PETE'S DRAGON was Disney's first major live action-animation matching since the lackluster BEDKNOBS AND BROOMSTICKS (1973). PETE'S DRAGON was released in 1977 to, at best, mixed reaction. Most critics found this lengthy musical starring Helen Reddy less charming than the earlier released RESCUERS. As the interest in animation began to grow in the Seventies, Disney (and other studios) found itself more and more in competition with Disney's past.

The story follows Pete and his dragon, Elliott, who is usually invisible. Pete's been mistreated by a swamp family and takes refuge with a female lighthouse keeper and her drunken father. As Pete comes to love his new family, the swamp family return, but Elliott helps the lighthouse keeper protect him. A subplot features a phony medicine show salesmen trying to capture Elliott for profit. In the end, Elliott helps get rid of the medicine man, brings the lighthouse keeper's lost boyfriend home and says goodbye to Pete, who now has a real family.

PETE'S DRAGON is extremely similar to WHO FRAMED ROGER RABBIT in that it is basically a live action film with an animated character as a co-star: Elliott. The film had been on the Disney drawing board since the Fifties when it was envisioned as a live action episode for Disney's (then) popular WALT DISNEY PRESENTS TV series. The story had been written by Seton I. Miller and S.S. Field. After Walt's death, a number of properties that had been under consideration while Walt ran the studio, were brought back into production (THE ARISTOCATS and BEDKNOBS AND BROOMSTICKS to name but two of them).

When the film was in its early development stages in the Fifties, it was seen as a psychological drama. It was discussed as a film about a boy (Pete) who had trouble dealing with reality and ventures into a fantasy world where he meets Elliott. Initially, Elliott was not to be seen at all. Later it was decided to have a dream sequence in which Pete and Elliott meet in a frightening, surreal world.

This film would have been an unusual Disney entry for the Seventies, though the premise might be a likely candidate for Disney's Touchstone line. However, once some animation people were brought in to work on the production it began to shift. The first to go was the seriousness of the film. Next, several complained the studio could hardly call it "Pete's Dragon" if the audience only saw the dragon once. They convinced Ron Miller to make the film a live action-animation fantasy.

The next change came when Al Kasha and Joel Hirschhorn were hired to write a song for the film. The pair had previously written Oscar winning songs for THE POSEIDON ADVENTURE and THE TOWERING INFERNO. In fact the key song of PETE'S DRAGON, "Candle on the Water" is a tribute to their first two success. The duo once explained that to make their new Disney endeavor "lucky" they took the elements of the first film (water) and the second film (fire) and put them together for PETE'S DRAGON (candle equals fire, water equals water). It also worked as a metaphor for the lighthouse by the sea.

When this team came on board they stated a single song would be a waste for such a film and convinced the heads that the film could be the next MARY POPPINS. They then proceeded to write a complete score. (When the film was released overseas, all the songs were cut out and the film proved more popular.)

To direct the live action footage, Disney chose Don Chaffey, who had directed such other live action Disney fare as THE THREE LIVES OF THOMASINA, THE PRINCE AND THE PAUPER and RIDE A WILD PONY. Outside of the studio he directed episodes of various TV series including THE PRISONER.

Ken Anderson, one of Disney's nine old men, designed Elliott the dragon and received an "animation art director" credit on the film. Early press releases stated Anderson was also the "animation director." However, the final credit for animation direction went to Don Bluth.

Don was chosen to head up the production which would include a grueling schedule of animating the massive Elliott over the live action frame-blow-ups. This was the same process used for ROGER RABBIT. Don did the first and last drawing of each scene of the animated segments. His crew labored long and hard with countless hours of overtime to meet the deadline.

Adding to the crush of the deadline was the need to hand ink many of the cels in the film instead of just Xeroxing the drawings onto the cels. To help the final artwork match the live action, Don insisted on hand inking of Elliott's stomach and outline in key scenes.

The live-action was plagued with numerous production problems that kept reducing the time for animation. For example, one scene called for (an invisible) Elliott to walk through wet cement. The effect was to be accomplished by having a set of footprints made and covered with a barrier. Then fresh cement was poured over that. The barrier would be removed and the "footprints" would sink into the new cement. In an effort to save time, the crew poured the top layer of cement the night before the shoot. Of course, the cement hardened over night and the entire set-up had to be rescheduled.

Delays in effects made production for the animators even more difficult to finish. However, Don's crew did. The film debuted its first night in a rough print format, without stereo sound. The next night a new, fresh print was delivered, still not in stereo.

The film was met by generally harsh criticism. Though some critics had nice things to say about the animation, few had much else nice to say about the film as a whole. Similar to Richard Williams work on ROGER RABBIT, Don received little real notice in the reviews. (Williams did get a lot of other press attention, though.) Critics were more caught up with either the (lack of) story and acting, or the mere process of the mixing animation and live action.

For example, the Hollywood Reporter seemed more impressed with the creature than the movement. "Ken Anderson's visualization of the knowledgeable but smart, charming and remarkable Elliott is a marvelous mixture of simple complexity, transforming a cartoon concept into an individualistic character of much personality. The animation and special effects also assist the enterprise flawlessly."

"Candle on the Water" did go on to win an Oscar nomination for Best Song.

Bluth workers often look back to PETE'S DRAGON as one of the turning points in Don's decision to go it alone. After all the work and effort put into the film, Don felt his crew received little credit or financial reward from the film. Gary Goldman commented in a studio press release at the time, "I remember towards the end of PETE'S working until 10:00 at night. Not even janitors were here [at the Disney studio]."

After Don had left the studio, he verbalized some of his irritation in an article in the Pasadena Star-News. "Card (Walker, Disney president) had made an impossible deadline because he had already booked the picture into Radio City Music Hall. We worked until 9:00 every night to get the picture finished. The artists got no raises, not even any thanks. Then they read that Card and Ron (Miller, the production head) split $3 billion in bonuses. 'What is this?' the artists asked. I had no answers."

Much like Walt Disney felt burned when his popular Oswald the Lucky Rabbit was taken away from him (causing him to create Mickey Mouse), Don realized to create the films he wanted, he would need total control.