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CHAPTER THIRTY-THREE PIXAR’S FRIENDS
. . . and Foes



A Bug’s Life

When Apple developed the iMac, Jobs drove with Jony Ive to show it to the folks at Pixar. He felt that the machine had the spunky personality that would appeal to the creators of Buzz Lightyear and Woody, and he loved the fact that Ive and John Lasseter shared the talent to connect art with technology in a playful way.

Pixar was a haven where Jobs could escape the intensity in Cupertino. At Apple, the managers were often excitable and exhausted, Jobs tended to be volatile, and people felt nervous about where they stood with him. At Pixar, the storytellers and illustrators seemed more serene and behaved more gently, both with each other and even with Jobs. In other words, the tone at each place was set at the top, by Jobs at Apple, but by Lasseter at Pixar.

Jobs reveled in the earnest playfulness of moviemaking and got passionate about the algorithms that enabled such magic as allowing computer-generated raindrops to refract sunbeams or blades of grass to wave in the wind. But he was able to restrain himself from trying to control the creative process. It was at Pixar that he learned to let other creative people flourish and take the lead. Largely it was because he loved Lasseter, a gentle artist who, like Ive, brought out the best in Jobs.

Jobs’s main role at Pixar was deal making, in which his natural intensity was an asset. Soon after the release of Toy Story, he clashed with Jeffrey Katzenberg, who had left Disney in the summer of 1994 and joined with Steven Spielberg and David Geffen to start DreamWorks SKG. Jobs believed that his Pixar team had told Katzenberg, while he was still at Disney, about its proposed second movie, A Bug’s Life, and that he had then stolen the idea of an animated insect movie when he decided to produce Antz at DreamWorks. “When Jeffrey was still running Disney animation, we pitched him on A Bug’s Life,” Jobs said. “In sixty years of animation history, nobody had thought of doing an animated movie about insects, until Lasseter. It was one of his brilliant creative sparks. And Jeffrey left and went to DreamWorks and all of a sudden had this idea for an animated movie about—Oh!—insects. And he pretended he’d never heard the pitch. He lied. He lied through his teeth.”

Actually, not. The real story is a bit more interesting. Katzenberg never heard the Bug’s Life pitch while at Disney. But after he left for DreamWorks, he stayed in touch with Lasseter, occasionally pinging him with one of his typical “Hey buddy, how you doing just checking in” quick phone calls. So when Lasseter happened to be at the Technicolor facility on the Universal lot, where DreamWorks was also located, he called Katzenberg and dropped by with a couple of colleagues. When Katzenberg asked what they were doing next, Lasseter told him. “We described to him A Bug’s Life, with an ant as the main character, and told him the whole story of him organizing the other ants and enlisting a group of circus performer insects to fight off the grasshoppers,” Lasseter recalled. “I should have been wary. Jeffrey kept asking questions about when it would be released.”

Lasseter began to get worried when, in early 1996, he heard rumors that DreamWorks might be making its own computer-animated movie about ants. He called Katzenberg and asked him point-blank. Katzenberg hemmed, hawed, and asked where Lasseter had heard that. Lasseter asked again, and Katzenberg admitted it was true. “How could you?” yelled Lasseter, who very rarely raised his voice.

“We had the idea long ago,” said Katzenberg, who explained that it had been pitched to him by a development director at DreamWorks.

“I don’t believe you,” Lasseter replied.

Katzenberg conceded that he had sped up Antz as a way to counter his former colleagues at Disney. DreamWorks’ first major picture was to be Prince of Egypt, which was scheduled to be released for Thanksgiving 1998, and he was appalled when he heard that Disney was planning to release Pixar’s A Bug’s Life that same weekend. So he had rushed Antz into production to force Disney to change the release date of A Bug’s Life.

“Fuck you,” replied Lasseter, who did not normally use such language. He didn’t speak to Katzenberg for another thirteen years.

Jobs was furious, and he was far more practiced than Lasseter at giving vent to his emotions. He called Katzenberg and started yelling. Katzenberg made an offer: He would delay production of Antz if Jobs and Disney would move A Bug’s Life so that it didn’t compete with Prince of Egypt. “It was a blatant extortion attempt, and I didn’t go for it,” Jobs recalled. He told Katzenberg there was nothing he could do to make Disney change the release date.

