Disney buys innovation, but will it last?
Disney's $7.4 billion acquisition of Pixar Animation Studios is a classic case of a mature company losing its edge and buying a smaller upstart to rejuvenate itself. Disney's animation efforts have gone from dominating to ho-hum over the past few years, while Pixar has managed to crank out nothing but hits (Toy Story, The Incredibles, Finding Nemo) that get awards and draw big audiences.
In fact, the departure of Disney CEO Michael Eisner was probably attributable on his inability to cultivate Pixar, who was allowing Disney to distribute its movies, at a good profit or both companies. And Pixar held all the good cards, since they really didn't need Disney while Disney needed their movies. The purchase, by new Disney CEO Robert Iger, is an admission of that reality.
But the real question is one of cultures. Can the Pixar group maintain its innovative streak when merged in with a stolid Disney culture? After all, many Pixar employees, including chief creative officer John Lasseter, left Disney because of the difficulty of working with a backwards-looking company. They took big risks and succeeded big. The thought is that if Pixar gets "Disneyfied"," the best talent will pack up and go elsewhere.
That's the view expressed in an article in the Christian Science Monitor ("Disney's gambit on Pixar" 1/26/06)
Animation pioneer Disney has long held the reputation of "old media" conservatism, while cowboy-style entrepreneurialism has characterized the cutting-edge work of Pixar. "Sometimes, entrepreneurial and creative types have a hard time fitting into a corporate culture, especially one as traditional as Disney," says Fred Lipman of the law firm Blank Rome in Philadelphia, which practices in the area of mergers and acquisitions.
Of course, Disney assured everyone that nothing will change, and that Pixar execs will remain in charge of the merged animation unit. For now… That's what companies already say when the deal is new. Most everyone aggress that Steve Jobs, who will become the #1 Disney shareholder from the deal, will be an outspoken presence on the Disney board. It will be interesting to see how long it takes before the knives are drawn.
