When Steve Jobs announced the $7.4 billion merger of his Pixar Animation Studios with Disney on Tuesday, he said the two companies could finally move beyond their "two separate sets of shareholders and two different agendas."
But in fact, there are three companies in that equation. Left mostly unsaid throughout the merger celebrations was exactly how Jobs would balance his new role as board member at Disney and his job as chief executive of Apple Computer.
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As Apple has moved into video distribution--using Disney content as its first centerpiece--those two companies' fates have become increasingly entwined. Some corporate governance experts say that puts Jobs in a deeply uncomfortable position, particularly as Apple and its rivals seek to distribute Disney and Pixar films online.
"It's like sitting on both sides of the table when negotiating," said B. Espen Eckbo, the director of the Center for Corporate Governance at Dartmouth University's business school. "The only issue is whether the degree of conflict of interest is large enough to raise a red flag."
This kind of interlocking board of directors is far from rare, but the phenomenon remains a serious concern for the advocates of corporate reform who have gained influence since the costly collapse of companies such as Enron and WorldCom in the early part of the decade.
No one argues that Jobs, Disney or Apple fall in the same category as companies whose executives have been indicted for fraud. But the worry is that Jobs--soon to be the largest Disney shareholder, along with his 1 percent share of Apple as chief executive--is taking on the difficult task of representing two separate sets of shareholders whose interests may not always be identical.
"If we can make great animated films that really affect the culture, there is going to be a strong demand from younger family members to watch them many, many times in many places, on probably many devices."
--Steve Jobs
The most obvious flash point will be the development of Apple's iTunes video business. Jobs and Disney CEO Bob Iger launched this new service together late last year, with Disney-owned ABC Television content such as "Desperate Housewives" and "Lost."
Though Apple has not disclosed its future plans for the service, it is widely expected to seek an expansion of the video service to provide feature films as well as television shows and music videos. The ability to distribute classic Disney and Pixar films to the video iPod or other future Apple devices would represent a coup for the computer company.
"The big picture is that obviously Apple is going to try and make an assault on the living room in 2007, and they need to increase the amount of content they are selling in order to make it work," said Piper Jaffray analyst Gene Munster.
Indeed, in a press conference on Tuesday, Jobs was optimistic about the ability of the new Pixar-Disney match to distribute its content increasingly to new devices, although he stopped short of mentioning Apple or the iPod by name.
"The opportunity for viewing these films, both on televisions and other types of devices, is huge," Jobs said. "If we can make great animated films that really affect the culture, there is going to be a strong demand from younger family members to watch them many, many times in many places, on probably many devices."
Jobs may also be in a position to gain knowledge about his competitors such as Microsoft, with which Disney has intermittently had a close working relationship on issues such as digital rights management and digital content delivery.
Disney also has a long-term technology agreement with Hewlett-Packard, in which the computer maker provides the studio with a wide range of hardware. The two have done extensive
I don't think anyone has ever really thought about calling something a "Mickey Mouse" operation or product. The rodent made Walt and company millions, so I, for one, would be more than happy to be part of a Mickey Mouse operation.
I hope the Disney - Pixar merger brings more quality products to the public. Something really needed in todays entertainment world.
This article was weak and biased. Bottom line, Steve Jobs started a company that was better at doing Disney's job than Disney itself. Pixar was not the only asset that Disney got, they got one of the most successful corporate leaders in the world. He now has the largest private stock portfolio of Disney. To be honest, Pixar had to be bought out before they were competing with Disney. Giving Steve Jobs a reason to care about Disney's fortunes is part of the end goal. Apple Computer (Under Jobs) has innovated the distribution system for video. How is an Apple/Disney alliance a conflict of interest? It isn't. It is something for other companies to wish for upon a falling star.
"Jobs has more influence than before, so you should all be wary of the evil/unfair things he might plan."
I think it's fine if Disney and Apple help each other, as long as they continue making good products.
On the other hand, if they squeeze out competition so they can stop innovating (ala MS I.E.), or squeeze out competition so they can price gouge (ala MS Office), then I will have a problem with their actions.
he bought it as an investment for $10 million. The company was in in existence before Mr. Jobs bought it and if memory serves me correctly was started by one George Lucas.
The point of the article is that there is no Apple/Disney Alliance. It is Disney and Pixar that have merged.
So the shareholders in Apple and Disney have two different agenda.
Disney will want to make the most profit from their content while Apple for their Video distribution will want to but the content for the best price possible. If Steve Jobs is on both sides of the table during the discussions who will win? Will there be a bias? Will Apple's profitability be affected in the interest of growng Disney or will Disney's profitability be affected?
The heart of the matter is relevant, but I agree that it is badly presented.
... as he owned shares of PIXAR and APPLE. JOB is probably doing what's best for him AND the companies. Apple and PIXAR are both his babies, he will try to do what is best for them. Disney buys PIXAR, so he should get some controll inside of DISNEY to keep his baby alive.
Or maybe this is what's needed to get a 'traditional' industry off it's butt and moving in the right direction.
So what if the Apple/Disney relationship gets closer, everyone else seems to be sitting on their hands not really doing anything (just talking).
