Thursday, October 21, 2010

Pixar: Vertical Integration and Outsourcing

Soon after Robert Iger took over as CEO of the Walt Disney Company in late 2005, he turned his attention toward Pixar, the animation studio with which Disney had worked since 1991 and was responsible for producing hits such as Toy Story and Finding Nemo. Disney's own animated film business had been in decline since Jeffrey Katzenberg left to establish rival studio Dreamworks and the business relied on revenue from its partnership with Pixar to maintain performance. With the Co- Production Agreement between the two studios coming to a close in 2006, Pixar was looking to negotiate better terms with another distribution partner. This is why Pixar follows a strategy of Vertical Integration.

Outsourcing: I think the outsourcing had an interesting effect on world animation.  Everyone thinks about Disney when it comes to animation, but I don’t think they’ve created anything that really captured people’s imaginations since 1994’s.I think that this is a result of the decline in American animation.  People say that the reason that America drawn animation has declined is because of Pixar and Dreamworks.  That’s probably true, but I think we also have to take into account that after most animation began to be outsourced to Korea in the 1980’s and 1990’s, fewer artists in the U.S. could find jobs as animators, leading to a general decline in talent.Apparently, Pixar can't outsource because their directors and creative staff are involved in every step of a project from the beginning to the end. But I think Pixar does outsourcing since it works closely with Walt Disney.

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