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Last Updated: Friday, 30 January, 2004, 17:28 GMT
Changes brewing for film-makers
By Ben Richardson
BBC News Online business reporter

Mickey Mouse
One of the world's best-known faces

Animated films have come a long way in the 75 years since the world was first introduced to Mickey Mouse.

At the forefront of the revolution have been Walt Disney and Pixar Animation Studios, which worked together on films including Toy Story and Finding Nemo.

Their profitable partnership, however, has come to an end and observers are predicting that the industry's pixilated landscape is set to change.


At the heart of the problem was money.

Simply put, Pixar was the creative force behind the films and wanted a bigger slice of the pie than distributor Disney was willing to give.

And in Hollywood, as long as you are making money, you have the muscle to do what you want.

Buzz Lightyear
Characters like Buzz Lightyear have boosted Pixar's reputation

"If you are unknown you need the distributor," says Tim Wallace, senior media analyst at UBS Securities.

"When you get known, the talent calls the shots."

Other companies such as Sony and Warner Bros have already come out to say how much they would like to work with Pixar.

And who can blame them.

The five films Disney and Pixar made since 1995 have generated more than $2.5bn at the box office.

Global ticket sales for Finding Nemo, which follows the adventures of a computer-generated clownfish, have already topped $500m worldwide, making it the most successful animated film ever.

Home viewing

And it's not just box office receipts, with much of the money in merchandising and video and DVD sales.

Showing films in cinemas generates momentum, but it is the watching-on-the-sofa crowd that keep the cash tills ringing.

Disney, for its part, has continued to re-release classics such as Snow White and Bambi, confident that parents who loved the films will buy them for their children.

What made Pixar so important to Disney, however, was its ability to push the boundaries of animation and surprise both the industry and the audience with the quality of its film-making and sassy, snappy scripts, analysts said.

Monsters Inc.
Some investors are worried about Disney's future

According to the Keith Dando, a senior lecturer in film and moving image production at Leeds Metropolitan University, Pixar managed to get both young children and adults into the cinema by talking about the film's technological merits as well as the cuteness of its characters.

"Each film has something new," Mr Dando says. "They look wonderful and each time you go, things have moved on".

Adding to the lure of Pixar's computer-generated animation was the cost.

Gone are the teams of artists who painstakingly drew and coloured the film.

Instead, Pixar can create films for about half the cost of the more traditional two-dimensional products such as the Lion King and Aladdin.


The market's reaction to the news was telling. Pixar shares rose, while Disney's fell.

Analysts said that Disney, whose profit also is helped by theme parks and non-animated films, will now have to face difficult choices.

Does it invest in new technology, try to nurture talent and find partners, or continue with its more traditional cell animation?

Michael Eisner
Mr Eisner hopes the outlook is bright

Chief executive Michael Eisner has been heavily criticised by some shareholders for his long-term strategy, while Roy Disney, the nephew of founder Walt, has been leading a vigorous campaign to have him sacked.

The most important factor going forward, analysts said, will be the quality of Disney's scripts because it doesn't matter how good the film looks if the story is uninteresting.

"Disney has a good track record," says UBS's Mr Wallace. "But the loss of Pixar is a serious blow to their franchise".

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