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Disney Buys Pixar... The End of Good Animated Movies?

From the It-takes-more-than-cool-technology dept.

Disney Announces Pixar Purchase

Jan. 24, 2006 -- The Walt Disney Company took a big step today toward bolstering its position in the film business. It has agreed to purchase Pixar Animation Studios for $7.4 billion. The deal combines Pixar with Disney's animation unit and represents the union of two huge forces in animation, from the old world of films and the new.

This would be bad, bad, bad news for both companies except for two tidbits:

Pixar CEO Steve Jobs will become Disney's largest shareholder, giving him an extraordinary position at the confluence of technology and entertainment, computers and film, as well as a commanding presence in the music industry through Apple's iTunes Music Store. Jobs will also be appointed to Disney's Board of Directors.

For Disney, and its new CEO Robert Iger, the deal secures what has been a hugely valuable source of animated hits.

The purchase is an all stock deal in which 2.3 Disney shares will be issued for each Pixar share. The sale is expected to completed by this summer.

And the biggie:

The combined company is expected to maintain the basic working structure that Disney and Pixar used before, with Disney providing distribution and co-financing for Pixar's computer-animated features.
That would be a good idea.

Perhaps Iger can do a better job than Eisner at managing the animation works at Disney.

In a way you can't "buy" Pixar. Sure they have mountains of physical assets and tons of proprietary software but Pixar is not a technology company... It is a group of artists. It is a culture that fosters creativity and excellence. Disney would be well served leaving them basically untouched. -- If Disney could produce an animated film in the last 20 or so years, they would not have needed Pixar.

The Jobs thing is a wildcard. He clearly sees that media is bigger than hardware. The one thing he does is bring some vision to a company that was founded on the vision of Walt, but -frankly- has had no vision for decades.

As a long time Disney watcher, Disney had lost focus on the consumer and Jobs will be sure to mention that to them any time they forget.

In related news....

WB, UPN Networks to Merge, Creating CW Television Jan. 24 (Bloomberg) -- CBS Corp. and Time Warner Inc. agreed to combine the unprofitable UPN and WB television networks, seeking to create a stronger competitor to the top four broadcasters after struggling to draw audiences on their own.

CW Television Network will begin airing in September as the fifth-largest broadcaster by viewers. CBS, owner of UPN, and Time Warner, part owner of WB, will each own 50 percent, the companies said today at a press conference in New York. Tribune Co. gives up a holding in WB in return for an affiliate agreement.

Apparently today was media consolidation day. I wonder if Kevin will buy out Instapundit or something?


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Comments (24)

Nuts. I was so looking forw... (Below threshold)

Nuts. I was so looking forward to watching Disney tank once Pixar struck out on their own and kicked their butts in the animated movie business. Was also looking forward to seeing how Pixar would do on their own.

As for UPN and the WB, well, guess us snubbed Angel fans will just have to switch our ban of the WB to a ban of this new CW. Glad to hear the WB was doing so poorly. I predict the merge won't save them. They'll be tanking again in a few years.

I'm hopeful as well. You'r... (Below threshold)

I'm hopeful as well. You're right about Disney losing it's visioneering spirit, which is Jobs strength. They've made a good team so far, this simply puts on paper what has happened in reality. But then, that in and of itself can cause the end of a good thing. (No, I'm not thinking of marriage!) lol, thanks for your post, Lyn from Bloggin' Outloud

Could the programs on WB be... (Below threshold)

Could the programs on WB be ANY worse? I mean, if an advertiser is going after the 18-34 Unemployed Moron demographic, it's a jackpot. But those people generally don't have a lot of disposable income.

Same reason the truck driving schools advertise in the middle of the day, when everyone else is at work while the somewhat less-than-ambitious lay on the couch and watch TV.

Don't discount John Lassete... (Below threshold)

Don't discount John Lasseter, the other wild card in this mix. He is a former Disney animator who ran Pixar's creative department. Last I heard (I think it was in a NY Times story yesterday) he was going to take a key role in running the creative department still. That could mean a Pixar-ifying of Disney, rather than the other way around (or perhaps more accurately, a re-Disney-ifying).

Steve Jobs is now the kingm... (Below threshold)

Steve Jobs is now the kingmaker at Disney?

I wonder how Bill Gates is feeling right now?