“Of course you can,” Katzenberg replied. “You can move mountains. You taught me how!” He said that when Pixar was almost bankrupt, he had come to its rescue by giving it the deal to do Toy Story. “I was the one guy there for you back then, and now you’re allowing them to use you to screw me.” He suggested that if Jobs wanted to, he could simply slow down production on A Bug’s Life without telling Disney. If he did, Katzenberg said, he would put Antz on hold. “Don’t even go there,” Jobs replied.

Katzenberg had a valid gripe. It was clear that Eisner and Disney were using the Pixar movie to get back at him for leaving Disney and starting a rival animation studio. “Prince of Egypt was the first thing we were making, and they scheduled something for our announced release date just to be hostile,” he said. “My view was like that of the Lion King, that if you stick your hand in my cage and paw me, watch out.”

No one backed down, and the rival ant movies provoked a press frenzy. Disney tried to keep Jobs quiet, on the theory that playing up the rivalry would serve to help Antz, but he was a man not easily muzzled. “The bad guys rarely win,” he told the Los Angeles Times. In response, DreamWorks’ savvy marketing maven, Terry Press, suggested, “Steve Jobs should take a pill.”

Antz was released at the beginning of October 1998. It was not a bad movie. Woody Allen voiced the part of a neurotic ant living in a conformist society who yearns to express his individualism. “This is the kind of Woody Allen comedy Woody Allen no longer makes,” Time wrote. It grossed a respectable $91 million domestically and $172 million worldwide.

A Bug’s Life came out six weeks later, as planned. It had a more epic plot, which reversed Aesop’s tale of “The Ant and the Grasshopper,” plus a greater technical virtuosity, which allowed such startling details as the view of grass from a bug’s vantage point. Time was much more effusive about it. “Its design work is so stellar—a wide-screen Eden of leaves and labyrinths populated by dozens of ugly, buggy, cuddly cutups—that it makes the DreamWorks film seem, by comparison, like radio,” wrote Richard Corliss. It did twice as well as Antz at the box office, grossing $163 million domestically and $363 million worldwide. (It also beat Prince of Egypt.)

A few years later Katzenberg ran into Jobs and tried to smooth things over. He insisted that he had never heard the pitch for A Bug’s Life while at Disney; if he had, his settlement with Disney would have given him a share of the profits, so it’s not something he would lie about. Jobs laughed, and accepted as much. “I asked you to move your release date, and you wouldn’t, so you can’t be mad at me for protecting my child,” Katzenberg told him. He recalled that Jobs “got really calm and Zen-like” and said he understood. But Jobs later said that he never really forgave Katzenberg:

Our film toasted his at the box office. Did that feel good? No, it still felt awful, because people started saying how everyone in Hollywood was doing insect movies. He took the brilliant originality away from John, and that can never be replaced. That’s unconscionable, so I’ve never trusted him, even after he tried to make amends. He came up to me after he was successful with Shrek and said, “I’m a changed man, I’m finally at peace with myself,” and all this crap. And it was like, give me a break, Jeffrey.



For his part, Katzenberg was much more gracious. He considered Jobs one of the “true geniuses in the world,” and he learned to respect him despite their volatile dealings.

More important than beating Antz was showing that Pixar was not a one-hit wonder. A Bug’s Life grossed as much as Toy Story had, proving that the first success was not a fluke. “There’s a classic thing in business, which is the second-product syndrome,” Jobs later said. It comes from not understanding what made your first product so successful. “I lived through that at Apple. My feeling was, if we got through our second film, we’d make it.”

Steve’s Own Movie

Toy Story 2, which came out in November 1999, was even bigger, with a $485 million gross worldwide. Given that Pixar’s success was now assured, it was time to start building a showcase headquarters. Jobs and the Pixar facilities team found an abandoned Del Monte fruit cannery in Emeryville, an industrial neighborhood between Berkeley and Oakland, just across the Bay Bridge from San Francisco. They tore it down, and Jobs commissioned Peter Bohlin, the architect of the Apple stores, to design a new building for the sixteen-acre plot.

