What Disney acquiring Pixar means

News Type: none — Tue Jan 24, 2006 11:02 AM EST

business, apple, opinion, ipod, itunes, disney, drm, macbook, pixar, all-in-one-hdtv

It's all over but the paper signing. Business Week says that Disney's board has approved its takeover of Pixar, which will make Steve Jobs the largest stockholder of Disney as a side effect. This sounds like a simple merger and acquisition story, but it actually reshapes the tech and TV businesses. How? Here's our view of what this deal really means:

Disney regains its crown as an animation powerhouse. No studio has ever achieved six blockbuster movie hits in a row before Pixar. With Pixar on board, Disney can now add Monster's Inc. and Toy Story to its existing stable of classic movies such as Snow White and Beauty and the Beast.
Apple gains a gold-plated Fortune 100 customer. Expect Disney to start becoming the biggest buyer of Apple MacBooks and PowerMacs in the country. Why? Imagine being in a board meeting with Steve Jobs, watching the largest shareholder pull out his MacBook to take notes while you pull out your Dell. At least some board members will decide they need a new laptop. And once executives in the boardroom start using Macs, it won't be long before Apples are on the approved computer list.
iTunes garners access to serious video content. The trickle of iTunes TV shows that started with Desperate Housewives and Lost will grow to a flood this year as new iTunes revenue turns skeptics to converts. As Apple begins creating its own on-demand TV network, Disney will rapidly become the preferred distribution studio because of its deep connection to iTunes.
Apple gets serious influence in Hollywood. Unlike when Steve Jobs negotiated for rights to distribute music as an outsider, Jobs will now be a peer in Hollywood. When Jobs weighs in on anything from next-generation DVD formats to digital rights management technology, he'll now be able to drive deals and standards that an outsider never would be able to pull off.

With Jobs and Disney CEO Robert Iger joined at the hip, the days when Hollywood could just stonewall a new technology like iPods or dictate distribution terms for movies are over. Steve Jobs' relationship with Disney is now a trump card in his hand. For players in both Silicon Valley and Hollywood, that means it's now a whole different game.

40 Votes
Enjoy this article? Help vote it up the 'Vine.

Published to:

Carl Howe's Column, All of Newsvine
Groups: none
Regions: none

Public Discussion (14)

What's this?

Who's leading the conversation?

This visualization below allows you to see the impact that each user has on the current conversation. The top row contains the group of users who have had the most impact, the 2nd row the group of users who have had the 2nd most impact (et cetera). Users with similar impact are grouped together, and the average score of the group is shown to the left of the group. The author of the article is also shown on the left, in their corresponding group. Each user's score is based on the number of comments the user has made plus the number of votes their comments have received. The scores are calculated relative one another, so while their absolute value is not particularly important, their relative difference does indicate a larger difference in impact on the conversation.

1.0

0.5

{"commentId":12681,"authorDomain":"faruk"}

Faruk Ates

Interesting point of view, for sure. And it would be mighty interesting if this deal does indeed go through and we enter the described situation.

I do so love these interesting times. :-)

{"commentId":12681,"threadId":"32278","contentId":"68819","authorDomain":"faruk"}

#1 - Tue Jan 24, 2006 11:27 AM EST

{"commentId":12721,"authorDomain":"kgosser"}

Kris Gosser

I don't think the public realizes how huge the fact that Steve Jobs is essentially Disney's boss now. He's going to turn everything Disney into sub-culture coveting - much like it is with the iPod, etc. You can expect ABC, ESPN, and the rest of Disney's empire to be better than ever in a couple years.

{"commentId":12721,"threadId":"32278","contentId":"68819","authorDomain":"kgosser"}

#2 - Tue Jan 24, 2006 12:37 PM EST

{"commentId":12750,"authorDomain":"brentb"}

BrentB

Well now we will probably have to wait until Disney Expo 2007, that will run a week after MacWorld, just to see Steve Jobs introduce the new movies Disney has in store for the next year. They will probably be faster and smaller then previous Disney movies.

