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Could cashing in on Pixar now be a whole lot harder than Disney officials had originally thought ?

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Could cashing in on Pixar now be a whole lot harder than Disney officials had originally thought ?

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It was a year ago today that newspapers around the world featured the headline: "Disney Buys Pixar." With articles trumpeting the $7.4 billion the Mouse was about to pay out in order to acquire Pixar Animation Studios.

Oh, sure. There were a few of us out there who squawked about that ginormous price tag. But virtually everyone else -- from Bob Iger on down -- seemed convinced that the Walt Disney Company was going to make big, big dough off of this acquisition. That by adding these super-popular Pixar pictures to the studio's film library, by folding those already beloved characters into Disney's established roster of cartoon stars ... Mickey was basically acquiring a license to print money.

Well, that was then, folks. And this is now. And given Disney's Brand Management office has just completed an extensive study that reportedly shows that a number of Pixar's film franchises have already seriously eroded in value ... Well, it may now take the Mouse a whole lot longer to recover the initial costs of the Pixar acquisition.

What exactly is the problem? According to several company insiders that I've spoken with, this Brand Management study supposedly targeted several key age brackets, chief among them kids. And what these Disney officials allegedly learned is that -- with the exception of the characters from "Cars" (I.E. Pixar's most recent release) as well as the two "Toy Story" films -- the rest of the Pixar characters are already rapidly declining in popularity among children.

Copyright Disney / Pixar

To explain: Many of the study's participants reportedly dismissed the characters from "A Bug's Life," "Monsters, Inc.," "The Incredibles" and "Finding Nemo" as being "just kid's stuff." Meaning that -- as the original audience for this particular Pixar pictures continues to grow older -- these four film franchises are going to lose much of the initial appeal that they held with consumers.

And given that the Walt Disney Company had been planning on aggressively licensing all of the Pixar characters in order to help recover the corporation's $7.4 billion investment ... The news that at least four of these film franchises will probably underperform was not received warmly in the Team Disney Burbank building.

Which is why Mouse House officials are now looking into ways to reinvigorate the "A Bug's Life," "Monsters, Inc.," "The Incredibles" and "Finding Nemo" franchises. And among the ideas that are supposedly being considered is creating new three dimensional versions of these particular Pixar pictures by making use of the Disney Digital 3-D process.

The only problem with that plan is that the last animated feature to be repurposed in this manner -- "Tim Burton's The Nightmare Before Christmas" -- absolutely bombed at the box office. The new 3D version of this Henry Selick film only earned $8.7 million during its entire domestic release. Which didn't even come close to covering the cost of creating & then promoting the new Disney Digital 3-D version of this 1993 release.

Copyright Disney / Pixar

One of the other ideas that's supposedly being floated is asking Pixar to produce sequels to these particular pictures. Which would then -- in theory -- reinvigorate the "A Bug's Life," "Monsters, Inc.," " The Incredibles" and "Finding Nemo" franchises. But given that John Lasseter has been quite vocal on the whole "No more unnecessary sequels" issue (Which is why Disney officials feel lucky that "Toy Story 3" is allegedly already in the works for 2009) ... Well, it's extremely doubtful that John & Ed Catmull would ever go for that idea.

Then -- when you factor in Disney Consumer Products' reported concerns about "Ratatouille," plus the rumors that are already begun circulating about "Wall E' (EX: That Andrew Stanton's movie about robots in love will supposedly be in super wide format and feature little or no dialogue) ... Well, it's now beginning to look like it's going to take the Walt Disney Company a whole lot longer than it originally planned to recover that $7.4 billion the corporation originally paid out to acquire Pixar. Never mind finally beginning to turn a profit on this deal.

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  • Jim, I love your site and I find your stories incredibly informative.  With that said, your version of the "I told you so" is getting slightly overplayed.   Any longtime reader will know that JIM HILL THINKS THAT DISNEY GROSSLY OVERPAID FOR PIXAR.  Now we're getting to expect that you will exploit any bit of information to that respect in order to prove it.  

    I realize that you get more hits when you bash the Disney/Pixar decision but maybe if you started giving us more interesting insights into what the company has in store for the future, or any of the other incredibly exciting things happening within the company— the hits might also spike.  That's why I started reading your site religiously every day.   As a writer, you seem to have become obsessed with proving to your readers that you were right all along.  But to that end, most of us who believe in the merger will not change our opinions that the LONG-TERM POSITIVE OUTCOME will far out-weigh the negative SHORT-TERM misgivings.  

    Granted, most of us do not have as much insight into the Disney company as you, which is why we love your site so much.  However, it seems as if you're becoming one of those negative Disney diehards that you seem to be so much against.  

    "If you look for the bad in people expecting to find it, you surely will"  Abraham Lincoln (and Pollyanna).  

  • Well sure kids who were kids when Monsters Inc came out may not be falling over themselves in love with the film now days...opting for PG-13 fare.  But the great thing about kids...is that there are always new ones...yes its true.  As the young ones graduate from the Tea Cups to the Matterhorn, there are new young ones to take their places....

    All the kids that enjoyed the princess films when they came out.....many are now grandparents (the Snow, Cindy and Sleepy Beauty age of course)....yet the princesses still endure...huh i wonder why....

    I don't see the problem..

  • Sure that figure for NBX looks low, but it was such a limited release. What did they expect? Theaters have not embraced the digital future so there were not a whole lot of outlets to show NBX in 3D. It was only showing in about 5 theaters within a 500 mile radius of me and I live in central Texas. So I do not think transfering these into 3D should be overlooked as an option.

  • This article should be retitled "Desperately Seeking Vindication".

    Jim keeps trying... This article sorely misses the big picture.  When Disney bought ABC/Cap Cities, folks said they overpaid for THAT, too.

