The Rise of Animation
From Disney to Lucas to Pixar

7 October 2014

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Peter Kramer is a Senior Lecturer in Film Studies at the University of East Anglia. His recent books include The New Hollywood: From Bonnie and Clyde to Star Wars (2005), 2001: A Space Odyssey (2010) and A Clockwork Orange (2011).

 Much of contemporary Hollywood cinema – in particular its reliance on special effects driven Science Fiction and fantasy films addressed to youth audiences as well as children and their parents – can be explained with reference to the enormous impact of 2001: A Space Odyssey (1968) and Star Wars (1977). I have outlined this in my last two contributions to Pure Movies. But there is, of course, more to this story than I have been able to tell so far.

When I did my initial research on Star Wars about twenty years ago, I was surprised to find that, in addition to referencing 2001, both George Lucas and the film’s critics and audiences in the United States described it as a kind of Disney movie. I was even more baffled when, during my work on 2001, I realised that in the project’s early stages (when the film was still meant to have had a scientific prologue and explanatory voiceover narration), one of its most important, albeit implicit, reference points was the output of the Walt Disney Company, notably documentaries and features (both animated and live action) about animals behaving much like humans (a crucial context for understanding 2001’s pre-historic opening sequence), television programmes about space exploration as well as contemporary comedies and historical adventures about advanced technologies (amazingly, the highest grossing ‘Science Fiction’ films in the United States before 2001 had been Disney’s 20,000 Leagues Under the Sea [1954] and The Absent-Minded Professor [1961]). (3) Furthermore, much like Disney’s output (and Star Wars), 2001 was originally marketed to, and immensely successful with, family audiences. (4)

This article, then, tells the story of how contemporary Hollywood took shape by focusing on the Disney company and on the filmmaking process it is most closely associated with: animation. I want to start by discussing a movie which is both one of my personal favourites and an outstanding example of how contemporary Hollywood cinema often pays tribute to Star Wars (alternatively, I could have chosen WALL-E, a film full of references to 2001).

Toy Story 2

In November 1999, Variety’s review of Disney and Pixar’s Toy Story 2 praised the film with the following comparison: “In the realm of sequels, Toy Story 2 is to Toy Story what The Empire Strikes Back was to its predecessor – a richer, more satisfying film in every respect.” That the reviewer chose George Lucas’s Star Wars saga as a reference point is no coincidence; instead this reference is prompted by the Toy Story films themselves. Already in the first Toy Story, released in 1995, there were numerous references to Star Wars. Indeed, one of the main developments in the story is Buzz Lightyear’s reluctant acceptance of the fact that he is merely a toy – and not a space ranger, who has secret information about the only weakness of the ultimate weapon that the Evil Emperor Zurg is building so as to be able to crush all his enemies and take over the known universe. Sounds familiar? Of course, this is the basic plot of Star Wars, with Buzz as a heavily militarised, parodic version of Princess Leia and Luke Skywalker.


The Star Wars plot is re-activated in Toy Story 2, when during a scene in a toy store, Buzz changes place with one of the thousands of other Buzz Lightyears on display there. The new Buzz still lives in his imaginary, Star Wars-like universe, and when he shortly afterwards confronts Zurg, he accuses him of having killed his father, to which Zurg, inevitably, replies: “I am your father”, thus replaying the climactic encounter of The Empire Strikes Back, in which Luke finds out that Darth Vader is his father. However, unlike the Star Wars trilogy, where it takes another movie to resolve the conflict between father and son, Toy Story 2 immediately presents a resolution. “I have a lot of catching up to do with my dad”, says Buzz while happily playing catch with Zurg. In the world of the Toy Story saga, we learn here and elsewhere, playing is everything, because it is seen as an expression of love.

Taking my cue from this brief discussion of Toy Story 2, in the remaineder of this article I want to explore the operations of, and complex interactions between, three of the most important players in Hollywood cinema since the late 1970s: the Walt Disney Company, George Lucas and Pixar. As I will show, their histories are closely connected, and (cel or computer) animation  plays an key role in them – and indeed in contemporary Hollywood in general.

George Lucas’s filmmaking and business operations since the late 1970s were inspired by Disney as were the computer scientists and animators who innovated computer animation  across the 1970s and 1980s, during which time many of them found a temporary home at Lucasfilm, before Steve Jobs, in 1985, bought their hardware and their creativity, calling the new corporate entity Pixar. Soon afterwards, Lucas (in collaboration with Steven Spielberg) entered the field of cel animation as a producer, and in the 1990s he – together with Spielberg and James Cameron – spearheaded the introduction of computer generated imagery into live action films. At the same time, Pixar started producing full-length computer-animated features under a financing and distribution deal with Disney. In the light of these complexly intertwined histories, it is no surprise that Pixar and Lucasfilm eventually became part of the Disney empire (the former in 2006, the latter in 2012).

Let’s start by taking a closer look at Disney.

The Walt Disney Company

The enormous influence that the Walt Disney Company has exerted over the rest of the film industry since the 1970s is based, among other things, on its profitability. Indeed, unlike most of the other major Hollywood studios, Disney was consistently profitable throughout the 1950s, 1960s and 1970s. Columbia, Fox, MGM, United Artists and Warners were all making a loss during several years in the late 1950s and early 1960s, and once again during the late 1960s and early 1970s. Even during their profitable years, neither these five studios, nor Paramount and Universal, were able to compete with Disney’s profitability. Four elements distinguished Disney from its studio rivals, and they help to explain the company’s superior performance.


Firstly, since the opening of Disneyland in 1955, the company was heavily involved in the theme park business, which became its main source of income after the opening of Walt Disney World in 1971. By contrast, until the 1980s the other studios generated most of their income through theatrical film releases.

Secondly, Disney released far fewer new films than its competitors (around half a dozen per year), largely avoided mega-budget productions, and was very successful with regular re-releases from its back catalogue; the most successful of these were animated features. By contrast, the other studios, with few exceptions (such as MGM’s Gone with the Wind), had no films in their back catalogue which they could re-release regularly, and every year they invested enormous amounts of money in the production and marketing of dozens of new films, including super-expensive blockbuster productions, among them numerous disastrous flops.

Thirdly, Disney’s operations were synergistic, that is, the company’s various divisions (theme parks, theatrical releases, television shows and product licensing) advertised each other’s products, and thus generated additional business. Throughout the 1960s and 1970s, the other Hollywood studios were either taken over by conglomerates active in many different industries, or they themselves diversified their operations through takeovers of businesses in more or less closely related industries. Yet, unlike Disney, none of the resulting corporate entities achieved much, if any, synergy.

Finally, whereas the other studios often – and especially in the late 1960s and early 1970s – departed from Hollywood’s traditional ideal of providing entertainment for the whole family, Disney aimed all its products at children and their parents, in the (in places justified) hope that this would not necessarily alienate teenagers and young adults.

In the mid-1970s, other Hollywood studios began to try to imitate the Disney model, most notably with a series of family-oriented Science Fiction films. Two of these – Warners’ Superman (1978) and Paramount’s Star Trek: The Motion Picture (1979) – drew on properties owned by other divisions of the same company (D.C. Comics and Paramount Television), with a view of generating future synergies. However, the two most successful of these films – George Lucas’s Star Wars and Steven Spielberg’s Close Encounters of the Third Kind (both released in 1977) – were based on original scripts by leading young filmmakers, both of whom acknowledged the influence of Disney movies, in particular Disney animation, on their work. Indeed, reviews of these two films and of Lucas and Spielberg’s megahits across the next few years – two Star Wars sequels (1980 and 1983), Raiders of the Lost Ark (1981) and E.T. (1982) – often referenced the Disney legacy. And these Lucas and Spielberg films in turn marked a fundamental transition in Hollywood history.

In striking contrast to the decade 1967-76, the biggest hits in the United States, and also in the rest of the world, since 1977 have been what I have elsewhere called “family-adventure movies”, that is films addressed – like Disney’s traditional output – to children and their parents, but also to teenagers and young adults. The most successful family-adventure movies do this typically by telling stories about the spectacular, often fantastic adventures of young or youthful, male protagonists and about their emotionally charged and deeply problematic familial, or quasi-familial, relationships (often with a particular focus on absent or dysfunctional fathers, and on the love between family members as well as friendship); by evoking entertainment forms associated with childhood (such as children’s books, fairy-tales, ghost stories, comics, toys, movie serials and kids TV, rollercoaster rides and other theme park attractions, and, indeed, animation); and by being released in the run-up to, or during, the summer and Christmas holidays. In other words, family-adventure movies take family audiences on cinematic adventures which usually revolve around the on-screen adventures of a family or family-like group.

Family-adventure movies – often directly inspired by Star Wars and Lucas and Spielberg’s other blockbusters of the late 1970s and early 1980s – have become central to the operations of all the major studios. This becomes obvious when looking at some of the studios’ major franchises: until recently, Fox had Star Wars (six huge hits by 2005; subsequent entries to be released by Disney) and now it has Avatar (one record-breaking hit in 2009, at least three more to come); Paramount has Indiana Jones (four films so far between 1981 and 2008) and, due to a deal it made with DreamWorks and DreamWorks Animation in 2005, Shrek (four films, 2001-2010) and Transformers (three films, 2007-2011); Warner Bros. has Batman (seven films, 1989- 2012), the Lord of the Rings saga (four films, 2001-2012) and Harry Potter (eight films, 2001-2011); Universal has Back to the Future (three films, 1985-1990), Jurassic Park (three films, 1993-2001) and Despicable Me (two films, 2010-2013); Sony/Columbia has Spiderman (four films, 2002-2012); and Disney now has Star Wars, as well as Pirates of the Caribbean (four films, 2003-2011) and, of course, Toy Story (three films, 1995-2010).

Furthermore, since the 1980s, the corporations which own the major Hollywood studios have streamlined their operations, by shedding businesses that are unrelated to media and entertainment, and by attempting to create synergistic relationships between the remaining media and entertainment divisions (as Warners did, for example, with their Batman franchise). In other words, they have moved towards the corporate structure that Disney had been so successful with from the 1950s to the 1970s. As part of this transformation, several companies have created or expanded product licensing divisions (most of their business being generated by family-adventure franchises), and invested heavily in theme parks (notably Universal) and also in animated features (more about these later).

Somewhat ironically, since the 1980s, Disney has moved away from its traditional business model by branching out into less family-friendly products (for example through the formation of Touchstone in 1984 and the acquisition of Miramax in 1993), and by investing so heavily in broadcasting (by, for example, acquiring a number of TV and radio networks as well as dozens of radio stations) that today almost half of Disney’s revenues, and the vast majority of its profits, are generated not by its theme parks or theatrical releases but by its “Media Networks” division.

So what is the role of animation in all this?

Disney Animation

Given the fact that Disney had started out in the 1920s as an animation studio and that most of its licensed merchandise as well as key aspects of its theme parks were based on the iconography and stories of its animated films, it comes as a surprise to find out that after a change in top management in 1984, rumours started circulating that the company might close down its feature animation department. This was due to the disappointing box office performance of recent productions, especially of The Black Cauldron (1985). Despite another box office disappointment the following year (with Basil The Great Mouse Detective), however, Disney continued, and even increased, its commitment to feature animation. This decision was encouraged by the fact that re-releases of older animated features continued to perform well, and by the impressive box office performance of the Spielberg produced animated feature An American Tail (1986, directed by former Disney animator Don Bluth), which Spielberg followed with the equally successful The Land Before Time (1988, directed by Bluth and co-produced by George Lucas), and the blockbuster success of the animation-live action hybrid Who Framed Roger Rabbit? (1988, co-produced by Touchstone and Spielberg’s production company Amblin).


