Dialogue: John Lasseter

The animation guru on the evolution of 3-D technology, creating quality direct-to-DVD titles and the next era of Disney.

John Lasseter has breathed new life into Walt Disney Animation Studios since taking the reins as chief creative officer in 2006. He spoke with The Hollywood Reporter's Alex Ben Block about Pixar and Disney.

The Hollywood Reporter: George Lucas' Industrial Light + Magic recently announced it was going to begin making computer-animated movies, starting with Paramount's "Rango" (2011). How do you view this new competition?
John Lasseter: I'd rather be a member of a healthy industry with a lot of studios making great films than to be the only player in a dead industry.

THR: Disney, like DreamWorks Animation, plans to do most animated movies in digital 3-D. That adds cost and complexity. Why is it worthwhile?
Lasseter: The worlds we create in computer animation are truly three-dimensional. And yet whether it's on film or video or high definition or stills, you're only looking at a two-dimensional version. With the new 3-D, you can actually see what is really in that world.

THR: Before Disney acquired Pixar, there was concern that the Disney direct-to-DVD sequels of "Toy Story" and others would be inferior. Now that you're involved, Disney is still going to make direct-to-DVD movies. How is it different?
Lasseter: To make very successful and entertaining films, you need to do three things really well: You need to tell a story that keeps people on the edge of their seat; you need to populate that story with really memorable and appealing characters; and you must put that story and those characters into a believable world. My philosophy is that quality is the best business plan, and it all starts with a great story, regardless of whether it's released in theaters or goes straight to video. The sequel should be as good or better than the original. When we were making "Toy Story 2," the movies we looked at were "The Godfather: Part II" and "The Empire Strikes Back."

THR: How do you differentiate between what is theatrical and what is direct-to-DVD?
Lasseter: Right now there are two different studios at Disney. The Disney Toon Studios and the Walt Disney Animation Studios. The films that go into theaters come from Walt Disney Animation, and Disney Toon is responsible for direct-to-video. The direct-to-video production is done with a partner, an overseas animation studio. (This year's) "Tinker Bell" was animated in India at a studio in Mumbai.

THR: Is that how you lower the cost?
Lasseter: Yes, but lower cost doesn't mean they should have any worse storytelling. We've really stressed the storytelling and the character development in these. I've worked very hard with the director and writers and story people and held them to a very high standard in the art and the look of it, and they've risen to that challenge.

THR: When Michael Eisner was running Disney, it looked for a time in 2004 and 2005 as if Disney and Pixar would end their business relationship. How did that impact you?
Lasseter: I'll just go back a little bit. We made the deal with Disney to do "Toy Story" (in 1991). Peter Schneider and Tom Schumacher were the leaders of the animation studio, and Tom always gave me amazing input to make the movies better. (Disney) really is the best at marketing these films, and it was exciting to be associated with the company that owned Disneyland and the theme parks. We had done the first deal to do "Toy Story," which was a three-picture deal, but then we renegotiated after the first (picture), after Pixar went public. We renegotiated a 50-50 deal, where we put up half the money and split the revenue coming in. As time went on, Steve (Jobs) and Michael started wanting to renegotiate very early (after the first renegotiation). It was just so natural for us that we would continue this partnership. I wasn't involved in the negotiations, but the negotiations got more and more difficult.

THR: Did the strong personalities of Jobs and Eisner clash?
Lasseter: Yes, it was very frustrating. I guess it was wrapped up in the personalities of the two guys going at it. (Disney was) interested in doing a deal where they would just get the characters from us to produce their own sequels. That's where it really started getting sour. "If you want sequels," we said, "let us do them." But Michael and that group really wanted to do them themselves. When it came to a head, Steve called me and said, "We're going to announce today that we're breaking off negotiations. We're going to start looking for another partner." I love being a part of Disney. I love having our characters in the parks. Knowing they would be taking all of our characters and making sequels with them without us was really one of the worst days of my life. But we rallied together as a group. We moved forward and had meetings with other studios. But then Roy Disney was fired from the (Disney Animation) board, and he started the "Save Disney" campaign. We decided we would wait and see; we had plenty of time. We didn't need to do another deal for a little while. We were already developing "Ratatouille," the first movie beyond the Disney deal. Then they announced Bog Iger was taking over (for Eisner). Bob saw the value of being with Pixar from the beginning. I started to get to know Bob and what a great, honest guy he is. That started the whole working toward the merger of the two companies.

THR: How do you now view Roy Disney?
Lasseter: I love Roy Disney. He has exactly the right view of what Disney animation should be. He has worked with Pixar. He's always been a big, big supporter of mine. I credit him for helping bring in Michael (Eisner) and (former Disney president) Frank Wells in 1984. He helped bring Disney back to its second heyday. He's just a great guy, and he has the passion -- and he always has the right point of view.