    Years later, the property of ESPN alone was worth the purchase.  And now ABC, on its own, is a powerhouse of broadcasting, and creating secondary markets for its product on the internet.  And that says nothing of the synergistic machine that's been enhanced for Disney animated and live-action entertainment through these and the related broadcasting venues that came with ABC/CC.

    With the PIXAR deal, Disney didn't just pay for PROPERTIES.  They paid for a braintrust - arguably the single richest braintrust in fantastic feature storytelling.  

    This braintrust is and will be informing everything "Disney" for years to come.  What's that worth?  It'll take years, maybe a decade or more, to really get a sense of it.

    But Jim must be vindicated, and citing some "study" is only the latest vainglorious reach for that elusive payoff.

    "Don't believe me?"

  • Not to mention the huge impact the braintrust has and will have on WDI.  

  • Great article, Jim. I understand what you're saying, and agree. Walt Disney Co. should have payed less, but since they didn't there is nothing they can do now. Disney Digital 3-D is not going to help, just put out some Pixar dvd box with all special editions dvds and promote it big, or something. Please no crappy sequels!

  • This article really pisses me off.

    Give it a chance for christ sakes. It's been less than a year!

    It seems this is Hill's chin's personal opinion rather than anything published by Disney.

    The people at Pixar are filmmakers first. Who the hell WANTS to see sequels to these pictures anyway?!! They're supposed to be one offs in the first place. It's the sick and twisted money making corporate suits at Disney that may want to kill the goose that laid the golden eggs, though surely even they know that it takes time for a merge like this to come to fruition and that they will only reap the rewards on a longer term.

  • As far as the merchandise goes, if Disney marketed the movies from which these clothes/toys/books/etc. are from, then the merchandise would sell better.  For example, I was at The Disney Store last week.  "Peter Pan" stuff was everywhere, including on the TV.  

    To market the films from which this new merchandise is to be from, people actually have to be able to buy them.  Are any of the Pixar films in the vault at the moment?  If so, bring them on out and let people know about them.  If they are still in print, then maybe have a Pixar section of The Disney Store...that might be a good way to sell the merchandise.

    Many adults buy Disney merchandise, even if they don't have kids.  Just because some kids don't like these films doesn't mean that adults don't.  I have the majority of "Finding Nemo" characters in plush form, and I have no kids.  They just need to market different products to different interest groups.

    I've been on the fence about the merger since it happened.  I'm happiest about Disney being able to have control over the movies and characters.  Even if that's all Disney gained control of (instead of buying Pixar), I'd be happy.  I also probably wouldn't have seen any non-Disney Pixar film (because I only like Disney animated movies...I'm weird).  Anyhoo, my biggest concern over the merger is that the parks will become Pixarland (Nemo, TS, MI, Cars- coming to a park near you)...where are the new attractions based on Disney movies?  

  • Forgot something- I also am concerned about Lasseter having so much control over the Disney movies.  I'm worried that he'll want them to be like Pixar films.  Which they're not.  Those are my concerns.

  • Not gonna fall for it Jim. Pixar's aquisition was a good choice. I stand by Disney on this one. We're NOT gonna get into another 'Cars is a failure' article. Not EVERY disney franchise is going to be pirates, or princesses. I saw Disney's annual report. Theyre not exactly doing poorly. Their #'s are up.

  • Hi Jim,

    I had to chuckle at your subheading here where you mention the Pixar franchise's.  A couple of years ago there was a big Pixar article in WIRED magazine which had a great quote from Andrew Stanton: "Whenever anyone uses the word 'franchise' around here, we b!*©#-slap them." Obviously, the Pixar story brain trust doesn't look at marketing in traditional ways.

    I think (like it matters to Iger, Catmull, et al what I think) that Pixar's dollar value rests more on the future potential rather than re-visiting the past. They merely purchase the library of a dead studio, but a living entity in its prime... at least, that's the hope.

    As far as marketing "Ratatouille" goes, I remember years ago working with a film buyer from a major theatre chain. She had just visited Show West and reported that the buzz was that Disney was worried about the potential struggles of marketing all the supporting cast from "Beauty & the Beast". After all, what kid wants a candlestick in his Happy Meal? Where's the cuddle factor?! Well, they seemed to bridge that gap okay.

    It's the filmmaker's job to make the marketing department's job easy. (i.e. Story) So far, Pixar's track record has been pretty consistent.

  • NBX may have bombed because it was definitely a limited release but I can tell you, the two screenings I went to were absolutely packed.  The Pixar movies could theoretically benefit from the 3-D enhancements.  Particularly Finding Nemo, Toy Story 2, Bug's Life and the Incredibles.  

  • The Incredibles are kiddie stuff?!?  I bought an Incredibles Baseball jersey at Disneyland last year.  A simple Red jersey with The Incredibles across the chest and the logo on the arm sleves.  I wear it all the time, even at work on casual friday.  Adults constantly say "cool jersey" and "where did you get that."  I respond with "Disneyland."  Their reaction is a disappointed "Oh."  That is your problem.  The Incredibles probably has the most adult oriented audience of all the Pixar movies.  The merchandise just isn't available outside of the parks.

  • You need to check your figures when talking about Nightmare. I think you read your tea leaves wrong.

  • Nightmare Before Christmas In 3-D a Huge Bomb? Come on now. The film only did $50 million in it's inital release in 1993, which I remember was being labeled a failure then. Only through video has this film acheived the cult status it has. $8.7 million isn't bad when you consider how FEW digital projection systems are in use in the United States now. At last count, it was around 800. You wouldn't expect this film to open and play on all 800 at once would you? With the process now complete, this film can re-play in theatres in digital 3-D every year from now on for very little cost and probably still rake in a couple of million per year. I think Jim is a little off base with this one.

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