Touchstone Pictures

Background and conception

Due to the increased public assumption that Disney films were aimed at children and families, films produced by Walt Disney Productions began to falter at the box office. This began in 1975 with the release of Escape to Witch Mountain and its 1978 sequel. In late 1979, Walt Disney Productions released The Black Hole, a science-fiction movie that was the studio's first production to receive a PG rating (the company, however, had already distributed via Buena Vista Distribution its first PG-rated film, Take Down, almost a year before the release of The Black Hole).

Over the next few years, Disney experimented with more PG-rated fare, such as the horror-mystery The Watcher in the Woods, the spy-themed comedy Condorman, and the Paramount Pictures co-produced fantasy epic Dragonslayer. With Disney's 1982 slate of PG-rated films, which included the thriller drama Night Crossing and the science-fiction film Tron, the company lost over $27 million. Tron was considered a potential Star Wars-level success by the production company.

In late 1982, Disney vice president of production Tom Wilhite announced that they would produce and release more mature films under a new brand. Wilhite elaborated to The New York Times: "We won't get into horror or exploitive sex, but using a non-Disney name will allow us wider latitude in the maturity of the subject matter and the edge we can add to the humor." He stated that one of the first films that would be released under this new brand was Trenchcoat, a comedy caper starring Margot Kidder and Robert Hays; however, the new brand had not yet been created by the time of the film's release in March 1983, so it was instead released by Walt Disney Productions, but with no production company credited in the released prints.

Disney registered a loss of $33 million in 1983, resulting primarily from such films as the adaptation of Ray Bradbury's horror-fantasy novel Something Wicked This Way Comes, the horror-comedy The Devil and Max Devlin starring Elliott Gould and Bill Cosby, and the dramas Tex and Never Cry Wolf, the latter a PG release that featured male nudity, which did well as the studio downplayed the film's association with the Disney brand. The company nearly went bankrupt when their first PG-rated animated film The Black Cauldron was released.

Early years as Touchstone Films

Touchstone Films was founded by then-Disney CEO Ron W. Miller on February 15, 1984, as a label for their PG films, with an expectation of 3-4 movies released per year under the label. Touchstone Films' first film was Splash, a huge hit that grossed $68 million at the domestic box office that year. Touchstone Films was a brand chosen from over 1,200 potential names; the runner-up name was "Silver Wind". Incoming Disney CEO Michael Eisner and film chief Jeffrey Katzenberg considered renaming the label to "Hollywood Pictures", which went on to become a separate Disney film label on February 1, 1989. The logo is often mistaken as a thunderbolt within a blue sphere. The intent is that the blue ball is actually the "stone", while the yellow marking over it is the streak left behind by the stone's use.

In 1986, Down and Out in Beverly Hills was another early success for Touchstone and was Disney's first R-rated film. It was followed in 1987 by Disney's first PG-13-rated film, Adventures in Babysitting. Disney increased the momentum with additional PG-13 and R-rated films with Ruthless People (1986), Outrageous Fortune (1987), Tin Men (1987), and other top movies. In April 1986, Touchstone films were licensed to Showtime/The Movie Channel for five years, starting in 1987.

Renomination and continued success

Touchstone Films was renamed Touchstone Pictures after the release of Ruthless People in 1986. With Touchstone films, Disney moved to the top of box office receipts, beating out all the other major film studios by 1988. On April 13, 1988, Touchstone became a unit of Walt Disney Pictures under newly appointed president Ricardo Mestres. On October 23, 1990, Disney formed Touchwood Pacific Partners I to supplant the Silver Screen Partners partnership series as their movie studios' primary funding source.

With several production companies getting out of film production or closing shop by December 2, 1988, the Walt Disney Studios announced the formation of the Hollywood Pictures division, which would only share marketing and distribution with Touchstone, to fill the void. Mestres was appointed president of Hollywood. On July 27, 1992, Touchstone agreed to an exclusive, first-look production and distribution agreement with Merchant Ivory Productions for three years.