I took my 11 year old son to the annual meeting this year and we sat in the third row right next to the Pixar ee seats. They seemed to be eyeing him a lot as the meeting went on. I could only see about five other children about his age in the main room....They had an overflow room this year that was hooked up to the slide/film presentation as well as the PA for Q&A at the end. So, many more attendees this year than last, plus we got more copies of the posters and free passes to the art museum. Here is more of what I remember about the rest of the meeting.......
Not as much about the financials as last year. Jobs started off with a slide show about the industry-wide growth in animation revenues, from 1995 to present. Part of this included the fact that last year had five animated films but the market held up and total revenues were much higher than any year before (599 mil). The point he was making was that animation films are a valid medium and good ones are products that will continue to earn money for ever. I'm not sure that 1999 will be able to top 98 in total revenues, mostly because of fewer animated films being released, but Jobs said that Tarzan was doing very well, and he expected TS2 to do at least as well as TS1.
He mentioned that merchandise sales were below expectations, but said that the whole market was slumping, including stuff for Star Wars and Wild, Wild West. And the video hasn't sold as well as TS1 but that overseas sales of it starts this week. There were no hard figures on this (I probably couldn't remember them anyway), but no one seemed to mind.
Next, Jobs got to the parts he liked better:
Talking about the rendering of the films, and how TS1 had 60,000 rendermarks, Bugs Life & TS2 600,000 and Monsters, Inc. 2,000,000+. All of this meant more details, more realism. He added that all the technology was fantastic but didn't mean much if the story wasn't compelling. He mentioned that there were no animated sequels that were as good as the originals (very few to begin with) and they worked very hard to make TS2 at least as good as TS1, if not better. He also talked about the other animators (including Disney) having to cobble together off the self software to make digital animation, leaving Pixar alone with the complete technology package. So he felt that with their technology and director experteese (Lassiter, who wasn't there), they were years ahead of anyone else.
Then he showed us two clips of TS2, one a clip of Woody getting a tear in his shoulder, and being placed on a shelf with another 'wounded' toy. Woody realizes that he is mortal and decides to help the other toys that are going to be sold at the Yard Sale. This clip was amusing it a quiet way, very good, quiet visual and verbal jokes.
Next was an action clip, that was very compelling and had everyone laughing their heads off! Woody has been kidnapped by an evil toy collector so Buzz and gang decide to rescue him. The clip shows the toys trying to cross a busy street while hiding under traffic cones. They make it, barely, unaware of all the havoc they unleash on the traffic that encounters them. This scene was hilarious and scary at the same time, a perfect blend of thrills and humor. After seeing this, I think that TS2 may come in better than TS1. They purposely didn't show any of the new characters (with famous voices), but did mention that the soundtrack was produced by...........I forgot darnit, but it was a BIG NAME...anyone remember? We were all impressed, but for the life of me the name eludes me.....
Then he talked about Monsters, Inc, due out in 2001, no real information except to say that production was underway, it looked great, and other, unnamed features were in development. His goal is to have one great film out a year (starting in 2001), that would generate money ad infinitum. Sounds good to me.
He mentioned that the new CFO would be announced soon and that he had very many top quality names to pick from.
During the Q & A, several questions were about the money spent on R & D, (10 mil this year). He felt this was a small price to pay to be able to do it all: come up with the ideas, render it, and produce the actual films that goes to the theatres, and have 4(or was that 5) going at a time! This technology also includes digitally remastering the film for TV and video, instead of just cropping off the sides or "cutting and panning" as most broadcasters do.
Other questions answered were about the way Pixar and Disney split up the money. Disney gets to recoup their out of pocket expenses for ads, and merchandise production/distribution costs, then they split the revenues 50/50.
We left feeling good, but then we didn't know that the stock price was getting a haircut while he spoke....and hey, I want it to be higher, but I have been long on this stock since I bought originally at 20, and then some more at 37 1/2, so I'm still making money and may have to buy some more if it goes to 40. I'm not looking for daytrading stock, being a long, and I do believe that he will deliver the goods.
Too longwinded.....
CMM
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