Pixar CEO Steve Jobs (the same Steve Jobs who runs Apple) has decided to postpone the release of Cars, the seventh and final Pixar film to be released under the company's partnership with Disney.
Cars was to hit the silver screen in late 2005 but Pixar animation fans will now have to wait until the summer of 2006 to see it.
The move is no surprise. A couple of week's ago Jobs said he thought Pixar's films would benefit from summer releases. Merrill Lynch's analyst Jessica Reif Cohen notes that without Cars, Pixar's 2005 revenues will be cut to $208 million from $253 million. But she expects the company to make $50 more in revenue from to a summer release of Cars.
Business Week is suggesting that there may be more reason to delay the films release than Jobs is letting on. Reporter Ronald Grover notes: "Pixar can't make a film for anyone other than Disney until Cars is completed."
Prudential Equity Group analyst Katherine Styponias said: "By delaying the release of Cars, Pixar can put off discussions with another studio for six months. That could be enough time for a new CEO to have succeeded Eisner, with whom Jobs has had a less-than-cordial relationship in recent years."
Fulcrum analyst Richard Greenfield thinks Disney may be the ones to benefit from a delay. He told Business Week: "By agreeing to delay Cars, Disney is perhaps trying to appease Pixar to strengthen its own position in the renegotiation. Disney needs Pixar's content, given its difficulty in creating successful animated content on its own over the past several years."
Disney president Robert Iger said: "The Cars delay will not affect discussions between the two companies." He termed prospects for Pixar's return a long shot.
Pixar ended its distribution agreement with Disney at the end of 2003. Pixar currently pays Disney a 12 per cent distribution fee and gets about 38 per cent of the revenue from its films. Disney gets 50 per cent – but shoulders half of the production costs. Jobs is looking for a deal that would allow Pixar to put up all the production costs and take the lion's share of the revenue. He has been talking with Warner Bros, Sony and Fox, according to Business Week.
All eyes on Eisner
Speaking at a Goldman Sachs conference Disney chairman Michael Eisner said that Disney is gearing up its post-Pixar era of computer-animation efforts. Disney own computer-animated film, Chicken Little, will be released next summer, and Eisner says: "We have a very intensive creative group working on movies."
"We did the Pixar deal because we are interested in their technology.... I don't think you will see the Disney Company disappear from the forefront of computer-generated imagery," he added.