Business model Pixar |
dinsdag 27 maart 2007 |
The business model of Pixar Animation Studio
Pixar Studio has a clearly defined, distinctive and very succesfull business model. In the model of Pixar the activities in the resource model provide the differentiation strength with respect to competitive providers. These are: the presence of creative supertalent (John Lasseter) as creative leader; it is an organisation with permanent employees so that there is optimal benefit from the learning curve;
a tightly organised production process that leads to a relatively high level of efficiency; an internal training institute focussing on the development and retaining of the creative competence (Pixar University); use and development of advanced technology in the field of computer animation; partnership in the area of distribution with Walt Disney (part of Disney since the start of 2006).
Pixar develops films for the general public that are based on computer animation. The organisation has existed for 20 years and employs 800 people. Since 1995, Pixar has released an international movie hit almost every year. Major successes are: Toy Story, The Incredibles, Finding Nemo and Cars. As of 2005, the ambition has been to release a (hit) film each year. The revenue model of the organisation is also based on this. The most important competences of the organisation are in the creative and the engineering (software design) areas. In the field of creativity, John Lasseter is the driving force behind Pixar, in the field of engineering it is Ed Catsmill. Together with Steve Jobbs, who bought the organisation in 1986 for 10 million dollars, they were there at the birth of Pixar’s success. Employees call the trio ‘the Father, the Son and the Holy Ghost.’
For the full size graphic click here.
Since the organisation is heavily dependent on creative talent, it has evolved from an idea-centred business into a people-centred business. Pixar’s business model differs markedly from the Hollywood model, in which there is a production organisation that is set up in an ad hoc way for each film. Pixar is an organisation with permanent employees in which the development of the skills, the learning curve of the organisation and the connection with the employees is fundamental. An important part of the organisation is Pixar University, a cross between an art and film academy. Each Pixar employee is encouraged to take lessons here for four hours a week.
The way in which the process has been organised is also distinctive. The time from idea to film is about seven years. The production process is well organised and has various phases. Ex-Disney employees who start working at Pixar praise the efficient production process of their new employer. In addition, unlike normal films in which after the filming nothing more can be changed in the basic material, here the material is continually developed in each phase, with a highly polished film as the result.
The differentiating strength of Pixar is not clearly present in the customer value model and in the area of the customer interface. There is, of course, no specific customer group for which developed products are adapted to the specific requirements and with which a specific relationship is built up. In addition, the distribution is contracted to Disney so that use is made of the general distribution channels in the sector.
Facts & Figures
Pixar Studio has a clearly defined, distinctive and very succesfull business model. In the model of Pixar the activities in the resource model provide the differentiation strength with respect to competitive providers. These are: the presence of creative supertalent (John Lasseter) as creative leader; it is an organisation with permanent employees so that there is optimal benefit from the learning curve;
a tightly organised production process that leads to a relatively high level of efficiency; an internal training institute focussing on the development and retaining of the creative competence (Pixar University); use and development of advanced technology in the field of computer animation; partnership in the area of distribution with Walt Disney (part of Disney since the start of 2006).
Pixar develops films for the general public that are based on computer animation. The organisation has existed for 20 years and employs 800 people. Since 1995, Pixar has released an international movie hit almost every year. Major successes are: Toy Story, The Incredibles, Finding Nemo and Cars. As of 2005, the ambition has been to release a (hit) film each year. The revenue model of the organisation is also based on this. The most important competences of the organisation are in the creative and the engineering (software design) areas. In the field of creativity, John Lasseter is the driving force behind Pixar, in the field of engineering it is Ed Catsmill. Together with Steve Jobbs, who bought the organisation in 1986 for 10 million dollars, they were there at the birth of Pixar’s success. Employees call the trio ‘the Father, the Son and the Holy Ghost.’
For the full size graphic click here.
Since the organisation is heavily dependent on creative talent, it has evolved from an idea-centred business into a people-centred business. Pixar’s business model differs markedly from the Hollywood model, in which there is a production organisation that is set up in an ad hoc way for each film. Pixar is an organisation with permanent employees in which the development of the skills, the learning curve of the organisation and the connection with the employees is fundamental. An important part of the organisation is Pixar University, a cross between an art and film academy. Each Pixar employee is encouraged to take lessons here for four hours a week.
The way in which the process has been organised is also distinctive. The time from idea to film is about seven years. The production process is well organised and has various phases. Ex-Disney employees who start working at Pixar praise the efficient production process of their new employer. In addition, unlike normal films in which after the filming nothing more can be changed in the basic material, here the material is continually developed in each phase, with a highly polished film as the result.
The differentiating strength of Pixar is not clearly present in the customer value model and in the area of the customer interface. There is, of course, no specific customer group for which developed products are adapted to the specific requirements and with which a specific relationship is built up. In addition, the distribution is contracted to Disney so that use is made of the general distribution channels in the sector.
Facts & Figures
- Fiscal Year-End: December
- 2005 Revenues (millions): $274.8
- Annual Revenue Growth: 6%
- 2005 Earnings: $152.9
- Annual Earnings Growth: 8%
- Pixar public Company since 1995
- Pixar subsidiary of Disney since 2006
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