Pixar's magic touch could reanimate Disney

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Call it the iPod-ization of Mickey Mouse.

Walt Disney Co. hopes to combine the marketing and technology instincts of Steve Jobs with the creative genius of John Lasseter to find the formula to restore some shine to its brand.

Disney's board was expected to huddle over the weekend to discuss the acquisition of animation partner Pixar in a deal that would leave Pixar and Apple Computer chief Mr. Jobs as Disney's largest individual shareholder. The acquisition talks, spearheaded by new Disney CEO Robert Iger, mark a complete turnaround of a troubled relationship that seemed irreparably damaged when Michael Eisner was running the Mouse House.

For Pixar, a combination would give the perennial hit machine access to the vast resources of the entertainment conglomerate-including its TV networks, theme parks and interactive operations-and allow it to spread its products across TV, DVD, digital devices and more.

It would do a lot more for Disney. "A full-blown acquisition of Pixar would reinforce and reinvigorate Disney's animation division," said David Miller, analyst at Sanders Morris Harris. "It would take Disney from an also-ran to the cutting edge of technology and storytelling."

Disney's biggest animated success outside of its current distribution and co-production agreement with Pixar was more than 10 years ago, "The Lion King" in 1994, which made $783.8 million in worldwide box office. Since then, there have been a number of duds like "Treasure Planet" and "Home on the Range" as the studio continued to release traditional hand-drawn animation when audiences were responding more to computer-generated flicks like Fox's "Ice Age" and DreamWorks SKG's "Shrek."

"People aren't convinced that Disney has the touch back in animation," said Peter Sealey, a marketing consultant and former president of Columbia Pictures.

What could restore it is Mr. Lasseter. The animator shepherded all six of Pixar's mega-hit movies in partnership with Disney, starting with "Toy Story" a decade ago, that together have grossed more than $2.8 billion worldwide. ""He's been batting a thousand. Even Walt didn't bat a thousand in the beginning. He's taken computer-generated animation from a novelty to an art form," said Aaron Berger, principal at Quattro Media, a management and production firm that also represents animators.

A former Disney animator, Mr. Lasseter wears Hawaiian shirts to work and encourages his animators to build mini-castles and tiki huts in their cubicles.

Healing powers of iPod

If the transformative marriage happens, it could do for Mr. Iger what the ABC acquisition did for his predecessor, said Mr. Sealey. It will also signal a growing closeness between Hollywood and Silicon Valley and will increase Mr. Jobs' already impressive stature.

"He'll become a Hollywood mogul of enormous importance," Mr. Sealey said of Mr. Iger. "Disney will gain pre-eminent creative and technology executives."

The iPod, in fact, played a role in restoring strained relations between the two studios. Mr. Iger cut a deal with Apple for some of ABC's most popular shows to be offered for download on iTunes. That showed his understanding of the importance of digital media to the future of his business and as the goodwill went a long way toward smoothing relations with Mr. Jobs.

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