Steve_Jobs_The_Exclusive_Biography

TOY STORY

Buzz and Woody to the Rescue

Jeffrey Katzenberg

“It’s kind of fun to do the impossible,” Walt Disney once said. That was the type of attitude that appealed to Jobs. He admired Disney’s obsession with detail and design, and he felt that there was a natural fit between Pixar and the movie studio that Disney had founded.

The Walt Disney Company had licensed Pixar’s Computer Animation Production System, and that made it the largest customer for Pixar’s computers. One day Jeffrey Katzenberg, the head of Disney’s film division, invited Jobs down to the Burbank studios to see the technology in operation. As the Disney folks were showing him around, Jobs turned to Katzenberg and asked, “Is Disney happy with Pixar?” With great exuberance, Katzenberg answered yes. Then Jobs asked, “Do you think we at Pixar are happy with Disney?” Katzenberg said he assumed so. “No, we’re not,” Jobs said. “We want to do a film with you. That would make us happy.”

Katzenberg was willing. He admired John Lasseter’s animated shorts and had tried unsuccessfully to lure him back to Disney. So Katzenberg invited the Pixar team down to discuss partnering on a film. When Catmull, Jobs, and Lasseter got settled at the conference table, Katzenberg was forthright. “John, since you won’t come work for me,” he said, looking at Lasseter, “I’m going to make it work this way.”

Just as the Disney company shared some traits with Pixar, so Katzenberg shared some with Jobs. Both were charming when they wanted to be, and

aggressive (or worse) when it suited their moods or interests. Alvy Ray Smith, on the verge of quitting Pixar, was at the meeting. “Katzenberg and Jobs impressed me as a lot alike,” he recalled. “Tyrants with an amazing gift of gab.” Katzenberg was delightfully aware of this. “Everybody thinks I’m a tyrant,” he told the Pixar team. “I am a tyrant. But I’m usually right.” One can imagine Jobs saying the same.

As befitted two men of equal passion, the negotiations between Katzenberg and Jobs took months. Katzenberg insisted that Disney be given the rights to Pixar’s proprietary technology for making 3-D animation. Jobs refused, and he ended up winning that engagement. Jobs had his own demand: Pixar would have part ownership of the film and its characters, sharing control of both video rights and sequels. “If that’s what you want,” Katzenberg said, “we can just quit talking and you can leave now.” Jobs stayed, conceding that point.

Lasseter was riveted as he watched the two wiry and tightly wound principals parry and thrust. “Just to see Steve and Jeffrey go at it, I was in awe,” he recalled. “It was like a fencing match. They were both masters.” But Katzenberg went into the match with a saber, Jobs with a mere foil. Pixar was on the verge of bankruptcy and needed a deal with Disney far more than Disney needed a deal with Pixar. Plus, Disney could afford to finance the whole enterprise, and Pixar couldn’t. The result was a deal, struck in May 1991, by which Disney would own the picture and its characters outright, have creative control, and pay Pixar about 12.5% of the ticket revenues. It had the option (but not the obligation) to do Pixar’s next two films and the right to make (with or without Pixar) sequels using the characters in the film. Disney could also kill the film at any time with only a small penalty.

The idea that John Lasseter pitched was called “Toy Story.” It sprang from a belief, which he and Jobs shared, that products have an essence to them, a purpose for which they were made. If the object were to have feelings, these would be based on its desire to fulfill its essence. The purpose of a glass, for example, is to hold water; if it had feelings, it would be happy when full and sad when empty. The essence of a computer screen is to interface with a human. The essence of a unicycle is to be ridden in a circus. As for toys, their purpose is to be played with by kids, and thus their existential fear is of being discarded or upstaged by newer toys. So a buddy movie pairing an old favorite toy with a shiny new one would have an essential drama to it, especially when the action revolved around the toys’ being separated from their kid. The original treatment began, “Everyone has had the traumatic childhood experience of losing a toy. Our story takes the toy’s point of view as he loses and tries to regain the single thing most important to him: to be played with by children. This is the reason for the existence of all toys. It is the emotional foundation of their existence.”

The two main characters went through many iterations before they ended up as Buzz Lightyear and Woody. Every couple of weeks, Lasseter and his team would put together their latest set of storyboards or footage to show the folks at Disney. In early screen tests, Pixar showed off its amazing technology by, for example, producing a scene of Woody rustling around on top of a dresser while the light rippling in through a Venetian blind cast shadows on his plaid shirt—an effect that would have been almost impossible to render by hand. Impressing Disney with the plot, however, was more difficult. At each presentation by Pixar, Katzenberg would tear much of it up, barking out his detailed comments and notes. And a cadre of

clipboard-carrying flunkies was on hand to make sure every suggestion and whim uttered by Katzenberg received follow-up treatment.