{"commentId":12750,"threadId":"32278","contentId":"68819","authorDomain":"brentb"}

#3 - Tue Jan 24, 2006 1:30 PM EST

{"commentId":12764,"authorDomain":"nebulaclash"}

NebulaClash

Slow down thar, pardners, things might not go quite as quickly as we are speculating. To whit:

How does Team Disney react to their "takeover" by Pixar? I've read that John Lassiter will become head of animation, and that makes sense. But what does the Disney board decide to make first: "Toy Story 17 1/2: This Time It's Personal (direct to video, and starring the vocal talents of Joey Lawrence and Raven Simone)" or the next original idea from Pixar? If the former, all that Pixar talent will be wasted. If the latter, Disney gets a big boost in its product. Now the answer may seem obvious to us, but never underestimate the power of a huge company to make a bad decision just because they are used to it.
Look at how Disney whores its wares now. Watch the Disney Channel and you'll see the comedy episode (on it's 119th repeat) being interrupted by a commercial for Disneyworld, being interrupted by a "great behind the scenes look at Radio Disney," followed by an "insider's exclusive" at the latest video from Hillary Duff, followed by a reminder of the new Disney Movie "18 Kids is Not Nearly Enough, Part 3" at your local theaters RIGHT NOW, followed by the comedy show again. If Pixar product gets that treatment, watch its exclusivity spiral downward into the morass of mediocrity. "Hey kids, Woody here, with a great behind the scenes look at the cool new Hillary Duff video!"
"Hello head of CBS? Steve Jobs here. Yeah, fine, how you doing, how's the kids? Great, great. Listen, I want to get more CBS shows on iTunes -- huh? What do you mean? Well, yeah, OK, I guess we are rivals now that I'm on the Disney board and Disney owns ABC, but I really run Apple. Huh? Hey wait! Hello....hello?"

{"commentId":12764,"threadId":"32278","contentId":"68819","authorDomain":"nebulaclash"}

#4 - Tue Jan 24, 2006 2:05 PM EST

{"commentId":12809,"authorDomain":"schontz"}

David S

Expect Disney to start becoming the biggest buyer of Apple MacBooks and PowerMacs in the country.

Um. Yea, that point didn't hold at all.

{"commentId":12809,"threadId":"32278","contentId":"68819","authorDomain":"schontz"}

#5 - Tue Jan 24, 2006 3:34 PM EST

{"commentId":12869,"authorDomain":"kgosser"}

Kris Gosser

I think he was trying to make a point that Jobs will influence the intigration of Disney and Apple, and Apple and Disney, if you see what I'm saying.

{"commentId":12869,"threadId":"32278","contentId":"68819","authorDomain":"kgosser"}

#6 - Tue Jan 24, 2006 5:04 PM EST

{"commentId":12872,"authorDomain":"igotimac"}

Jacob

Somebody needs to point out what happened when Apple bought NeXT...
(Jobs was the CEO of NeXT at the time)

Does anybody remember what happened?
Apple's board kicked out it's current CEO. Then Jobs became interim-CEO. And now jobs is the CEO.
Most people would now say that NeXT bought Apple.

So, did Pixar just buy Disney? maybe so...

{"commentId":12872,"threadId":"32278","contentId":"68819","authorDomain":"igotimac"}

#7 - Tue Jan 24, 2006 5:12 PM EST

{"commentId":12913,"authorDomain":"faruk"}

Faruk Ates

Jacob: there's a different situation than with the Apple/NeXT deal, though.

Apple used to be run by Jobs, then he left and started NeXT, then Apple realized that they were doing pretty damn bad without Jobs, and that Jobs, albeit not commercially successful, did manage to create incredibly cool things (such as the machine on which Tim Berners-Lee invented the World Wide Web).

When Apple bought NeXT again, they wanted their old genius back in-house.

Jobs has never been part of Disney in any similar fashion. Pixar isn't bought by Disney for the same reasons Apple bought NeXT, although they do share overlap (Pixar having genius quality, and Disney being in need of that — that much is similar).

Point in case, Jobs may now get a vote on the goings-on of Disney, it doesn't mean he's their new CEO. That's still Robert Iger, and I seriously doubt he's going to give his position to Jobs. Better yet, I don't even know if Jobs would want it.

{"commentId":12913,"threadId":"32278","contentId":"68819","authorDomain":"faruk"}

#8 - Tue Jan 24, 2006 6:41 PM EST

{"commentId":13082,"authorDomain":"firen"}

firen

At first i was a little shocked because i thought Jobs didn't have a very good relationship with Disney, that's why they broke of their little deal...and then this happens. Shocked i tell you SHOCKED!

