Tuesday, June 26, 2007

Disney Done with Direct-To-DVD

From the Post Gazette, news of yet another massive change over at Disney which, under the new management and strategic vision of Pixar greats John Lasseter and Steve Jobs (yes, the Apple Inc. Steve Jobs), is getting what appears to be the corporate version of Extreme Makeover. Here's an excerpt from the article:
In a major strategy shift, the Walt Disney Co. said it will stop making lucrative direct-to-DVD sequels of such classic animated films as "Cinderella," a move that reflects the growing influence of former Pixar Animation executives John Lasseter and Steve Jobs, who once called the films "embarrassing."

The change comes with a shake-up at the company's DisneyToon Studios, including the removal of longtime president Sharon Morrill, who will continue with the company in another capacity, Disney said last week.

DisneyToon Studios will become part of Walt Disney Feature Animation and report directly to Animation president Ed Catmull and Lasseter, who assumed roles there after Disney bought Pixar Animation Studio last year for $7.4 billion in stock.

DisneyToon will now only produce original DVD films, including the upcoming film starring the fairy Tinkerbell. "Little Mermaid III," currently in production, will be the last DVD sequel released.

In the past, both Lasseter and Jobs have expressed quite a bit of contempt for Disney's direct-to-video productions, a sentiment which was carried forth into yesterday's announcement. "We feel sick about Disney doing sequels," Jobs said. "If you look at the quality of their sequels ... it's pretty embarrassing." I suppose, however, that this comment does not apply to (Pixar's) full-release sequels like Toy Story 2, or the upcoming Toy Story 3.

This is pretty big news: The direct-to-DVD-sequel strategy has been quite lucrative for the Disney company, who began the practice in 1994 with The Return of Jafar...which by 1997 had sold more than 10 million units. Profits for the Aladdin sequels alone have grossed more than $250 million (a second direct-to-video sequel, Aladdin and the King of Theives, was released 2 years later). Overall, the company is cutting out what is surely a multi-billion dollar revenue generator, which is both a surprising move for the media giant, as well as one which could result in quite a shift within the kids' media environment. To find out more about the potential impact this announcement could have, you can read articles on the evolution of the kids' direct-to-video/DVD market--which is by far the most lucrative demographic for this medium--from 1997-2005, here, here, here, and here.

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