And what with all the key P... (Below threshold)

And what with all the key Pixar figures who are now taking up key spots at Disney, I'm wondering who really bought who. *g*

I agree with Brant.<p... (Below threshold)

I agree with Brant.

Jon Lasseter is the number one animation creator in the world. He has earned tens of billions of dollars for both Pixar and Disney who used to distribute Pixar movies.

He is so respected in the industry that I could see Disney buying Pixar just to get the services of Lasseter.

Hmmm.As long as Jo... (Below threshold)


As long as Jobs doesn't have any influence whatsoever this might work out. If Jobs does have any influence, it'll turn into crap.

Most people don't realise that it was Steve Jobs that tried to kill the Macintosh. As for the iPod, does anyone really think he had anything to do with that? And remember that hugely expensive magnesium cube the Mach computer? That didn't have either a fan or a harddrive because Steve Jobs hates things that make noise? Instead the Mach had a very very very ssssllllloooooowwwww optical drive. It says a lot about the engineering of a computer when the fricking *case* costs a third of the price of the computer.

Then there's the Mac cube, i.e. the toaster. No fan, remember that thing about Jobs and noise, and a plastic case. Can you say cracks?

God help them at Disney.

Disney did have some import... (Below threshold)
Half Canadian:

Disney did have some important animated films in the early 90s. It was when Katzenberger left that the place went to pot.

Jon Lasseter is arguably more important than Jobs. He's the creative genius behind Pixar. It's the story that's important, not the pictures. Pixar has just been doing both well.

Now, Disney did provide some crucial guidance for the first Toy Story, but Pixar certainly has been beating Disney in the story telling department.

WOW-As long as ... (Below threshold)


As long as Jobs doesn't have any influence whatsoever this might work out. If Jobs does have any influence, it'll turn into crap.

Sure- Because Jobs has never done anything sucessful... He's got such a poor track record. (rolls eyes)

Most people don't realise that it was Steve Jobs that tried to kill the Macintosh. As for the iPod, does anyone really think he had anything to do with that?

I have a new rule for commenters on my thread. You must put down the bong before you post.

Jobs tried to kill the Macintosh... Man the browines must have been good in the 60's huh?


CW?Sounds like it ... (Below threshold)


Sounds like it would be a Country Western Channel or something.

Or maybe: "The Conventional... (Below threshold)

Or maybe: "The Conventional Wisdom?" Inquiring minds want to know....

What really struck me as fu... (Below threshold)

What really struck me as funny was when Disney bagged their hand-drawn animation unit a couple years ago, figuring that only computer-animated films, like Pixars, could make money. They so totally missed the boat! The problem wasn't the technology, but the horrible story-telling — or more to the point, the lack of stories because Disney was too busy trying to milk their "properties" rather than entertain people. Lest we forget, Brad Bird made Iron Giant (hand-drawn animation) before he made The Incredibles (computer), and both were excellent films.

In my not particularly humb... (Below threshold)

In my not particularly humble opinion, Disney would also be wise to take a closer look at the mega-award-winning "Spirited Away," which they dubbed the English for but whose complex themes and exquisite images seem to have gone over their heads; this movie, and others by animation genius Hayao Miyazaki, show how far animation can go beyond cute critters and simplistic storylines.

(is currently watching everything Miyazaki ever made)

Can you think of any exampl... (Below threshold)

Can you think of any example in which a large company absorbed a smaller competitor and the smaller company's culture, product design approach, or products were dominant in the resulting company? Or even survived?

I can think of dozens of examples in which, once the larger company had acquired the smaller, the products, culture, and approach of the smaller company were squashed. But not one example of the other way around.

Dave, it doesn't quite fit ... (Below threshold)
Jay Tea:

Dave, it doesn't quite fit your criteria, but the AOL-TimeWarner merger certainly was an oddball...

But as a drone for a company that is currently being assimilated into the collective that bought us, I can't really argue your point.


Cribbed the idea form the /... (Below threshold)

Cribbed the idea form the /. discussion the other day, but...

If Pixar's influence, style and people begin to take over Disney, it'll be more like Pixar bought Disney for -7.4 billion... the greatest deal in history.

[email protected] Paul<... (Below threshold)


@ Paul

Jobs tried to kill the Macintosh... Man the browines must have been good in the 60's huh?