Very interesting points by the way.

{"commentId":13082,"threadId":"32278","contentId":"68819","authorDomain":"firen"}

#9 - Wed Jan 25, 2006 2:12 AM EST

{"commentId":13155,"authorDomain":"leandromp"}

Leandro

The future is about content and Disney is all about content, not gadgets. What is positive about the acquisition is that Apple will have the gadgets but Disney will provide good content to watch, see, read or hear with the gadget...

{"commentId":13155,"threadId":"32278","contentId":"68819","authorDomain":"leandromp"}

#10 - Wed Jan 25, 2006 8:58 AM EST

{"commentId":13174,"authorDomain":"neonlaundry"}

neonlaundry

I believe any sturdy cushion Jobs can rear himself with will have a positive outcome. Now having, aside from the monetary aspect, an empire of other resources I can't wait to see what the Empire Apple will bring. Having unopposed access to broadcasting, more animation, film, and recreational Activities (yeah, Disney boasts nine theme parks worldwide) one must remember the million other souls dedicated to marketing these products to us and what pushing power it gives the crew in Cupertino. And, think about, the billion souls owning the products we're being marketed. Once Jobs is able to hedge this group with a tinge of Appleness he'll be on his way to unstoppable (if he isn't at the moment). Heil Steven! Long live Jobs.

{"commentId":13174,"threadId":"32278","contentId":"68819","authorDomain":"neonlaundry"}

#11 - Wed Jan 25, 2006 9:45 AM EST

{"commentId":13176,"authorDomain":"stuartallen"}

Stuart Allen

"but Disney will provide good content to watch, see, read or hear with the gadget..."

you are talking about Disney right?

The best thing that could come out of all this... ESPN partnering with Apple. nuff said.

{"commentId":13176,"threadId":"32278","contentId":"68819","authorDomain":"stuartallen"}

#12 - Wed Jan 25, 2006 9:51 AM EST

{"commentId":13746,"authorDomain":"timwhitman"}

Tim Whitman

If Pixar equals the shot in the arm that Disney needs to wake up from its long slumber - great!

If somehow Jobs' influence on the board means Disney begins buying up Mac products (after all it is the corporate market where Apple is really, really far behind) - great!

But, when I saw the headline, my gut reaction was that we just lost Pixar to the mediocre content churn that has become Disney. If we see any Pixar property release a sequel straight to home video - we'll know Lasseter's been snipped.

{"commentId":13746,"threadId":"32278","contentId":"68819","authorDomain":"timwhitman"}

#13 - Thu Jan 26, 2006 9:25 AM EST

{"commentId":15222,"authorDomain":"blackfriars"}

Carl Howe

I''m with you guys. There are a bunch of ways Disney could screw this up, particularly if they cut out John Lasseter or Ed Catmull from the action -- they really are the heart and soul of Pixar. But they are the guys with the unbeatable track records, not Disney. I expect the Disney crew will treat them with respect. And remember, with Jobs sitting on the board and being the largest stockholder, he can make a big stink if Disney goes in the wrong direction. And we know he isn''t afraid to do things like that.

I believe, by the way, is one of the best things that Disney could do is to transfer all its animation staff to the new Pixar headquarters up at Emeryville, CA (click on the title of the post for the link to the Pixar tour pictures), and let Pixar continue running as a division of Disney. That facility was built for creative animators (have you heard about the original concept of only one bathroom for the entire building to ensure people interacted?), and I think it would do wonders for boosting Disney animation morale as well as keeping the Pixar magic alive. If they do that, watch out. It ain''t going to be your father''s Disney any more -- and it will be a lot more like when Walt was running the place.

As an aside, Walt Disney was always considered to be a tyrant in business. Maybe Jobs is just Walt coming back to haunt the place.

Again, thanks for all the thoughts,
Carl

{"commentId":15222,"threadId":"32278","contentId":"68819","authorDomain":"blackfriars"}

#14 - Sat Jan 28, 2006 8:48 AM EST

{"canLink":false,"threadId":"32278","isPrivate":false}

CARL HOWE

Backyard

What Disney acquiring Pixar means

Published to:

FUN STUFF:

COMPANY STUFF:

LEGAL STUFF: