The Walt Disney Company and Pixer Inc - Case Analysis The...

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The Walt Disney Company and Pixer Inc: To Acquire or Not to Acquire? Presented By: Group 3 1. Himshikha Suhag- PGP/01/22 2. Pramita Wankhede PGP/01/35 3. Tushar Pantawane PGP/01/44 4. Ronak Vankawala PGP/01/46 Case Analysis
Current Situation Disney currently faces difficult decision regarding its relationship with Pixar. Although previous collaborations with Pixar have brought immense success for Disney in terms of revenue and recognition, Pixar’s CEO Steve Jobs has been trying to negotiate a fairer deal with no success. Disney wishes to stay with previous negotiation terms, as it is more favourable for Disney.
The Walt Disney Company Founder: Walt Disney and Roy Disney The official Walt Disney Company was created in 1923, when Walt Disney signed a contract with M. J. Winkler. 51 animated 2D films in total Not strong in 3D animation American diversified multinational mass media and entertainment conglomerate
Pixar Pixar originally began as a tech-company named Lucasfilm’s Computer Division. Steve Jobs saw potential in its technology and purchased the company for $10 million, renaming it “Pixar.” The company enjoyed its many successes, including the release of the highest grossing animated film of all time, Toy Story 3.
Capabilities with Pixar Pixar Walt Disney Area Short films and commercials Animation movie Asset CG and Story telling Creativity Movie Industry know how Distribution Channel N/A Movie, TV, DVD Culture Bottom Up Free-spirited creativity Perfectionism Egalitarian Collaboration Top Down Managers establish and reinforce culture Operation cost Small Staff, Less Budget, Less time, Toy story was made with 110 staff Large Stff, Large Budget, Lots of time
Capabilities with Pixar Pixar Walt Disney Animation 3D: Leading Computer animation technology Traditional 2D Software 10 years of proprietary software system 1. Renderman 2. Marinonette 3. Ringmaster N/A Skill Most tech employees held PhDs Lack of CG skill
Previous Relationship CAPS: Relationship began in 1986 when two studios collaborated on the development of CAPS (Computer Animation Production Systems) Feature film Agreement: Disney and Pixar Signed a deal in 1991 to produce 3 full-length 3D CG animated movies. Terms: Disney would fully fund production cost of the movie and will own movie rights and Pixar would be paid participation fee to the basis of total revenue. Tot Story was part of this agreement. Co-production Agreement: Terms: Pixar would exclusively produce for disney at least 5 original full length animated films. Production costs would be shared. Disney would fund all marketing expenditure and would receive distribution fee for the same. In total Disney would receive around 60% of the profit and pixar would receive 40%
Conflict Renegotiation of distribution-only deal: Since 2002, Steve Jobs had been trying to broker a deal with Disney whereby Pixar would fund the production costs in returns of 100% ownership of the films and leaving Disney with just a fixed distribution fee.

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