Katzenberg’s big push was to add more edginess to the two main characters. It may be an animated movie called Toy Story, he said, but it should not be aimed only at children. “At first there was no drama, no real story, and no conflict,” Katzenberg recalled. He suggested that Lasseter watch some classic buddy movies, such as The Defiant Ones and 48 Hours, in which two characters with different attitudes are thrown together and have to bond. In addition, he kept pushing for what he called “edge,” and that meant making Woody’s character more jealous, mean, and belligerent toward Buzz, the new interloper in the toy box. “It’s a toy-eat-toy world,” Woody says at one point, after pushing Buzz out of a window.

After many rounds of notes from Katzenberg and other Disney execs, Woody had been stripped of almost all charm. In one scene he throws the other toys off the bed and orders Slinky to come help. When Slinky hesitates, Woody barks, “Who said your job was to think, spring-wiener?” Slinky then asks a question that the Pixar team members would soon be asking themselves: “Why is the cowboy so scary?” As Tom Hanks, who had signed up to be Woody’s voice, exclaimed at one point, “This guy’s a real jerk!”

Cut!

Lasseter and his Pixar team had the first half of the movie ready to screen by November 1993, so they brought it down to Burbank to show to Katzenberg and other Disney executives. Peter Schneider, the head of feature animation, had never been enamored of Katzenberg’s idea of having outsiders make animation for Disney, and he declared it a mess and ordered that production be stopped. Katzenberg agreed. “Why is this

so terrible?” he asked a colleague, Tom Schumacher. “Because it’s not their movie anymore,” Schumacher bluntly replied. He later explained, “They were following Katzenberg’s notes, and the project had been driven completely off-track.”

Lasseter realized that Schumacher was right. “I sat there and I was pretty much embarrassed with what was on the screen,” he recalled. “It was a story filled with the most unhappy, mean characters that I’ve ever seen.” He asked Disney for the chance to retreat back to Pixar and rework the script. Katzenberg was supportive.

Jobs did not insert himself much into the creative process. Given his proclivity to be in control, especially on matters of taste and design, this self-restraint was a testament to his respect for Lasseter and the other artists at Pixar—as well as for the ability of Lasseter and Catmull to keep him at bay. He did, however, help manage the relationship with Disney, and the Pixar team appreciated that. When Katzenberg and Schneider halted production on Toy Story, Jobs kept the work going with his own personal funding. And he took their side against Katzenberg. “He had Toy Story all messed up,” Jobs later said. “He wanted Woody to be a bad guy, and when he shut us down we kind of kicked him out and said, ‘This isn’t what we want,’ and did it the way we always wanted.”

The Pixar team came back with a new script three months later. The character of Woody morphed from being a tyrannical boss of Andy’s other toys to being their wise leader. His jealousy after the arrival of Buzz Lightyear was portrayed more sympathetically, and it was set to the strains of a Randy Newman song, “Strange Things.” The scene in which Woody pushed Buzz out of the window was rewritten to make Buzz’s fall the result of an accident triggered by a little trick

Woody initiated involving a Luxo lamp. Katzenberg & Co. approved the new approach, and by February 1994 the film was back in production.

Katzenberg had been impressed with Jobs’s focus on keeping costs under control. “Even in the early budgeting process, Steve was very eager to do it as efficiently as possible,” he said. But the $17 million production budget was proving inadequate, especially given the major revision that was necessary after Katzenberg had pushed them to make Woody too edgy. So Jobs demanded more in order to complete the film right. “Listen, we made a deal,” Katzenberg told him. “We gave you business control, and you agreed to do it for the amount we offered.” Jobs was furious. He would call Katzenberg by phone or fly down to visit him and be, in Katzenberg’s words, “as wildly relentless as only Steve can be.” Jobs insisted that Disney was liable for the cost overruns because Katzenberg had so badly mangled the original concept that it required extra work to restore things. “Wait a minute!” Katzenberg shot back. “We were helping you. You got the benefit of our creative help, and now you want us to pay you for that.” It was a case of two control freaks arguing about who was doing the other a favor.

Ed Catmull, more diplomatic than Jobs, was able to reach a compromise new budget. “I had a much more positive view of Jeffrey than some of the folks working on the film did,” he said. But the incident did prompt Jobs to start plotting about how to have more leverage with Disney in the future. He did not like being a mere contractor; he liked being in control. That meant Pixar would have to bring its own funding to projects in the future, and it would need a new deal with Disney.

