Apple CEO Steve Jobs got Hollywood’s attention last week when he unveiled a video iPod and a deal to play Disney produced shows on them.
The pact seems to open the door to a brave new world of video downloads and monetized content in an increasingly TiVo world.
But what really got the town buzzing was the role the other CEO onstage — head Mouseketeer Bob Iger — played in the deal. Iger’s conciliatory management style may be about to pay big dividends for the Mouse House, including a rapprochement with Jobs’ other company, Pixar.
According to Disney-ABC TV Group prexy Anne Sweeney, Jobs called Iger earlier this year to broach the idea of putting ABC shows up for sale through the iTunes Music Store. Iger was Disney president at the time.
Normally such talks would be CEO to CEO. But Jobs counts Michael Eisner, then chief Mouseketeer, as a sworn enemy, an enmity that can trace its roots at least to the day when Eisner went before Congress to denounce Apple’s “Rip. Mix. Burn” ad campaign for iTunes as pro-piracy.
Iger, however, has long been an advocate of using the Internet to distribute Disney properties, and his diplomatic touch — he has positioned himself as the anti-Eisner — made him the right guy for Jobs to call.
The iTunes deal seems like a no-lose proposition for Disney.
The Mouse House incurs little cost, it gets cash back, and the low resolution of the downloads means the iPod videos won’t threaten DVD sales.
The $1.99 price point is also a hopeful sign for future Jobs-Iger talks. Disney probably could have held out for more, but the low cost fits Apple’s whole iTunes business model, which keeps the cost for individual pieces of content (songs, videos) low enough to be an impulse buy.
Apple jumpstarted the music download business with a low price and now has 84% of the legal download business.
Apple’s willingness to include “Night Stalker,” hardly a hit for ABC, as a video download offering signals a willingness on Jobs’ part to meet Disney halfway.
Initial offerings do not include feature films, however.
The movie biz has so far shied away from legal downloads, preferring streaming video-on-demand as its Internet service.
If Pixar films were to be sold on iTunes and make big coin without a lot of piracy, it would prove to other companies that Apple’s approach is safe.
The catch is that Disney controls the Pixar library and is continuing to work on sequels to Pixar’s films without Pixar.
“Toy Story 3” is in pre-production and development has started on “Toy Story 4.”
Writers, animators and others working on those films are nervous that their work may end up as nothing more than a bargaining chip, and that it will never see the light of day if Disney and Pixar re-up.
They may have reason to be worried. Iger’s already shown he’s willing to give up something to get into business with Jobs.
Giving up Disney’s development investment on the Pixar sequels probably wouldn’t be much more difficult.