Paul usually I rather like you. But you've got your head up your ass on this one. I've been working the computer field for over 26+ years now and I know what I'm talking about.

Google is your friend

In fact Jobs hated the Macintosh and preferred the Apple Lisa.

Next time you want to post a smart-ass response, know what the hell you're talking about first.

keep googling ed. ... (Below threshold)

keep googling ed.

Multiple people came out and said that was BS.

Raskin tried to claim the Mac was all his doing. Sucess usually has 1000 fathers.

Raskin and Jobs have hated each other since the begining... Is it any wonder he now claims the Mac was his and Jobs wanted to kill it? Last week I had someone tell me Jobs wanted to kill the iPod too. It's just amazing Apple has managed to grow so large dispite Jobs' best efforts. Whatever.

BTW- I've been in the business a few years myself. ;-)

I had a student who worked ... (Below threshold)

I had a student who worked at Disney in Burbank. One day he was inspecting electrical circuits and switches when he flipped a switch that a previous employee had mislabeled. That sent Eisner to the basement in the elevator he was riding on. This totaly ruined Eisners lunch hour. Eisner said, "Find out who did that and fire him".

Disney will probably be a much better company without Eisner.

Of course, there's the poss... (Below threshold)

Of course, there's the possibility that this could all end well for everyone. The *slim* possibility.

One thing that strikes me is that Pixar held out in a serious way to make sure that the Pixar DVDs were well-made and feature-packed. At the time Buena Vista was distributing the Disney classics as lackluster featureless poor-quality and generally-shitty DVDs. They had poor transfers and special features like "Chapter Selections", "Cast & Crew Bios", and "Previews of Other Crappy DVDs".

Pixar made sure that Toy Story and A Bug's Life were top-notch full-blown DVD productions, and B-V finally saw the light (and dollar signs) of well-made DVDs.

Pixar can't hold out like that any more.

Oh, and I'd like to mention... (Below threshold)

Oh, and I'd like to mention that it's good to see that CBS is getting back into the network television business...

As a follow-up to my earlie... (Below threshold)

As a follow-up to my earlier comment, perhaps all is not gloom and doom:

Lasseter is playing a big role in post merger Disney. Heck, he's even going to be overseeing WDI (which might mean some better theme parks). And they are putting other key people from Pixar in high places.

I do, however, temper my optimism for Disney's future with what Dave said - it generally is VERY hard to export culture from a small purchased company into the larger purchasing company. For that matter, big is almost always bad to begin with - part of Pixar's success is that they were small and nimble enough to make movies they were passionate about.

And as far as the Jobs-hatred goes - anyone who's talentlessly, accidentally bumbled their way into a several BILLION dollar deal on the company they ran in their spare time can feel free to criticize his ineptness. (and thats his personal take home, as he owned a huge chunk of Pixar)

Paul, that was me about the... (Below threshold)

Paul, that was me about the iPod story. Jobs did indeed, not like the iPod, but gave the supporters a chance. He later admitted he was wrong on it. He initially thought it was just another PDA and he notoriously dislikes PDAs after the Newton experience.

I don't think it was the Mac he tried to kill, but he did kill the effort to allow other manufacturers to build Mac clones. That may have kept the Mac "Apple Pure" but it pretty much killed any chance for large market share gains. Remember, he had to ask Bill G for money to keep Apple afloat after his return.

In terms of true computer commercial success Apple has stayed in the market but has seldom exceeded more than 5% market share. What Apple does better than most is innovate--but that doesn't lead to market success in all cases. Innovation is important in the industry but it is only one aspect.

From insiders I know at Apple Jobs has the following reputation: 1) When he believes in something he sells it like nobody's business and is one incredible salesman, 2) His first instinct when subordinates pitch new ideas is to rip them to shreds about how the idea is stupid, 3) Comes back some time later with the same idea as if he has thought of it...but rewards the person who made the original pitch. This has PO'd a number of employees over the years--If you have ever heard one of his "motivation" speeches he often uses his little catch phrase of "A good artist copies, a great artist steals" which is ironic considering how quick he is to sling lawyers when he perceives an infringement.

Like it or not the Cube was a disaster and one of Jobs babies. NeXT also did squat against Sun, though, again, he innovated some good things at NeXT--but it was not a commercial success.






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