background footage, check out Robby Ingebretsen's blog. Ingebretsen's dad helped out with the making of the video. I strongly recommend reading his post regarding this video - not only does he provide interesting details on it, he tells a nice story of how he was invited to Pixar and met Catmull. And make sure to read through the comments, which include entries from Fred Parke and children of other graphic experts of the time like Dave Evans and Ivan Sutherland (creators of the first frame buffer).

As part of Catmull's PhD thesis, he developed a solution for tracking distances between objects in a 3D space and determining which portions of an object are hidden from the viewer. His solution is called the Z-buffer, which stores the distance between the viewer and objects at every point in a scene. At the same time, Catmull discovered a way to project an image onto the surface of an object. This allowed objects in a computer to take on the look of concrete, wood or any object and is known as texture mapping.

The Pixar Touch by David A. Price provides a thorough history of not only Catmull's work at the University of Utah but of the key people and developments of Pixar's history, from the earliest days at the New York Institute of Technology and Lucasfilm, through the forming of Pixar as a standalone corporation and its sale to the Walt Disney Company in 2006.

Alvy Ray Smith

Smith was a pioneer in the area of digital paint systems. His first experience with these systems was at Xerox PARC using Dick Shoup's SuperPaint application. Smith developed his own paint application at NYIT, and followed it up with Paint3, which utilized 3 frame buffers simultaneously to provide a palette of over 16 million colors (each frame buffer supported 256 shades of a single color like red, green or blue. 3 frame buffers therefore could support 256^3 different colors).

In 1978, Smith also made the discovery of the alpha channel, or opacity, which allowed images to be superimposed on top of each other.

These advancements won Smith a Scientific and Engineering Academy Award, along with Dick Shoup and Pixarian Tom Porter, for their "pioneering work in the development of digital paint systems used in motion picture production."

Smith did a fabulous interview (with a detailed companion piece) with Mike Seymour on the fxguide podcast. Seymour and Smith discuss paint systems, the alpha channel and Smith's work at Lucasfilm and Pixar's early days, and is definitely worth a listen. In addition, Smith's website is full of great information on the history of digital paint systems.

Rob Cook

Early on, Catmull realized that for computer generated animation to look believable, it would need to include motion blur. Motion blur is an artifact of using a film camera to record an image with moving object(s). While it is normal to try to reduce or eliminate motion blur when taking a photograph (to stop the motion of a wave crashing on rocks one would use a very fast shutter speed), motion blur is necessary to provide a realistic movie experience. Without it, a film would look similar to stop-motion and have a stutter feeling.

Tom Porter's 1984 pool ball image
droidMaker by Michael Rubin gives a good, in-depth discussion of how Rob Cook solved the motion blur problem while at Lucasfilm. The solution was used in Tom Porter's "1984" pool ball image and in The Adventures of André and Wally B. The book includes interesting bits of the struggles Cook had in finding the solution, and includes the story of the friendly competition between Cook and Catmull to see who could find the solution first.

I am greatly enjoying droidMaker. It is not solely about Pixar like The Pixar Touch, as it is follows George Lucas' career and his impact on the digital film revolution. But Pixar has a significant history with Lucas as Pixar was spun out of Lucasfilm, and the book does an excellent job covering the period of time up to where Pixar was spun out. It also covers a wide range of technical topics such as the beginnings of digital audio, computer graphic workstations and Sun Microsystems (much of my professional career has been done on Sun workstations), which I really enjoyed.

Loren Carpenter

In 1980, Loren Carpenter, then an engineer at Boeing, wanted to get into Lucasfilm. The problem was that everybody wanted to get into Lucasfilm at that time. He knew just sending a resume wouldn't be sufficient, he needed to impress Ed Catmull and Alvy Ray Smith. Carpenter had been applying fractal mathematics in his job and realized he could use fractals to create a whole range of objects from mountains to lightning bolts. He decided he would create a short film for the upcoming SIGGRAPH conference demonstrating his new algorithms. It took him over 4 months to create the 2 minute film, and when it was shown at SIGGRAPH it completely blew away the audience. Catmull and Smith, sitting in the front row, immediately offered Carpenter a job. Carpenter's algorithms were used extensively in creating the Genesis effect for Star Trek II: The Wrath of Khan.

Carpenter has posted his SIGGRAPH video on vimeo, and even today it is a stunning piece of work. It's hard to imagine what he must have gone through to complete that video on the equipment of the day, all in his spare time!

Loren Carpenter and Rob Cook

Carpenter and Cook also were key contributors to Reyes (which stands for Render Everything You Ever Saw), the rendering system at Lucasfilm that later became the basis of RenderMan. Carpenter and Cook won an Academy Award in 2001 (along with Catmull) for their "significant advances in motion picture rendering".

Cook did a very interesting interview with fxguide's Mike Seymour a few years ago. The interview covers a large span of Cook's involvement with computer graphics and rendering, and includes an in-depth discussion of solving the motion blur problem, in addition to the history and advancements of RenderMan. It also covers Pixar's migration from being technology-focused to art-focused. Seymour and Cook also discuss the implications of John Lasseter's phrase, "Art challenges the technology, and the technology inspires the art."

Bill Reeves

Bill Reeves (center) with myself and
my son Sam at the CAM Benefit in 2011
In late 1981, Ed Catmull, Alvy Ray Smith and others in the computer graphics group of Lucasfilm were busy working on the Genesis effect for Star Trek II. Their original concept included exploding volcanoes and mountains growing from the flat landscape of the planet. But then Bill Reeves showed them his revolutionary new particle system. A particle system can be used to model objects that do not have well-defined borders, such as clouds, smoke and water. Reeves' new system gave a much more natural and realistic look to these objects, and Catmull and Smith agreed it should be incorporated into the effect. The exploding volcanoes were replaced with fire that spread across the planet, and the final effect was stunning with a high amount of realism. It was the first use of this technique in computer graphics, and won Reeves a Scientific and Engineering Academy Award® in 1997.