More Post Nuptial Thoughts on Disney and Pixar
Got some nice e-mails from my February 15 blog on Disney’s acquisition of Pixar. One reader wrote: “Well, as a single company, I agree that these traits will not work together unless a Chinese wall is built. Separately, they both leveraged each other's strengths. One thing is for sure: If Disney's product iteration practices of milking every product line for what it is worth prevails, it will kill everything that made Pixar successful.” Nicely put, though if a Chinese wall is built, what was the purpose of buying Pixar rather than simply renewing the partnership?
Ostensibly, one of the big rationales for buying Pixar was to have Pixar people teach Disney people how to do animation right. But one reader with an inside scoop into Pixar wrote me this reality flash: “Pixar wunderkinds Catmull and Lasseter and their teams were already overworked at Pixar, and now they’re expected to manage unfamiliar Disney businesses and make great films too?” Interesting point. These guys aren’t bionic.
Some readers wrote that Steve Jobs will spur the necessary revolution at Disney. Frankly, I don't expect magic from Steve Jobs. . Jobs can create disruption when he’s in control. At Disney, he may on the board of directors, and he may be the largest individual shareholder, but his role will be far more infrequent and passive than it’s been at Pixar (or Apple). He won’t play a hands-on role either strategically or operationally. Hopefully he won’t turn into a Ted Turner, whose “largest individual shareholder” status at AOL Time Warner was pretty worthless in terms of impact.
Maybe we ought to forget Jobs and look at Disney CEO Bob Iger. He’s the one that will ultimately influence whether Disney learns from Pixar, or simply devours it. One reader, an executive in the media business familiar with Disney, wrote: “Iger, being far less of a control freak than Eisner, may just see and implement the wisdom of not allowing the cat in mouse's clothing to eat the mouse that's been purring at the box office.” We'll see if good intentions play out in practice.
My favorite response came from my 10 year old son. He went to his room, did his own research and e-mailed me a link to a great article written by Catlin Moran in the May 6, 2005 issue of the London Times (http://www.timesonline.co.uk/article/0,,7-1599218,00.html) . Remember the old Muppets TV show in the ‘70’s and ‘80’s and all the famous celebrities appearing on it? My son loves the old re-runs, but says the Muppets today aren’t nearly as funny. He’s not interested in today’s Muppets. Caitlin Moran explains why. The show used to have, in her words, “a genuine air of hippy joy, anarchy and inventiveness.” Then, years after it ended, Disney bought the Muppets in 2004. Since then, Disney has rolled out The Muppets Wizard of Oz made-for-TV movie that is noteworthy for its loud brassy special effects, wisecracks, cheap gags and its deviation from the gentle innocent humor of the original. My son complains that he can’t even relate to the characters like Gonzo and Miss Piggy any more. Further, according to Moran, “the problem is that Disney tends to think of its intellectual properties in terms of merchandising opportunities”, which explains why products like Muppet ring tones and screen savers were prepared before any actual film was. Do you get what’s going on, and why I worry about the fate of Pixar?
When it’s all said and done, will Disney shareholders benefit from this deal? In the short run, conceivably yes. It wasn’t a huge acquisition, it was all in stock, the parties knew each other pretty well, and most important, Disney animation was stuck in such a mediocre place that snaring Pixar was a coup. But, in the long term, my suspicion is that a multi billion Disney will not readily be changed by a tiny company filled with irreverent crazies who live and work hundreds of miles north of the hungry corporate beast. I hope I’m wrong, for the sake of all the parents, kids and investors who loved Pixar (my family is in all three categories). But if I’m right, expect the Pixar acquisition to have negligible impact on Disney stock, and look for another little iconoclastic animation company to create the next wave of breakthroughs.
Ostensibly, one of the big rationales for buying Pixar was to have Pixar people teach Disney people how to do animation right. But one reader with an inside scoop into Pixar wrote me this reality flash: “Pixar wunderkinds Catmull and Lasseter and their teams were already overworked at Pixar, and now they’re expected to manage unfamiliar Disney businesses and make great films too?” Interesting point. These guys aren’t bionic.
Some readers wrote that Steve Jobs will spur the necessary revolution at Disney. Frankly, I don't expect magic from Steve Jobs. . Jobs can create disruption when he’s in control. At Disney, he may on the board of directors, and he may be the largest individual shareholder, but his role will be far more infrequent and passive than it’s been at Pixar (or Apple). He won’t play a hands-on role either strategically or operationally. Hopefully he won’t turn into a Ted Turner, whose “largest individual shareholder” status at AOL Time Warner was pretty worthless in terms of impact.
Maybe we ought to forget Jobs and look at Disney CEO Bob Iger. He’s the one that will ultimately influence whether Disney learns from Pixar, or simply devours it. One reader, an executive in the media business familiar with Disney, wrote: “Iger, being far less of a control freak than Eisner, may just see and implement the wisdom of not allowing the cat in mouse's clothing to eat the mouse that's been purring at the box office.” We'll see if good intentions play out in practice.
My favorite response came from my 10 year old son. He went to his room, did his own research and e-mailed me a link to a great article written by Catlin Moran in the May 6, 2005 issue of the London Times (http://www.timesonline.co.uk/article/0,,7-1599218,00.html) . Remember the old Muppets TV show in the ‘70’s and ‘80’s and all the famous celebrities appearing on it? My son loves the old re-runs, but says the Muppets today aren’t nearly as funny. He’s not interested in today’s Muppets. Caitlin Moran explains why. The show used to have, in her words, “a genuine air of hippy joy, anarchy and inventiveness.” Then, years after it ended, Disney bought the Muppets in 2004. Since then, Disney has rolled out The Muppets Wizard of Oz made-for-TV movie that is noteworthy for its loud brassy special effects, wisecracks, cheap gags and its deviation from the gentle innocent humor of the original. My son complains that he can’t even relate to the characters like Gonzo and Miss Piggy any more. Further, according to Moran, “the problem is that Disney tends to think of its intellectual properties in terms of merchandising opportunities”, which explains why products like Muppet ring tones and screen savers were prepared before any actual film was. Do you get what’s going on, and why I worry about the fate of Pixar?
When it’s all said and done, will Disney shareholders benefit from this deal? In the short run, conceivably yes. It wasn’t a huge acquisition, it was all in stock, the parties knew each other pretty well, and most important, Disney animation was stuck in such a mediocre place that snaring Pixar was a coup. But, in the long term, my suspicion is that a multi billion Disney will not readily be changed by a tiny company filled with irreverent crazies who live and work hundreds of miles north of the hungry corporate beast. I hope I’m wrong, for the sake of all the parents, kids and investors who loved Pixar (my family is in all three categories). But if I’m right, expect the Pixar acquisition to have negligible impact on Disney stock, and look for another little iconoclastic animation company to create the next wave of breakthroughs.
posted by Oren Harari at 12:48 PM
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