Jobs obsessed over every aspect of the new building, from the overall concept to the tiniest detail regarding materials and construction. “Steve had this firm belief that the right kind of building can do great things for a culture,” said Pixar’s president Ed Catmull. Jobs controlled the creation of the building as if he were a director sweating each scene of a film. “The Pixar building was Steve’s own movie,” Lasseter said.

Lasseter had originally wanted a traditional Hollywood studio, with separate buildings for various projects and bungalows for development teams. But the Disney folks said they didn’t like their new campus because the teams felt isolated, and Jobs agreed. In fact he decided they should go to the other extreme: one huge building around a central atrium designed to encourage random encounters.

Despite being a denizen of the digital world, or maybe because he knew all too well its isolating potential, Jobs was a strong believer in face-to-face meetings. “There’s a temptation in our networked age to think that ideas can be developed by email and iChat,” he said. “That’s crazy. Creativity comes from spontaneous meetings, from random discussions. You run into someone, you ask what they’re doing, you say ‘Wow,’ and soon you’re cooking up all sorts of ideas.”

So he had the Pixar building designed to promote encounters and unplanned collaborations. “If a building doesn’t encourage that, you’ll lose a lot of innovation and the magic that’s sparked by serendipity,” he said. “So we designed the building to make people get out of their offices and mingle in the central atrium with people they might not otherwise see.” The front doors and main stairs and corridors all led to the atrium, the café and the mailboxes were there, the conference rooms had windows that looked out onto it, and the six-hundred-seat theater and two smaller screening rooms all spilled into it. “Steve’s theory worked from day one,” Lasseter recalled. “I kept running into people I hadn’t seen for months. I’ve never seen a building that promoted collaboration and creativity as well as this one.”

Jobs even went so far as to decree that there be only two huge bathrooms in the building, one for each gender, connected to the atrium. “He felt that very, very strongly,” recalled Pam Kerwin, Pixar’s general manager. “Some of us felt that was going too far. One pregnant woman said she shouldn’t be forced to walk for ten minutes just to go to the bathroom, and that led to a big fight.” It was one of the few times that Lasseter disagreed with Jobs. They reached a compromise: there would be two sets of bathrooms on either side of the atrium on both of the two floors.

Because the building’s steel beams were going to be visible, Jobs pored over samples from manufacturers across the country to see which had the best color and texture. He chose a mill in Arkansas, told it to blast the steel to a pure color, and made sure the truckers used caution not to nick any of it. He also insisted that all the beams be bolted together, not welded. “We sandblasted the steel and clear-coated it, so you can actually see what it’s like,” he recalled. “When the steelworkers were putting up the beams, they would bring their families on the weekend to show them.”

The wackiest piece of serendipity was “The Love Lounge.” One of the animators found a small door on the back wall when he moved into his office. It opened to a low corridor that you could crawl through to a room clad in sheet metal that provided access to the air-conditioning valves. He and his colleagues commandeered the secret room, festooned it with Christmas lights and lava lamps, and furnished it with benches upholstered in animal prints, tasseled pillows, a fold-up cocktail table, liquor bottles, bar equipment, and napkins that read “The Love Lounge.” A video camera installed in the corridor allowed occupants to monitor who might be approaching.

Lasseter and Jobs brought important visitors there and had them sign the wall. The signatures include Michael Eisner, Roy Disney, Tim Allen, and Randy Newman. Jobs loved it, but since he wasn’t a drinker he sometimes referred to it as the Meditation Room. It reminded him, he said, of the one that he and Daniel Kottke had at Reed, but without the acid.

The Divorce

In testimony before a Senate committee in February 2002, Michael Eisner blasted the ads that Jobs had created for Apple’s iTunes. “There are computer companies that have full-page ads and billboards that say: Rip, mix, burn,” he declared. “In other words, they can create a theft and distribute it to all their friends if they buy this particular computer.”

