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Since January 24, 2006,  when Disney acquired Pixar,  Pixar executives have been in charge of the joint animation group.  Change has been in the works.  Animation head Ed Catmull and fellow former Pixar executive John Lasseter have been slowly introducing their Pixar based management culture (with the added support of Disney shareholder and Board of Directors member, Steve Jobs).

Pixar has always had its own way of doing business.  Movies and creative staff are given the time and space they need to create.    There isn’t a rush to market.  While bottom line revenue is important, there is a separation of powers when it comes to development.  Pixar doesn’t want their story tellers thinking about how to make money or their money makers thinking about how to tell stories.  Executives don’t go to story meetings.  It’s all part of its management practices.  Similarly, Pixar also strives to stay original and avoids copying its successes.  Toy Story is the only movie it’s made a sequel of.

Yesterday, in a clear sign of Disney’s “Pixarization,” changes were announced.  Principal among them, Disney will cease issuing direct-to-video sequels of some its franchises.  The sequels, which Steve Jobs has called “embarrassing,” were money makers but their quality level, both in story and execution was second rate.  

Many have felt the direct DVD offerings dilute the Disney brand and stifle the creative talents of its staff; too high a price relative to the revenues they generate.  The Little Mermaid III, which is in production, will be the last title released direct to video.  Little Mermaid 4 through 12, like ESPN 8 (the “Ocho”) will only exist in people’s imagination.

While some shareholders may be concerned about lost revenue, the Pixarization of Disney Animation is probably good in the longer term.  Pixar’s management practices (which were previously discussed on Metue) are batting a thousand.  Every title Pixar has released has been an unquestionable commercial and critical hit.  Box office revenue for Pixar’s  seven combined feature releases has totaled more than $3.6billion (full stats in chart) and that doesn’t include billions in DVD sales and merchandizing. 

Two of Pixar’s seven titles have won Oscars for Best Animated Feature, four have been nominated.  Toy Story 2 won a Golden globe for Best Comedy/Musical Feature Film.   Friday’s release of Ratatouille  is almost universally anticipated to be another sure thing at the box office (making Friday a very big day for Steve Jobs who’s other little company, Apple, will be launching the already famed iPhone on the same day).   

The end of Direct to Video animation titles will cut off some profit (Disney has been a leader in the video sequel marketplace) but it should reinvigorate animation staff and help restore Disney’s once vaulted reputation for being a creative, thought-leader in animation.

Getting creative staff focused, and excited about developing new projects, will help the mouse-camp continue to compete as rivals like DreamWorks Animation and Imagi try to muscle further in to the feature film animation market.

As part of the continued merger of Disney and Pixar cultures, more management changes at Disney Animation are also likely in the works.