Elemental May Be Profitable, But Pixar’s Current Strategy May Not Be Sustainable

It’s been a quiet year for Pixar, relatively speaking. The animation juggernaut’s biggest film this year, Elemental, released a couple months ago in theatres to fairly good reviews (albeit on the lower end for a Pixar film, going by Rotten Tomatoes) and a less than stellar opening weekend at the box office. It would’ve marked the second Pixar film in a row that would underperform both critically and commercially with the studio’s last film, Lightyear, panned as a box office failure that led to dozens of jobs being lost. However, Elemental, to the surprise of many has somehow kept pace even months after its initial release, and is on the verge of crossing the half a billion mark at the box office.

Lightyear grossed a total of $226 million worldwide against a budget of $200 million. Assuming Pixar’s marketing budget was about half of its production costs, it would mean the film lost the studio over $100 million dollars. Ouch. Elemental reportedly had the same budget as Lightyear, though fortunately it seems that irrespective of its underwhelming opening the film has had legs to pull Pixar over into the green. It does beg the question, though: is Pixar’s current production expenditures sustainable for the long-term, or are more layoffs on Bob Iger’s to-do list?

Bob Iger
Look out, children, it’s the money-man. Credit: Reuters

Earlier this year, as a part of Bob Iger’s grand plan to to eliminate over 7,000 jobs in order to cut $5.5 billion dollars in operating costs over at Walt Disney, 75 of Pixar’s employees were let go. Among which included the director of Lightyear, Angus MacLane, and longtime executive, Galyn Susman, who had been at Pixar since the release of the original Toy Story. It’s infuriating that Iger sees the ridding of the livelihoods of workers as merely “cutting costs.” Though it shouldn’t come as a total surprise as his recent comments regarding the writer’s and actor’s strikes only cement his character as one that is incapable of seeing past the profit margins. At least we can (hopefully) breathe easy in knowing that due to Elemental’s unexpected rebound at the box office, that more layoffs aren’t on the horizon at Pixar…yet.

Animation isn’t cheap, and Pixar have amongst the highest production budgets across the industry; and have so for over a decade. The studio has been putting in $100+ million dollars into their iconic films ever since Monster, Inc all way back in 2001. When asked by Variety if there was a way for the studio to make these movies at a cheaper scale Pixar president, Jim Morris, said the following:

“That’s a constant question. One of the ways you make these films for less money, and almost all of our competitors do this, is to do work offshore. It’s only us and Disney Animation that makes animation films in the U.S. anymore with all of the artists under one roof. We feel like having a colony of artists approach has differentiated our films. We hope to find a path to make that work. “Elemental” was particularly expensive because all the characters have visual effects.”

He would continue to elaborate that when Pixar posts its budget, it is the entire running cost of the studio, including the salaries of executives; compared to the reported budgets of other companies who may only post the direct production cost. This puts that $200 million into some context, as we know that executives take a more than healthy paycheque, but that still doesn’t negate the fact that the productions are incredibly expensive. His statement about the studio keeping all their work in-house and not offshoring some of the animation load overseas does add even more context as to why their budgets are a bit bloated. Though I think this might be more about keeping their secrets within their walled garden than creating a “colony of artists.”

The animation work is flawless. Credit: Pixar

While competitors like DreamWorks have outsourced some of its animation in the past to many of their global campuses—Puss In Boots was mostly done in Bangalore—which causes them to have a noticeably cheaper production budget for each of their marquee films, Pixar is far more secretive with their process. Both Presto and RenderMan are propriety softwares that have been developed in-house and used by Pixar for each of their films. Not much is known about the technical aspects of these softwares, and nor are they for sale or licensable; and I’d venture to guess that Pixar plan to keep it that way. It’s fair for the studio to want do things their own way, though this amount of gatekeeping may cause some budgetary issues in the long run as movies inevitably get more pricey to produce; leading to unrealistic box office expectations and layoffs—because that always seems to be the only “solution.”

With that said, though, seeing how the U.S has a history of exploiting cheap foreign labor—many of whose working conditions are dire—it may be best that Pixar keep things under the same roof. Furthermore, at least according to this former employee, it looks like Pixar have grown to not allow crunch within the studio with the average work week for an employee being between 40-50 hours, with 60 being “unusual.” Though this post is nine years old, my hope is that it’s still the case today as some of the stories from this former employee of the early years of Pixar sound horrific. This could also be a reason for extended production times, which inevitably lead to a higher budgets.

Your Name
“Your Name” was a cultural phenomenon a few years back. Its budget? A little over $5 million. Credit: Makoto Shinkai/Toho/CoMix Wave Films

Paying your workers an appropriate wage and giving them reasonable working hours are both things that should be a standard across every industry, so if Pixar are indeed doing both, then neither of those things should be in consideration to alter for the means to reduce future budgets. Because a quick look at Japan, arguably the leader in the global animation industry in terms of productions per year, shows just how much passion can be exploited by studios. Writer Eric Margolis from Vox outlined in a piece a few years back about the dark side of the anime industry in Japan. An industry that as of 2019 brought in over $19 billion a year, though most its workers were barely making enough to survive; all the while working egregious hours that had some sleeping at their desks.

Though Pixar’s president did mention that Elemental was particularly expensive due to the nature of its animation work, I do think Pixar need to investigate strategies to see ways in which they can keep costs down for future titles. Whether that be ethical outsourcing, having occasional ‘gap years’ wherein they produce multiple smaller, less demanding titles that are direct-to-streaming, or even diversifying their productions to other mediums. All that said, it’s good to see that Elemental has made a comeback at the box office, as its immigrant story is one that’s unique— even if a tad shallow from critical consensus—and shows Pixar that stories like it have space to be successful.

Shaz Mohsin

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