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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.

Your thoughts?

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  • Not all of these movies seem to lend themsleves to a sequel.  Nemo, Bugs and Cars all seem to have told their story and I don't see much interest in revisiting.  Monsters... maybe.  The obvious sequel would be for the Incredibles.  Not only does the end of the movie set up for future adventures, audiences have shown with Spiderman, X-men, etc. that they want to see their favorite superheroes in new adventures.  I think the Incredibles could be set up for a two-sequel trilogy and be a huge boost for their continued popularity and merchandising.  We've seen Pixar make one great sequel (TS2) and I'm sure they could do the same with the incredibles IF they chose to.

  • Jim, The "bah, humbug!" Christmas season is over. Let the suits worry about marketing, and let Pixar create. Wall Street seems to be happy now too.

  • Probably they just have to wait for the kids who were little when these films came out, and are now interested in PG13 movies, to get a little bit older. They'll get over the whole "I'm a grown-up now! whooo!" stage, and then they'll start to appreciate the films they loved in their childhood again.

    That's my theory at least.

  • To be honest Jim you've been against the whole Pixar deal since day one so why should we take anything you say seriously when it comes to Pixar and Disney.You tried to down play the release of Cars for no reason.If you really want to criticise any of Disney's recent moves lets have a update on The Muppets perhaps!

  • Incredibles leads itself to have sequels or possibly a TV show.  Monsters Inc could get a sequel or TV show as well. There are a lot of stories that could be told with monsters and superheros.  I think it is too late for a sequel to Bugs Life, but they do promote the characters at the parks quite a bit.  Maybe they could do things with zoos, etc to have a traveling bug exhibit with characters from the film.  Finding Nemo could do similar things with fish at aquariums around the country.  They should also have Finding Nemo fish supplies at stores.  

  • I think there is a problem with the Pixar properties, and it is this: CGI is no longer the exclusive domain of Pixar. Every movie studio in the planet, plus free-lance media companies, are doing CGI, with more or less success. That has watered down Pixar's unique appeal to some degree. Granted, Pixar still blows everybody else out of the water when it comes to CGI rendering, storytelling and character development. But the novelty of CGI has worn off, and that's affecting Pixar as well as everyone else who uses that medium.

    But you know, as much as I dislike sequels, there may be some merit in Pixar investing in them. Sequels can re-introduce characters to a populace overwhelmed with alternatives. Revisiting Sully and Mike (Monsters Inc.) and Buzz and Woody (Toy Story) can only be a GOOD thing if the script is solid. Pixar's best movies have characters with real personality, characters we feel we know and like. (Unlike the countless cookie-cutter talking-animal movies that infested theatres last summer).  Mickey Mouse still appears in movies, after all (and he's ripe for a really good feature film comeback IMO), so why shouldn't the Pixar gang? I'd love to see another Incredibles film. I see real potential there. So yeah, I'm all for sequels, if they're done with the same inventiveness as had Toy Story 2.

    If you ask me, Jim, the property Disney overpaid for was the Muppets. Over at Muppet Central.com, there's a rumor that a 10-minute "muppet mockumentary" pilot has been filmed and is being reviewed by the Disney suits for a possible launch as a new Muppet show. So Disney is still trying, but for my money, it may be better to cut losses and sell or shelve that particular property...

  • If the problem, as someone mentioned earlier, is on the basis of the current kids' market, wouldn't they just have to re-introduce the characters from the four ailing movies to the next generation? (And y'all know that I'm NOT talking about making annoying sequels!) Couldn't they just re-release the films theatrically every few years, as was once a Disney tradition that kept people interested in Fantasia, Peter Pan, and the rest of the Disney library?

    By the way, the formatting for Wall-E sounds pretty good.

  • Nighmare in 3-D may have only pulled in $8.5 million domestically, but it's per theater average was $19.5K since it was only released in 168 theaters. For comparison Finding Nemo's per theater average was $20.8K. I'd call that a huge success for Nightmare rather than a box office bomb. I think it is a strong motivator to convert more theaters into Disney-Digital 3-D and to continue to make 3-D versions of it's films.

  • My favorite part of this latest in the series of "THE PIXAR AQUISITION IS A DISASTER" series is the part where Jim acknowledges that the Cars characters (you know ... that terrible, terrible bomb Pixar released last year??) are right up there with Toy Story's characters in the mind's of kids.

    I'm getting a Save Disney Sucks vibe again, Jim. If your sole goal is to make people angry and boost your page hits with these stories, then you're doing well. If you're looking for stories that people find interesting, engaging, and BELIEVEABLE then you're falling flat on your face.

  • BTW....by the time Pixar would have sequels out to the films needing the boost with todays kids.....those kids would not be kids anymore......

    your logic is flawed....

