'Toy Story 3' is a sequel that soars, but innovation may be inhibited

Here we go again: another adulation moment for Pixar.

The emergence of “Toy Story 3″ as Pixar’s llth hit in a row has crusty Hollywood types asking, “How do they do it?”

Then comes the followup question: “Can they keep it up?”

In the movie business, hot streaks always come to a crashing halt, but Bob Iger and his Disney acolytes insist Pixar will prove the exception. The quirky animation company headed by Ed Catmull and John Lasseter has always defied the rules, they argue.

Still, “success is a great killer of innovation,” the Economist pointed out in its recent piece on Pixar. And skeptics point to the remarks of the oracular Steve Jobs several years ago when he warned that Pixar’s uniqueness could be compromised by a commitment to sequels. Pixar must maintain its individuality, he said, adding that Disney’s ventures into sequelitis had proved “embarrassing.” (These remarks were made just prior to Disney’s $7 billion acquisition of Pixar.)

Having paid the big bucks for Pixar (and more recently another $4 billion for Marvel), it’s vital for Disney to prove that creativity can be nurtured within its corporate culture. But even as the Disney hierarchs are incentivizing their Pixar peons to perform great deeds under the mantle of the parent company, they’re arguably stacking the deck against them.

Pixar’s top talents are being spread thin, their responsibilities encompassing not only Pixar movies but also Disney theme parks and other ventures. Catmull, Pixar’s 65-year-old president, also is running Disney animation, where he has inherited several potential headaches, such as the upcoming “Rapunzel,” now appropriately retitled “Tangled.”

Pixar also finds itself facing corporate pressure to mobilize sequels for its “Cars” and “Monsters, Inc.” franchises rather than launch originals. The classic corporate argument is that sequels are pre-sold and so are their toys and merchandise. And while it’s easier to sell a “Cars” toy than a “Ratatouille” recipe, Pixar’s uniqueness has always stemmed from idiosyncratic projects like “Wall-E” and “Up.”

As an eccentric, stand-alone entity, the Pixar approach has been to find creative people and then nurture their innovative ideas — a Brad Bird, for example, who brought forth “The Incredibles” as well as “Ratatouille.” Corporate procedure, by contrast, has been to let the projects dictate the people.

The biggest problem facing Pixar, however, simply stems from its own success. Five Pixar movies have won Oscars for animated feature and “Up” should have won for picture. None has generated less than $360 million in worldwide box office. That’s downright intimidating.

In Iger’s mind, the future of Disney depends on brands and franchises, yet movies like “Wall-E” and “Up” are the ultimate symbol of nonbrands. Pixar is hard at work on new versions of “Cars” and “Monsters, Inc.” and apparently won’t offer an original until 2012 with “Brave,” about a Scottish girl who wants to be a champion archer.

The pressures on Iger are understandable. He presides over an army of some 140,000 employees and must appease complex constituencies of shareholders. Given this mission, he has demonstrated a talent for kicking ass. He fired the genial but uncommunicative Dick Cook and installed a whole new

regime in movies and marketing. He has big ambitions in the videogame arena and has drastically realigned international operations to increase regional autonomy. His radical ideas on release windows have ruffled exhibitors but won some industry converts.

In a lengthy profile in the New York Times, Iger’s management style was defined as “watch, learn, wait, pounce.”

In the case of Pixar, he’d be wise to pounce carefully. Jobs’ earlier admonitions continue to resonate. Pixarites are different from Disneyites. Their eccentricity seems to be part of their genius.

A.O. Scott in the New York Times aptly comments that the most memorable section of “Toy Story 3″ isn’t part of the movie at all. It’s an odd little short titled “Day & Night” (the polar opposite of the Tom Cruise movie “Knight and Day.”) Two charming little animated characters, who are opposites in temperament and outlook, learn to delight in each other and appreciate what they have in common. “It’s six minutes long and is crammed with visual virtuosity,” Scott says.

When I saw the little film I couldn’t help but wonder whether this was Pixar’s way of reminding us that, sure it will dish up its sequels, but there are still surprises in store. If only they can squeeze them out of the corporate cocoon.

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