As the film progressed, Jobs became ever more excited about it. He had been talking to various companies, ranging from Hallmark to Microsoft, about

selling Pixar, but watching Woody and Buzz come to life made him realize that he might be on the verge of transforming the movie industry. As scenes from the movie were finished, he watched them repeatedly and had friends come by his home to share his new passion. “I can’t tell you the number of versions of Toy Story I saw before it came out,” said Larry Ellison. “It eventually became a form of torture. I’d go over there and see the latest 10% improvement. Steve is obsessed with getting it right—both the story and the technology—and isn’t satisfied with anything less than perfection.”

Jobs’s sense that his investments in Pixar might actually pay off was reinforced when Disney invited him to attend a gala press preview of scenes from Pocahontas in January 1995 in a tent in Manhattan’s Central Park. At the event, Disney CEO Michael Eisner announced that Pocahontas would have its premiere in front of 100,000 people on eighty-foot-high screens on the Great Lawn of Central Park. Jobs was a master showman who knew how to stage great premieres, but even he was astounded by this plan. Buzz Lightyear’s great exhortation—“To infinity and beyond!”—suddenly seemed worth heeding.

Jobs decided that the release of Toy Story that November would be the occasion to take Pixar public. Even the usually eager investment bankers were dubious and said it couldn’t happen. Pixar had spent five years hemorrhaging money. But Jobs was determined. “I was nervous and argued that we should wait until after our second movie,” Lasseter recalled. “Steve overruled me and said we needed the cash so we could put up half the money for our films and renegotiate the Disney deal.”

To Infinity!

There were two premieres of Toy Story in

November 1995. Disney organized one at El Capitan, a grand old theater in Los Angeles, and built a fun house next door featuring the characters. Pixar was given a handful of passes, but the evening and its celebrity guest list was very much a Disney production; Jobs did not even attend. Instead, the next night he rented the Regency, a similar theater in San Francisco, and held his own premiere. Instead of Tom Hanks and Steve Martin, the guests were Silicon Valley celebrities, such as Larry Ellison and Andy Grove. This was clearly Jobs’s show; he, not Lasseter, took the stage to introduce the movie.

The dueling premieres highlighted a festering issue: Was Toy Story a Disney or a Pixar movie? Was Pixar merely an animation contractor helping Disney make movies? Or was Disney merely a distributor and marketer helping Pixar roll out its movies? The answer was somewhere in between. The question would be whether the egos involved, mainly those of Michael Eisner and Steve Jobs, could get to such a partnership.

The stakes were raised when Toy Story opened to blockbuster commercial and critical success. It recouped its cost the first weekend, with a domestic opening of $30 million, and it went on to become the top-grossing film of the year, beating Batman Forever and Apollo 13, with $192 million in receipts domestically and a total of $362 million worldwide. According to the review aggregator Rotten Tomatoes, 100% of the seventy-three critics surveyed gave it a positive review. Time’s Richard Corliss called it “the year’s most inventive comedy,” David Ansen of Newsweek pronounced it a “marvel,” and Janet Maslin of the New York Times recommended it both for children and adults as “a work of incredible cleverness in the best two-tiered Disney tradition.”

The only rub for Jobs was that reviewers such as

Maslin wrote of the “Disney tradition,” not the emergence of Pixar. After reading her review, he decided he had to go on the offensive to raise Pixar’s profile. When he and Lasseter went on the Charlie Rose show, Jobs emphasized that Toy Story was a Pixar movie, and he even tried to highlight the historic nature of a new studio being born. “Since Snow White was released, every major studio has tried to break into the animation business, and until now Disney was the only studio that had ever made a feature animated film that was a blockbuster,” he told Rose. “Pixar has now become the second studio to do that.”

Jobs made a point of casting Disney as merely the distributor of a Pixar film. “He kept saying, ‘We at Pixar are the real thing and you Disney guys are shit,’” recalled Michael Eisner. “But we were the ones who made Toy Story work. We helped shape the movie, and we pulled together all of our divisions, from our consumer marketers to the Disney Channel, to make it a hit.” Jobs came to the conclusion that the fundamental issue—Whose movie was it?—would have to be settled contractually rather than by a war of words. “After Toy Story’s success,” he said, “I realized that we needed to cut a new deal with Disney if we were ever to build a studio and not just be a work-for-hire place.” But in order to sit down with Disney on an equal basis, Pixar had to bring money to the table. That required a successful IPO.

The public offering occurred exactly one week after Toy Story’s opening. Jobs had gambled that the movie would be successful, and the risky bet paid off, big-time. As with the Apple IPO, a celebration was planned at the San Francisco office of the lead underwriter at 7 a.m., when the shares were to go on sale. The plan had originally been for the first shares to be offered at about $14, to be sure they would sell. Jobs