Perhaps they'll lead by example and we'll all be better off for it (including competing companies who will obviously waiting to follow any successful model Apple/Disney create because they can't come up with strategy on their own. And then they'll complain about conflict and fair terms for content and wah-wah-wahhhhh!!!!).
Take it one step further. Sony bought up a movie studio and brought BMG Music on board as well. Rather than a conflict of interest, this was supposed to be a brilliant move. It hasn't worked out that well, of course.
Nevertheless, Sony/BMG definitely has mixed incentives in negotiating with Apple and other companies that operate music download services and make mp3 players, since it competes in the same markets. It is not surprising that Sony is/was the big holdout in Australia and Japan for getting music to the iTunes music store. Sony would surely prefer to be the dominant player.
So, to me, if Jobs now sits on the Disney board, it is not such a big deal. These sorts of alliances are not uncommon.
Agreed, the Sony electronics-music-film combination is far more strangled together than the Apple-Disney situation.
Apple just won't get big discounts and such but if Disney treats Apple equally fair with other tech company's then thats more than enough. At least there won't be an exclusive contract with MS over the content. :)
It started as the computer graphics division of Lucas Film...
...and Jobs did a buyout for 10 MUSD. You can read the history of PIXAR at <a class="jive-link-external" href="http://www.pixar.com" target="_newWindow">http://www.pixar.com</a>.
i dont think you should let miley do hannah montana its not fair for what she did i think you need to replace her with someone esle some one that looks like hannah not a silly girl in a wig thats so fake miley so fake she a look stealer anyway she stold hilary duff lizzy mcquire movie looks for mileys hannah montana that aint right thats why hilary duff changed her look for? all because of miley cyurs because miley dont like hilary duff at all shes jeouls of her big time? sence hannah montana show is no more hilary duff went back to her old look again im so glad there you go have hilary duff play the part of hannah montana shes real her look her hair its all real not a wig? hilary can sing dance act way better than mliey. miley blew it she dose not desreve to be hannah montana ever again and she lied to all the young girls who likes hannah miley told the girls hannah was a real girl and she aint its only miley in a wig those girls find out there going to be mad and not watch the show again and you lose some ratings big time and milery wounld lose some fans? like me? fair is fair mliey messed up thats the way it should be please replace her or take of the show because nobody wants to see a girl who kisses other girls or be naked on tv thats gross you know how bad she made diany channle look? bad? all my friends siad if you bring her back they aint going to watch it because of what miley did gross?
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Listen now... (10MB mp3) 
I hope the Disney - Pixar merger brings more quality products to the public. Something really needed in todays entertainment world.
a company that was better at doing Disney's job than Disney
itself. Pixar was not the only asset that Disney got, they got one
of the most successful corporate leaders in the world. He now
has the largest private stock portfolio of Disney. To be honest,
Pixar had to be bought out before they were competing with
Disney. Giving Steve Jobs a reason to care about Disney's
fortunes is part of the end goal. Apple Computer (Under Jobs)
has innovated the distribution system for video. How is an
Apple/Disney alliance a conflict of interest? It isn't. It is
something for other companies to wish for upon a falling star.
"Jobs has more influence than before, so you should all be wary of the evil/unfair things he might plan."
I think it's fine if Disney and Apple help each other, as long as they continue making good products.
On the other hand, if they squeeze out competition so they can stop innovating (ala MS I.E.), or squeeze out competition so they can price gouge (ala MS Office), then I will have a problem with their actions.
in existence before Mr. Jobs bought it and if memory serves me
correctly was started by one George Lucas.
So the shareholders in Apple and Disney have two different agenda.
Disney will want to make the most profit from their content while Apple for their Video distribution will want to but the content for the best price possible. If Steve Jobs is on both sides of the table during the discussions who will win? Will there be a bias? Will Apple's profitability be affected in the interest of growng Disney or will Disney's profitability be affected?
The heart of the matter is relevant, but I agree that it is badly presented.
So what if the Apple/Disney relationship gets closer, everyone else seems to be sitting on their hands not really doing anything (just talking).
Perhaps they'll lead by example and we'll all be better off for it (including competing companies who will obviously waiting to follow any successful model Apple/Disney create because they can't come up with strategy on their own. And then they'll complain about conflict and fair terms for content and wah-wah-wahhhhh!!!!).
brought BMG Music on board as well. Rather than a conflict of
interest, this was supposed to be a brilliant move. It hasn't
worked out that well, of course.
Nevertheless, Sony/BMG definitely has mixed incentives in
negotiating with Apple and other companies that operate music
download services and make mp3 players, since it competes in
the same markets. It is not surprising that Sony is/was the big
holdout in Australia and Japan for getting music to the iTunes
music store. Sony would surely prefer to be the dominant
player.
So, to me, if Jobs now sits on the Disney board, it is not such a
big deal. These sorts of alliances are not uncommon.
more strangled together than the Apple-Disney situation.
Apple just won't get big discounts and such but if Disney treats
Apple equally fair with other tech company's then thats more
than enough. At least there won't be an exclusive contract with
MS over the content. :)
Lucien.
all my friends siad if you bring her back they aint going to watch it because of what miley did gross?