Although the box office performance of Disney’s new animated releases did not improve much for a few years after 1984, animated features continued to be a major source of income for the company, because, from 1985 onwards, Disney complemented its theatrical re-releases of classic films with their release on video. We can get a sense of the enormous impact these video releases had by looking at the annual sales charts in the US. At the time, most Hollywood films sold only relatively few copies directly to consumers (known as the “sell-through” market) with the vast majority of copies being bought by rental stores. Video sell through charts were initially dominated by exercise and music videos. Yet, Disney’s classic animated features performed exceptionally well as sell-throughs.

Initially, Disney released only one or two classic films per year, each film being available for only a limited period of time. After a few initial problems, the 1985 release Pinocchio (1940) eventually became the third biggest selling video of 1986 in the US. Sleeping Beauty (1959) was number three in 1987. In both years, only Jane Fonda’s various workout videos sold more copies directly to consumers. From 1988 to 1995, with only one exception (Pretty Woman in 1991), the top sell-through video in the US was an animated Disney movie. What is more, when Disney increased the number of annual releases in the 1990s, it managed to place on average three films in the annual top ten, including new releases from The Little Mermaid (1989) onwards and even a direct-to-video sequel to Aladdin (The Return of Jafar, 1994). If we add Disney’s sing-along-videos and new animated features by other companies (notably An American Tail  and The Land Before Time), and also include the animation/live action hybrids Who Framed Roger Rabbit? and Warners’ Space Jam (1996), we can see that the video sell-through market came to be dominated by animation.

This is particularly important in the light of the fact that, by the 1990s, the sell-through market had dwarfed the video rental market, and indeed the theatrical market, so as to become Hollywood’s single most important source of income for its movies. An all-time US video sales chart (combining sell-through and rental-store copies) compiled in 1998, listed seven Disney animated features in the top ten, including all of the top five. Disney’s wholesale revenues from these video sales were on average around $300 million per title, exceeding Disney’s rental income from each film’s theatrical release in the US. Since then, a similar – albeit less pronounced – pattern has emerged in DVD sales in the US. An all-time chart compiled in 2004 was topped by Pixar’s  Finding Nemo (2003) with Monsters Inc. (2001) at number six and The Lion King (1994) at number fourteen, plus two non-Disney animated features also in the top fifteen. A consolidated all-time video and DVD sales chart compiled at the same time had seven Disney animated features in the top ten, including the top two positions (held by The Lion King and Snow White); DreamWorks’ Shrek (2001) was the eighth animated feature in the top ten.

There has been a dramatic reversal, then, between a low point around 1984, when the commercial potential of new animated features was regarded so pessimistically that Disney was said to consider a stop in their production, to the early noughties, when animated features, both old and new, both Disney and non-Disney, had come to dominate video and DVD sales, which is where Hollywood movies make most of their money.

Finally, let’s take a closer look at the animated feature output of the other Hollywood studios, and at the process by which Pixar became part of Disney.

Animation from Pixar, DreamWorks and the rest

In the 1970s and 1980s, Disney’s classic animation inspired computer scientists and animators, many of whom had been trained at the Disney company, to join forces in the pursuit of the dream of computer generated animated features. Between 1979 and 1985, some of these dreamers found a home at George Lucas’s Lucasfilm, forming a computer graphics division which was, however, meant to develop new hardware and software, rather than making movies. This emphasis on making tools rather than films did not change much after Apple founder Steve Jobs bought this division from Lucasfilm in 1985, at which point it acquired the name Pixar. Still, key personnel, in particular former Disney animator John Lasseter, continued to work on computer animated short films, and in 1995 completed the world’s first computer animated feature film, Toy Story, under a very restrictive three picture deal with the Disney company.

By this time, Disney’s own feature animation had undergone an astonishing revival. The Little Mermaid became the thirteenth highest grossing film released in the US in 1989; this was the closest any Disney animated feature had come to the top ten since The Jungle Book had been in 4th place in 1967. Beauty and the Beast was the number three film of 1991, and Aladdin the top-grossing film of 1992. In 1994, finally, The Lion King became one of the highest grossing films of all time. In the wake of Disney’s success, other studios also entered the field, and Hollywood’s output of animated features increased from about ten per year in the mid-1990s to over twenty in recent years. The most successful new entrant, apart from the Disney-affiliated Pixar, was DreamWorks, run by Steven Spielberg and former Disney executive Jeffrey Katzenberg (who was in charge of DreamWorks Animation, which has in the meantime become a separate company).

