Capitalism is the foundation that allows Pixar films to come into existence. Without a free market—where small film studios can compete with global giants—we would still be watching ho-hum Disney films. Because of capitalism, Pixar (a startup with loads of talent) was able to compete with Disney (a giant resting on its laurels) as an equal.
Steve Jobs (the late billionaire tech entrepreneur and founder of Apple, Inc.) purchased Pixar from George Lucas in 1986. Pixar had not yet made a single movie, so Jobs took a considerable risk. He invested $50 million of his own into Pixar and nurtured its animation group to the point where Disney was willing to distribute its first big-budget film, Toy Story .
A week after Toy Story’s blockbuster opening (it was the top-grossing film of 1995), Jobs took Pixar public and his shares (80 percent of Pixar) were worth $1.2 billion overnight. Pixar’s ability to merge digital technology with art revolutionized animated films in the way that Walt Disney did when he released Snow White in 1937.
In the late 80’s and 90’s, Disney’s animation studio was a mess. It was cranking out big-budget bombs and had all-but-abandoned Walt Disney’s legacy of innovation and wholesome fun. In fact, Disney almost killed Toy Story by demanding that Pixar animators make one of the heroes, Woody, a mean and jealous character. Woody’s voice, actor Tom Hanks, even exclaimed: “This guy’s a real jerk!” when he read the initial script. It was only when Disney backed off and let Pixar control the plot that Toy Story came to life.
After Pixar released subsequent blockbusters like Monsters, Inc. and Finding Nemo , Disney realized that it needed Pixar if it wanted to save its motion-picture business—the revenue source for its theme parks, TV programs, character toys and merchandizing. Disney purchased Pixar and allowed its animators to keep working independently at their own campus in Emeryville, CA. So, capitalism allowed the best animation studio to survive instead of getting squeezed out by the big guy.