What Disney Acquiring Pixar Means For Apple and the Industry (DIS, PIXR, AAPL)

by: Carl Howe posted on: January 25, 2006 | about stocks: AAPL / DIS / PIXR

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It's all over but the paper signing. BusinessWeek says that Disney's board has approved its takeover of Pixar, which means, as a side effect, Steve Jobs becomes the largest stockholder of Disney. This sounds like a simple merger and acquisition story, but it actually reshapes the tech and TV businesses. How? Here's our view of what this deal really means:

* Disney regains its crown as an animation powerhouse. No studio has ever achieved six blockbuster movie hits in a row before Pixar. With Pixar on board, Disney can now add Monsters Inc. and Toy Story to its existing stable of classic movies such as Snow White and Beauty and the Beast.

* Apple gains a gold-plated Fortune 100 customer. Expect Disney to start becoming the biggest buyer of Apple MacBooks and PowerMacs in the country. Why? Imagine being in a board meeting with Steve Jobs, watching the largest shareholder pull out his MacBook to take notes while you pull out your Dell. At least some board members will decide they need a new laptop. And once executives in the boardroom start using Macs, it won't be long before Apples are on the approved computer list.

* iTunes garners access to serious video content. The trickle of iTunes TV shows that started with Desperate Housewives and Lost will grow to a flood this year as new iTunes revenue turns skeptics to converts. As Apple begins creating its own on-demand TV network, Disney will rapidly become the preferred distribution studio because of its deep connection to iTunes.

* Apple gets serious influence in Hollywood. Unlike when Steve Jobs negotiated for rights to distribute music as an outsider, Jobs will now be a peer in Hollywood. When Jobs weighs in on anything from next-generation DVD formats to digital rights management technology, he'll now be able to drive deals and standards that an outsider never would be able to pull off.

With Jobs and Disney CEO Robert Iger joined at the hip, the days when Hollywood could just stonewall a new technology like iPods or dictate distribution terms for movies are over. Steve Jobs' relationship with Disney is now a trump card in his hand. For players in both Silicon Valley and Hollywood, that means it's now a whole different game.

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