The Revolution Will Be Animated


On this day in economic and financial history ...

The world of film shifted on Nov. 22, 1995. That was the day Toy Story premiered. It was the world's first entirely computer-animated film, and it would mark the beginning of a long and fruitful partnership between Disney (NYS: DIS) , which had supported the production financially, and Pixar, the pioneering animation studio that would later become part of the House of Mouse.

At the time, Pixar was owned by Steve Jobs, founder of Apple (NAS: AAPL) and then-CEO of NeXT Computer. Jobs' control of Pixar would be a point of contention in the Disney negotiations that led to Toy Story.

The Pixar crew had originally planned to produce a half-hour TV special, but Disney film honcho Jeffrey Katzenberg insisted on a feature film during an initial meeting. His terms were extremely high. Katzenberg wanted the rights to Pixar's 3-D animation technology, which Jobs understandably refused. Jobs countered with a deal that allowed Pixar part-ownership of the film's characters, as well as video and sequel rights. However, Disney was in a much stronger position -- Pixar was nearly bankrupt. Jobs and Pixar were forced to cave to a deal that granted Pixar only about 12.5% of the ticket revenues, and nothing further. The deal was signed in mid-1991.

Production was similarly contentious. Numerous rewrites left the film a steaming mess, requiring a completely new script and a brief production shutdown. It was in early 1994 when the new script was approved, and the crew soon ballooned from 24 to 110 people. Toy Story's initial $17 million budget was not going to cut it. As premiere time neared, Jobs' initially underwhelmed attitude changed to excitement as the film came together, and he determined that Pixar would become a public company soon after the film's release.

Toy Story's success was immediate, and it earned virtually unanimous acclaim. The film, released to capitalize on the Thanksgiving holiday, earned $39 million in its first week of release, and remained in first place at the box office for three consecutive weekends. By the end of the year it was the top-grossing film in the country, and it eventually went on to sell $362 million worth of tickets around the world.

Pixar has released 12 more completely computer-animated films since Toy Story made the company a household name. Every single one has managed to earn at least $300 million in global box-office receipts, and the total take for all 13 Pixar films now stands at $7.79 billion.

Roaring '20s
On Nov. 22, 1906, the Dow Jones Industrial Average (INDEX: ^DJI) closed at 95 points. It rarely passed this level for the next 17 years, with a rise over 100 in 1916 quickly erased by a slide back to the 70s. 1923 was the last year of the double-digit Dow for a long time. On Nov. 22, 1923, the Dow closed at 92 points, and the generally indifferent attitudes at the time bore little relation to the wild rise that would soon take place.

Commentary on the market picked up on an unusual barometer -- the price of a seat at the New York Stock Exchange. The New York Times reported that "a confirmed addict to charts" had said that bull markets priced the seats over $90,000, and in bear markets the seats would sell for below $80,000. The sale price of a seat that day was $82,000, indicative of a relatively flat market, perhaps.

A year later, the Dow reached 110 points, a 20% gain. In 1925 it reached 149, then 155 in 1926, 196 in 1927, and 290 in 1928. In five years, the Dow had tripled its value after 17 years of nothing.

Snow problem
Few people enjoy driving in the snow, unless they happen to have a snowmobile. These fun (and occasionally practical) machines were first developed in 1927, when Carl Eliason was granted the world's first snowmobile patent.

Barely more than a motorized toboggan, Eliason's snowmobile became the foundation of a tiny business that would maintain operations until 1964. His basic design, using a liquid-cooled front-mounted engine and a system of tracks, is still common today, although with significant upgrades.

Snowmobile patents are a much larger point of contention today than they were in Eliason's day. Privately held Bombardier Recreational Products sued Arctic Cat (NAS: ACAT) a year ago over infringement of its REV platform. Bombardier, in turn, was sued by Polaris (NYS: PII) earlier this year over suspension-system patents. Everybody wants to freeze their competitors out in this brutally competitive niche.

The winners of niche industries, like snowmobiles, can see their fortunes (and stock prices) soar. The Fool loves this sort of success story, and our analysts have pored through the market to find small stocks with big futures. We've outlined three of these "Middle-Class Millionaire-Makers" in an exclusive free report. All the information you need for another great buy is right at your fingertips -- just click here to learn more, at no cost.

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