In the 1990s, there was only ever one animated feature in the annual box office top ten in the US (and that not every year). In the noughties, it became quite common that two or three of the top ten films were animated, most of them by computer. The share of total box office revenues in the US going to animated features has risen from around 5 per cent in the second half of the 1990s to over 10 per cent in recent years.  While new cel animated features have become commercially marginal in the US, re-releases of modern Disney classics such as The Lion King and Beauty and the Beast can still generate impressive box office revenues (up to around $100 million ).

Because of their traditional ability to find new audiences through theatrical re-releases, animated features continue to rank highly in all-time box office charts. The current inflation-adjusted Box Office Mojo all-time US chart ranks Snow White at number ten, 101 Dalmations (1961) at number 11, The Lion King at number 17, Fantasia (1940) at number 22, The Jungle Book at number 29 and Sleeping Beauty at number 30. The first non-Disney animated film – and also the first computer animation – on this list is Shrek 2 (2004) at number 31.

If we look at Hollywood’s top grossing exports, we also find that animated features play a prominent role. Due to varying rates of ticket price inflation in many countries and due to fluctuating exchange rates, it is impossible to compare box office revenues for foreign markets across decades. However we can break up the Internet Movie Database’s all-time non-US box office chart into five year periods starting in 1977, and determine Hollywood’s ten biggest export hits for each five year period. There were no animated features in the top ten for 1977-81 and 1982-87. But since then, for each five year period, on average one of the top ten films has been an animated feature. Interestingly, the number of animated top ten hits in the domestic market for each five year period since 1987 has been two, that is double the figure for the export market. This probably has something to do with the fact that these films are comedies, and by and large comedy does not transfer as well from the American market to export markets as other genres do.

If we look at the animated features that have generated the most revenues at the worldwide box office as well as on video and DVD in recent decades, we find that Pixar stands out. Individual Disney and DreamWorks titles may have made more money than most Pixar titles, but Pixar’s releases have performed consistently well, each one generating several hundred million dollars in box office and DVD revenues. Top titles such as Finding Nemo and Toy Story 3 (2010) have made in the region of $1 billion at the worldwide box office and probably even more on DVD.

Pixar’s ability to produce megahits with a regularity that is unprecedented in Hollywood history was probably the main reason for the astonishing decision taken by Disney’s new top management in 2006. Although, through its earlier contracts with Pixar, Disney already controlled the rights to all existing Pixar films and characters, Disney paid over $7 billion to take over the smaller company, so as to own all future Pixar films as well. As a consequence of this deal, Steve Jobs became Disney’s largest individual shareholder, joining its board of directors, while Pixar’s Edwin Catmull became president of the combined Pixar and Disney Animation Studios, for which John Lasseter acted as chief creative officer (while also serving as the principal creative advisor for Walt Disney Imagineering and thus being centrally involved with Disney’s theme parks). It is worth noting that around this time Lasseter’s role first at Pixar and then at Pixar/Disney was considered to be so important that Premiere magazine twice (in 2004 and 2006) awarded him (jointly with Jobs) the top spot in their annual “power list”, which identified the fifty most powerful people in Hollywood.

This is perhaps the clearest indication that (computer) animation really is at the very heart of current Hollywood cinema. One can take this point a step further by considering the use of computer generated imagery in live action films; such films are not usually characterised as “animation”, although some of them are so heavily dependent on CGI that they could easily be classified as such. Indeed, the website “The Numbers” tabulates box office revenues and lists top hits according to “production method”; one category is the “Animation/Live Action” hybrid, which, for this website, does not only include films such as Space Jam and Who Framed Roger Rabbit? but also most of the very biggest box office hits of the last two decades, ranging from Terminator 2 (1991) and Jurassic Park (1993) to the Star Wars prequels and re-releases of the original trilogy as well as Avatar (2009).

