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Welcome To Planet Pixar
gambit3 writes "Wired Magazine has an in-depth article on the growth of Pixar examining how it compares to, and how it became the new Disney: 'Pixar hasn't just turned into the new Disney. It has out-Disneyed Disney, becoming the apprentice that schooled the sorcerer.' Its films have grossed $2.5 billion, making it the most successful film studio, picture for picture, of all time."
By letting Pixar go, Disney doesn't GAIN anything they weren't already entitled to under the old contract. But, as you point out, they're not losing anything either.
Well, not technically. But they "lost" all of the future revenue they would have had from future Pixar films. They lost the *potential* for revenue from future films, which is what companies are based on after all - revenue potential, not current revenue. A company with no future is not a company for very long, pretty much by definition.
So Disney did give up a lot, quite a lot. I really doubt Pixar will keep up this run of massive hits forever, but assuming they even put up half the gross over the next five movies, that's still $1.25 billion in gross Disney just threw away.
Was Disney put in an impossible position by Pixar's demands? I don't think so. Pixar had become Disney's animation business and they knew it. Disney's in-house animation has stunk up the business for years and it's only getting worse - that's of Disney's own doing. It was Disney's mis-management that put Pixar in the position they were in, where they could make such demands, and in my opinion Disney was in no position to refuse them, even as unreasonable as they sounded.
If you run an ice cream stand, it's not you or your stand that people are coming for, it's the ice cream you're selling. And you need to get that ice cream from somewhere, whether it's by making it yourself or by buying it from someone else. Without ice cream people want to buy, you may as well not have an ice cream stand, right?
The question is, does Disney want to be in the animation business or not? Letting Pixar go suggests to me that they don't - otherwise, there's really no price that would have been too high to pay. This was their source of ice cream. Without Pixar, there is no animation business at Disney anymore, and they need to rely even more on their theme parks (which are nothing without their animation business) and ABC. Eventually, the theme parks cannot really survive without the animation, as it's all based on Disney's "branding".
I don't usually like to sound too dramatic about these things, as most companies can survive events like this, but I really think Disney threw away their core business here, first by letting their own animation division fall apart, then by throwing away their only remaining source of reliable animation revenue. They no longer have anything they can really market as Disney animation with a straight face. (Personally, I think their Studio Ghibli contract has left them with some films better than either their own *or* anything Pixar has ever done, but they'll never use them to their potential - they're too hung-up on 3D right now). Without that animation, their theme parks decline, and then the whole company crumbles. Disney cannot survive just as ABC.
This was not a win for Disney. The deal Pixar wanted was not a very good one for Disney, but it was the lesser of two evils.
The grass is only greener, if you don't take care of your own lawn.