Disney Open to 2D

Fans of traditional animation got a glimmer of hope today as The Walt Disney Co. today held it’s annual shareholder meeting, which was focused in part on the pending acquisition of Emeryville, Calif. animation powerhouse Pixar. The meeting started with thunderous applause as Roy E. Disney was reintroduced as a member of the board, and as CEO Robert Iger trumpeted the reclamation of Oswald the Lucky Rabbit, a character Walt Disney created in 1927, before Mickey Mouse. Iger said getting the cartoon denizen back from rights holder NBC/Universal was exemplary of the company’s commitment to classic properties and honoring the heritage of Walt Disney.

‘To build up on the legacy of Walt Disney and to achieve the full potential of the company that bears his name, we have made animation our top priority,’ said Iger. ‘And we affirmed that the art of Disney animation is incredibly important when we made a decision to acquire Pixar Animation Studios.’

Iger eventually handed the podium over to Pixar creative head John Lasseter, who will become chief creative officer of Disney’s animation studios, as well as principal creative advisor at Walt Disney Imagineering. ‘All I ever wanted to do was be an animator,’ Lasseter stated. ‘All I ever wanted to do was work for Disney.’ He went on to note how his career with Disney has come full circle since he got his start as a ride operator at Disneyland’s Jungle Cruise attraction. In his new post, he will be involved in the design of new theme park attractions, and said the unit will focus on creating more new rides based on animated properties and getting them up and running while the films are still hot.

Recalling the ongoing, highly publicized negotiations, Lasseter commented, ‘When Bob Iger came to the three of us [(Ed Catmul, Steve Jobs and myself]) and said, ‘We’re interested in acquiring you,’ I was worried because we have built this incredibly wonderful culture at Pixar that’s about creativity and quality, and everyone there, 850 of us, believe in that single thing. So I was worried, until I got to know Bob Iger. Ladies and gentlemen, you are led by a great man. He’s amazing. And that’s why Pixar joined up with Disney.”

Lasseter didn’t address speculation that he will attempt to bring hand-drawn feature animation back into the Disney fold. Instead, he speculated that Walt Disney would have loved 3D animation and used the opportunity to hype the latest Pixar film, Cars, which opens on June 9. He also treated shareholders to a world premiere screening of the trailer for Ratatouille, the company’s eighth CG feature. Brad Bird, director of The Iron Giant and The Incrediles, is directing the film, which is slated for release in the summer of 2007. ‘You’ve never seen anything like this,’ Lasseter said enthusiastically.

Iger later fielded a question from a shareholder who asked if 2D would be employed for Disney’s Rapunzel: Unbraided, which is being directed by master traditional animator Glen Keane (supervising animator on Beauty and the Beast, Tarzan, and Treasure Planet). According to Iger, the film will be made with a revolutionary process, which Kean helped develop, that will allow the animators to draw by hand and have their drawings translated to computer models. Iger also prattled off the clich’ line about technology taking a back seat to good storytelling, but drew a round of applause by adding, ‘If we find that we have great characters and stories and believable worlds, and that it can be depicted in 2D animation, that’s also fine with us. It’s an art from that’s eternal in many respects and shouldn’t be ignored.’

Disney earnings are up double digits, driven mostly by the success of media networks such as ABC, ESPN and Disney Channel. But while Touchtone Television productions have yielded solid gains and are expected to contribute more than $1 billion in operating profits, Disney’s studio efforts are suffering from weak box office and home video performance. The company is hoping to turn the theatrical business around with the two upcoming Pirates of the Caribbean sequels, as well as new product from Pixar.

‘The combination of Pixar and animation represents a fundamental investment in Disney’s creative vibrancy in the future,’ noted Walt Disney Co. CFO Thomas Staggs. ‘We expect the transaction will actually dampen earnings per share for the next couple of years. However, we believe that the combination will add to our earnings after that, and it will extend our ability to develop properties that truly set Disney apart, while adding value across virtually all of our businesses.’

Staggs said that video games spending will also put pressure on near-term results, but it’s an investment the company is happy to make. ‘We believe this business provides us with and excellent opportunity to further leverage our characters, stories and creative strengths in an attractive and growing market.’

A re-play of the Walt Disney Co.’s annual shareholder meeting webcast will be provided through Friday, March 24, at www.disney.com/investors.