Aug 9, 2023

Pixar President Explains Why the Studio's Movies Are So Expensive - Not for the Reason You Think

A question often asked by readers is why Pixar films are more expensive to produce than other studio blockbusters.

To take a few examples from this year's theatrical releases, "Spider-Man: Across the Spider-Verse" had a production budget of $100-150 million, "The Super Mario Brothers Movie" was about $100 million, and "Ruby Gilman," "Teenage Kraken" and " Teenage Mutant Ninja Turtles" were reported at $70 million each: "Mutant Mayhem. Disney-Pixar's "Elemental," on the other hand, is reported to be worth a whopping $200 million.

What accounts for the large difference in budgets - a common misconception is that Pixar's films cost more because they are more visually and technically complex. But according to Pixar president Jim Morris (pictured above), that is not necessarily the main reason. in a new interview with Variety, Morris explained the various factors that increase Pixar's production costs.

"One way to make these films cheaper is to work offshore, which is what almost all of our competitors are doing," Morris told Variety.

"We and Disney Animation are the only ones producing animated films in the U.S. anymore. We feel that our artists' colonial approach sets our films apart." Morris's statement is not entirely accurate, as DreamWorks also continues to produce many of its films in Glendale, including "Ruby Kraken," but it is true that films such as "Spider-Man," "Super Mario" and "TMNT" are produced in Canada or France. The advantages of studios producing in other countries are not only cheaper labor (such as the starting wage of $22.50 per hour for animators on "Spider-Verse"), but also foreign tax credits, rebates, and incentives that use tax money from other countries to fund US production.

Also interesting to consider: while DreamWorks is unionized, Emeryville-based Pixar is not a member of an animation union. In other words, California labor is more expensive, but unionization is not the cause of higher production costs.

Morris argued that another reason Pixar films are reported to be more expensive than other studios is that Pixar's accounting includes certain items in its budget that other studios exclude. He explained:

Another thing about movie budgets is that our entire company exists just to make these movies. So the budget is everything we need to run the entire company. Sometimes the budgets reported (for other films) are physical production costs and do not include executive salaries. Our budget includes all of those things, so the accounting background is lost. But that doesn't mean it isn't expensive.

Pixar does not push the kind of graphical experimentation that Sony Pictures Animation and other studios have attempted in recent years, but that does not mean that Pixar's films are not visually and technically complex. According to Morris, "Elemental" was "particularly expensive because of the visual effects on every character."

In the case of "Elemental," the fire and water characters included volumetric simulations, which required enormous processing power. The studio had to increase processing power to a record 151,000 cores (i.e., CPU processing units) for the film's production, and building such a supercomputer infrastructure is not cheap.

It also depends on the movie. Last year's "Lightyear" was one of Hollywood's biggest flops, losing Disney $106 million, according to an independent analysis by Deadline. On the other hand, "Elemental" got off to a slow start, but it made a very unconventional box office performance and turned a profit. According to Morris, "Elemental" is turning a profit at the box office alone, not taking into account other revenue sources: "With the box office we're seeing now, it should break even with theatrical releases. And then there is revenue from streaming, theme parks, and consumer products. This will certainly be a profitable film for the Disney Corporation."

"That's always the question," Morris said, promising to keep the production in California. He also said that prior to "Elemental," which cost more because of its technical complexity, "we have lowered the cost of film production." Disney CEO Bob Iger said on an earnings call this afternoon that Disney is "...... the cost per title" for all future releases. Pixar's cost reduction will be imperative for Morris, as he stated that the company is focused on "reducing ...

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