animation - about the Pixar/Disney merger (ENG)

Managerial ‘Chinese Wall’ and multi-brand strategy are needed for the merger to be a win-win move.

1. Disney has ceased to be a creative company, and cannot become one again. Yet it needs to secure provision of high profile content for its distribution and marketing core activities.
2. This is why the Pixar-Disney distribution deal was originally a good one for both.
3. Today Disney needs Pixar's content much more than Pixar needs Disney’s marketing skills and networks.
4. The merger can yet be successful, if a ‘Chinese Wall’ ensures Disney’s marketing does not interfere with Pixar creativity, and if brands are intelligently managed.

Disney has ceased to be a creative company. Over the last 40 years it has been milking its classic film library and brand asset. Instead, Disney has become a fantastic marketing/merchandising company. The Disney brand is synonym with family entertainment. Disney is today the number seven global brand in the Interbrand ranking, right between Nokia and McDonald's. Disney finally acknowledges it simply cannot become a creative company again. Maybe one cannot successfully retain a top creative and a top marketing culture within the same film company and it takes good management to understand it and draw consequences (after all, all other majors have understood that for decades). The somehow cynic marketing approach, and the pre-eminence of marketing on creation kept the best creators away from Disney. Many great artists and producers once worked for Disney, but young Burton as well as senior Katzenberg left Disney to become immensely successful outside the empire.

Disney could accept to have no more in-house creation but it needs to secure provision of high profile content for its distribution and marketing activities. This is why the Pixar-Disney distribution deal was a good for both ; it also accelerated the global advent of Pixar.

Today Disney needs Pixar content much more than Pixar needs Disney’s marketing skills. The failure of the re-negotiation of the distribution deal two years ago showed that Pixar management is aware of this - and, at the time, Disney was not. The conditions of the merger reflect that balance of power and need. Having produced six global blockbusters in a row, mainly because of the intrinsic qualities of its films, Pixar could probably thrive in theatres with any other distributor in the future. Yet Disney remains the most efficient in extracting long term marketing value out of movie characters.

Pixar might be too beautiful a gem for the rusted crown of a declining Disney King. Yet today’s marriage can be successful for both companies if two conditions are met.

First of all a ‘Chinese Wall’ must be erected to prevent Disney marketing from interfering in Pixar creative process. Lasseter and Jobs will have high positions in the new Disney/Pixar company and headquarters and teams will not merge physically. One can imagine Lasseter and Jobs will make sure to protect the integrity, independence and morale of Pixar’s creative teams – which are at the core of Pixar’s chemistry and asset value. But a classic mistake to make would be to try to industrialize the making so as to increase the output of Pixar films. Pixar has been able to maintain high standards with two productions undertaken at any time, and one feature film out every 18 months. Trying to increase and accelerate the output could kill the magic. It would also be a bad idea to ask them to develop the in-house Disney production. Alas, once you have responsibilities and stocks, you may want to dedicate your time and skill to the whole organisation.

Second, the Pixar brand must be kept, developed, and maybe ultimately replace Disney as the leading brand. High-quality Pixar productions should remain branded ‘Pixar’ while the ‘Disney’ brand should continue to brand classic movies, low-cost sequels and related products. In the classic theory of brand portfolio, it is supposed to be a good idea to have declining giants and rising stars in the same hand, provided there is no contamination between them. A big part of the asset value of Disney lies in its brand, the only major consumer brand that ever arose in the movie business. Similarly the Disney/Pixar company should try to transform the fantastic edge Pixar has over all competitors today into a lasting, valuable consumer brand. Something like a 21st century’s 'Disney' label.

The Beauty and the Beast

On a more personal note, I have to say I am a bit afraid that the merger could kill the Pixar miracle because I am also a huge fan of Pixar and big Disney hater. Disney, by the way, is like Ivan Lendl, Microsoft or PSG: it is the Villain everybody loves to hate. The six feature films produced so far have been constantly at the top on all artistic standards (story, animation, rendering, light, music), receiving both critic and public triumph, and everywhere in the world, which is extremely rare. The consistent style and quality of all films, some directed by John Lasseter, some only produced by him, is the result of long-term dream team creative work, and managerial achievement by Lasseter and Jobs. While Disney have been making increasingly bad products for the last 30 years, Pixar has made works of art. After decades of increasingly bad animation from monopolist Disney, Pixar proved animation is not only a thing for stupid kids but for intelligent adults. As they say in the PR, ‘for the child in everyone’. And of course this is a very moral story because - it is not always the case in show business - the good product have proved fantastically successful while Disney's B movies have been doing badly.