This was not a smart comment. It misunderstood the meaning of “rip” and assumed it involved ripping someone off, rather than importing files from a CD to a computer. More significantly, it truly pissed off Jobs, as Eisner should have known. That too was not smart. Pixar had recently released the fourth movie in its Disney deal, Monsters, Inc., which turned out to be the most successful of them all, with $525 million in worldwide gross. Disney’s Pixar deal was again coming up for renewal, and Eisner had not made it easier by publicly poking a stick at his partner’s eye. Jobs was so incredulous he called a Disney executive to vent: “Do you know what Michael just did to me?”

Eisner and Jobs came from different backgrounds and opposite coasts, but they were similar in being strong-willed and without much inclination to find compromises. They both had a passion for making good products, which often meant micromanaging details and not sugarcoating their criticisms. Watching Eisner take repeated rides on the Wildlife Express train through Disney World’s Animal Kingdom and coming up with smart ways to improve the customer experience was like watching Jobs play with the interface of an iPod and find ways it could be simplified. Watching them manage people was a less edifying experience.

Both were better at pushing people than being pushed, which led to an unpleasant atmosphere when they started trying to do it to each other. In a disagreement, they tended to assert that the other party was lying. In addition, neither Eisner nor Jobs seemed to believe that he could learn anything from the other; nor would it have occurred to either even to fake a bit of deference by pretending to have anything to learn. Jobs put the onus on Eisner:

The worst thing, to my mind, was that Pixar had successfully reinvented Disney’s business, turning out great films one after the other while Disney turned out flop after flop. You would think the CEO of Disney would be curious how Pixar was doing that. But during the twenty-year relationship, he visited Pixar for a total of about two and a half hours, only to give little congratulatory speeches. He was never curious. I was amazed. Curiosity is very important.



That was overly harsh. Eisner had been up to Pixar a bit more than that, including visits when Jobs wasn’t with him. But it was true that he showed little curiosity about the artistry or technology at the studio. Jobs likewise didn’t spend much time trying to learn from Disney’s management.

The open sniping between Jobs and Eisner began in the summer of 2002. Jobs had always admired the creative spirit of the great Walt Disney, especially because he had nurtured a company to last for generations. He viewed Walt’s nephew Roy as an embodiment of this historic legacy and spirit. Roy was still on the Disney board, despite his own growing estrangement from Eisner, and Jobs let him know that he would not renew the Pixar-Disney deal as long as Eisner was still the CEO.

Roy Disney and Stanley Gold, his close associate on the Disney board, began warning other directors about the Pixar problem. That prompted Eisner to send the board an intemperate email in late August 2002. He was confident that Pixar would eventually renew its deal, he said, partly because Disney had rights to the Pixar movies and characters that had been made thus far. Plus, he said, Disney would be in a better negotiating position in a year, after Pixar finished Finding Nemo. “Yesterday we saw for the second time the new Pixar movie, Finding Nemo, that comes out next May,” he wrote. “This will be a reality check for those guys. It’s okay, but nowhere near as good as their previous films. Of course they think it is great.” There were two major problems with this email: It leaked to the Los Angeles Times, provoking Jobs to go ballistic, and Eisner’s assessment of the movie was wrong, very wrong.

Finding Nemo became Pixar’s (and Disney’s) biggest hit thus far. It easily beat out The Lion King to become, for the time being, the most successful animated movie in history. It grossed $340 million domestically and $868 million worldwide. Until 2010 it was also the most popular DVD of all time, with forty million copies sold, and spawned some of the most popular rides at Disney theme parks. In addition, it was a richly textured, subtle, and deeply beautiful artistic achievement that won the Oscar for best animated feature. “I liked the film because it was about taking risks and learning to let those you love take risks,” Jobs said. Its success added $183 million to Pixar’s cash reserves, giving it a hefty war chest of $521 million for the final showdown with Disney.

Shortly after Finding Nemo was finished, Jobs made Eisner an offer that was so one-sided it was clearly meant to be rejected. Instead of a fifty-fifty split on revenues, as in the existing deal, Jobs proposed a new arrangement in which Pixar would own outright the films it made and the characters in them, and it would merely pay Disney a 7.5% fee to distribute the movies. Plus, the last two ............
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