Another piece of evidence for the centrality of animation (in whatever form) to the contemporary entertainment industry is the fact that in terms of spin-off products, traditional live action films (that is, those without much CGI) can rarely compete with the top animated features and CGI spectaculars. Most notably, stage versions of animated hits such as The Lion King and Beauty and the Beast generate hundreds of millions of dollars in theatrical revenues every year. And films ranging from The Lion King to Cars (2006) have been reported to have sold merchandise worth several billion dollars (although it has to be noted that only a small percentage of this money is returned to the rights holders, which in most of these cases is Disney).

Toy Story 2 again

By way of conclusion, I now want to return to the film with which I started this article. Toy Story 2 is remarkably upfront about its mission to promote merchandise. For example, the film starts as a video game, and one of its subplots is the gameplayer’s search for instructions on how to complete the game successfully. More centrally, the film is, of course, about toys which its audiences can purchase, a fact highlighted by one of Tourguide Barbie’s comments in a huge toy store: “And this is the Buzz Lightyear aisle. Back in 1995, shortsighted retailers did not order enough dolls to meet demand.” But this time, it was implied, they certainly had, and children in the audience would be able to buy and play with Buzz, Woody and the others in the same way that the children within the film play with them, reenacting stories they have seen (including the story of this film), and making up stories of their own.


Does this incitement to consumption mean that the film has no interesting story to tell? Quite on the contrary, like the first Toy Story, the sequel turns the very status of commodities into high drama. In a plot twist apparently inspired by John Lasseter’s own activity as a toy collector, Woody turns out to be a valuable collector’s item. He is stolen by a greedy toy store owner who wants to sell him to a Japanese museum. In the early days of television, Woody was the star of a children’s programme designed to entice kids to ask their parents to buy the featured toys (much like he is now the star of the Toy Story films enticing kids to do the same). Because of the built-in obsolesence of consumerism, all of the Woody dolls have long been replaced by more up-to-date items, yet “our” Woody has apparently been handed down in good condition from one generation to the next. Now he has to make a difficult choice: To be admired for eternity in a museum, or to return to Andy, the boy who loves him, knowing that in time this love will die and Woody may well end up on a scrap heap.

Thus, Toy Story 2 reflects in a somewhat paradoxical fashion on its own status as an entertaining advertisement for the toys it features, by emphasising the irrecuperable loss that potentially accompanies new purchases. Each new toy leads the old ones closer to falling into disregard and eventually into oblivion – either because the new toy is more impressive (the central issue of the first Toy Story) or because it signals the inevitable growing up and growing away of the child (the central issue of Toy Story 2).

Toy Story 2 contrasts the tempting view of the thousands of brand-new Buzz Lightyears and other toys on display in the toy store shown in the film, with the heart breaking story of Jessie, Woody’s female pal in his TV show, who was neglected and then given away by the girl she loved. In a consumerist culture, which offers children and teenagers an endless stream of products for each stage in their development, Jessie’s fate is the fate of all toys. When it comes to selling movie merchandise, then, the Toy Story films send very mixed messages, indeed.

However, this may be a far too literal interpretation of the films. Their emphasis on the painful separations that come with growing up, and the intense, yet mostly only temporary relationships grown-ups may enter into, surely relates much more to interactions between human beings than to those between humans and toys. After all, commodities are disposable, whereas human beings are not. Thus, rather than being merely a self-reflexive meditation on its own – and its audience’s – consumerism, Toy Story 2 is also a film about people, both young and old, coming to terms with the fact that their bonds with the ones they love, and are loved by, will inevitably be broken. The film’s central characters learn to accept this through their friendship with each other. Echoing the end of Casablanca, the film’s final scene, which is accompanied by a rendition of the song “You Have a Friend in Me”, shows Buzz and Woody talking about Andy whose love they know they will eventually lose. Woody says that “[I]t’ll be fun while it lasts…. Besides, when it all ends I will have old Buzz Lightyear to keep me company – for infinity and beyond.”