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Steve Jobs brought his magic to Disney

Steve Jobs, who was Disney's biggest shareholder after it bought Pixar, helped revitalize the media giant.

October 06, 2011|Dawn C. Chmielewski, Los Angeles Times

Nowhere is this thinking more evident than at the Walt Disney Studios. As declining DVD sales and theater attendance forced a reduction in the number of films it finances and markets, the studio has focused on select, high-profile pictures such as "Pirates of the Caribbean" and "The Muppets" that can be exploited across the company's various entertainment units.

The same philosophy began to permeate Disney's consumer products group, which abandoned a practice called "label slapping," in which a toy maker uses a popular movie title to sell generic toys that are otherwise unrelated to the film. Instead, it embraced the oft-quoted motto of John Lasseter, the creative muse of Pixar, that "quality is the best business model."

Jobs' most lasting imprint on Disney is Pixar, the pioneering digital animation studio with an enviable track record: All 12 of its films have opened at the top of the box office.

Pixar's enduring characters — Buzz and Woody from "Toy Story," Lightning McQueen and Mater from "Cars," and others — not only light up the big screen, but also populate the company's theme parks, toy lines and interactive games.

It was Iger's genius that kept Jobs and Pixar in the Disney fold in 2006 after relations between the two companies had soured. Pixar's distribution deal with Disney was coming up for renewal and Jobs had broken off talks, vowing never to do business with the longtime partner as long as Michael Eisner was its top executive.

Disney's own feature animation business was foundering with such box-office duds as "Home on the Range." In relating Disney's vulnerabilities at the time to investors later, Iger described a parade at the opening of Hong Kong Disneyland in September 2005: "I realized there wasn't a character in the parade that had come from a Disney animated film in the last 10 years — except from Pixar."

Within two weeks of taking over as Disney's chief executive from Eisner in October 2005, Iger set relations back on track with Jobs, who at the time was Pixar's chief executive and controlled nearly 51% of its stock.

Iger joined Jobs at a San Jose movie theater to announce that Disney's ABC network would make its prime-time television shows available on Apple's new video iPod. The groundbreaking deal burnished Iger's reputation as a techno-savvy entertainment executive and set the stage, three months later, for Disney's purchase of Pixar.

Although some on Wall Street criticized Iger, saying he overpaid, the deal prevented Pixar from falling into the hands of a rival studio. It assured Disney's access to the beloved screen characters and helped infuse Disney's storied, if struggling, animation studio with new life.

Pixar co-founder Ed Catmull and the studio's top creative executive, Lasseter, assumed oversight of all Disney animation. They imparted a culture of relentless self-criticism that has been integral to the creative process at Pixar, which has been known to replace directors or rip up scripts in pursuit of quality.

Jobs required only one thing from Pixar, according to Marty Sklar, the retired chief creative executive of Walt Disney Imagineering, which develops attractions for the company's theme parks. He once asked Lasseter what direction he got from Jobs. Sklar recalled: "John's answer was: 'He tells me, "Just make it great!'"

Although initial efforts by Lasseter and Catmull on projects already in development at Disney Animation, such as "Meet the Robinsons" and "Bolt," met with indifference from U.S. audiences, the duo helped turn the studio's animated fairy tale "Tangled" into a major hit last year.

Yet Disney's ties to Jobs and to Apple have occasionally raised hackles in Hollywood. Some questioned whether Disney's eagerness to offer its content on Apple's latest devices threatened the lucrative status quo.

"We see [Jobs'] fingerprints on a lot of Disney strategy in adopting digital platforms," said Laura Martin, media analyst for Needham & Co.

Disney's decision to offer an application for watching episodes of its ABC television shows for free on the iPad roiled some in the industry. It undercut efforts by other networks to sell individual TV episodes through the iTunes store, and the initiative by online video service Hulu to require a monthly subscription fee to view the current season's network shows on portable devices like the iPad. Hulu is jointly owned by Disney, News Corp., Comcast Corp.'s NBCUniversal and Providence Equity Partners.

When Wal-Mart's movie service Vudu launched on the iPad this summer, every major Hollywood studio but one — Disney — participated. Vudu had designed a version of its website specifically for the tablet instead of requiring a download from the iTunes store. That approach allows Wal-Mart to keep all the proceeds whenever users buy or rent movies — in effect denying Apple its usual 30% cut of any transaction.

Disney declined to publicly state its reasons for the decision.

Alfred E. Osborne Jr., senior associate dean and expert in corporate governance at UCLA's Anderson School, said Jobs' death would leave a void on Disney's board, but one less devastating than when its founder, Walt Disney, died.

"For years, they'd sit around and ask, 'What would Walt do?'" Osborne said. "The challenge of having a visionary that is so transformative and dominant is that everybody looks to him for leadership and they sometimes check their brains at the door."

Osborne said Disney board members would now need to assert their leadership in the absence of Jobs' forceful presence.

Photos: Steve Jobs | 1955-2011

dawn.chmielewski@latimes.com

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