  • Jim, Jim, Jim.  I'm with the unsilent majority on this one.

    I remember when Chrysler bought American Motors.  "Bad move," I said, yet they have done wonders with the Jeep brand.  I remember when ABC bought ESPN.  "Bad move," I repeated.  "They already have ABC sports."  Yet look what they have done with the brand.  Paul McCartney, Yoko Ono and I thought Michael Jackson paid too much for the Beatles' publishing catalogue, but he envisioned using the songs for commercials and other things the band itself had never considered, and he made money off that investment.

    So when Disney acquired Pixar, I learned to look beyond the short term and see what the brand - and talent - could do in the future.  Not only did Disney acquire the most creative team around, but they also kept that team from jumping to another company that might have wanted to make a big splash in the animation field (think of all the giant movie companies who do not have an animation division).  Disney acquired characters (although many were already Disney property), which leads to cross-promotion.  Yes, kids are growing out of some characters, but adults are growing into them.  The first thing I thought of was "hey - I buy Incredibles stuff," and then TikiBird73 beat me to the punch.  Adults buy this stuff too!

    This takes us back to the predictions for how well a film must do to meet expectations.  If you set your sights too high financially, you will often be disappointed.  If you set your sights reasonably, and concentrate on a quality product, you will be pleasantly surprised.  I know bean-counters don't like surprises of any kind - but moviegoers like pleasant ones!  (Toy Story 1, Borat, Night at the Museum - pick any so-called "sleeper").

    I say it will take more than one year to fully assess the quality of this acquisition.  And we may never truly know the ripple effects.  So just accept it!

  • A couple of thoughts...

    - The new Finding Nemo show at Animal Kingdom seems to be packing in the crowds and getting good buzz, so perhaps there's life in the old fish yet. [BTW, the cast album just popped up on iTunes, even though it's not yet on sale in the Parks.]

    - re: jayjayny's's Lincoln quote -- that's one of my favorite quotes, too, and I was surprised when, on the audio commentary for the Pollyanna DVD, writer/director David Swift said that he himself had created the quote and was amazed to find "Pollyanna lockets" on sale at Disneyland with the very same quote, also attributed to Lincoln! Just goes to show how creative license can be taken for fact. But no matter who said it, it's a great quote.

  • Everyone in the movie industry knows, and Disney should definitely know, that most of the merchandise sells you will make for a movie comes within a 2-3 year window starting from just the time a movie is released to about a year after the movie has hit dvd.

    That would be like me being surprised that Disney isn't making a lot of money off of these movies anymore: Aladdin, Lion King, Beauty and the Beast ect.  They all made a lot of money upon release in theatres and video but now make little in comparision.  That's the business.  If you want to make some more off an older movie you either have to release it again to theatres or video, which Disney is great at doing, or find another way to build the franchise.

    Disney will continue to make lots of money from Toy Story merchandise with a third  installment coming out, having Buzz Lightyear rides in the park and the upcoming Midway Mania.  They should also continue to do well with the Finding Nemo brand as children will continue to discover Nemo and friends at Epcot and Disney Subs and kids are going to snatch up merch.  Cars merch should be well for another 6 months to a year and then you could do fine with Carsland at DCA.  Anyway, you look at it Disney has made good use of the Pixar properties so far and will continue to do well with them as they do what they do best.  Re-introducing new generations of children to their characters through re-releasing videos, making attractions, and sequels.  No one expects Disney to make their money back overnight, but they will make it back and it will be a very profitable purchase.

  • "Mickey_Hal said:

    Everyone in the movie industry knows, and Disney should definitely know, that most of the merchandise sells you will make for a movie comes within a 2-3 year window starting from just the time a movie is released to about a year after the movie has hit dvd."

    Which is exactly why Jim's entire premise is completely bogus. Disney can't have been expecting to make a fortune off of exploiting Pixar's past successes (if they could exploit past successes, why not exploit their own?? There are a few successful Disney animated features, you know ... ).

    No one with any sense would expect that. They acquired Pixar for several reasons ... one, to stop them from defecting to another company and becoming Disney's chief competitor ... two, to allow them to hold on to the licensing rights for the characters they do want to continue exploiting (i.e. Toy Story) ... three, to bring in house their creative talent and put them to use restoring the Mouse House to its former glory ... and four, to help repair some of the decades long ill will Eisner had generated among the masses.

    Making a few bucks off Nemo is nothing but gravy on this deal.

  • As divorce week continues:

    If George Lucas hadn't gotten a divorce, we wouldn't be having this conversation. Pixar would still belong to George, who has shown himself to be a fairly tough negotiator, knows how to get a film distributed and marketed, and even knows a little about selling toys. Disney Co., if even involved, would be making very little money off the Pixar characters. I'd say Disney Co is way ahead at this point.

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