Oct. 5 marks the first anniversary of Steve Jobs’ death. And in the past year, the financial world — mindful of Jobs’ obsession with detail and ability to drive the Apple staff to innovative heights — has wondered about the company’s prospects without him. That also applies to Disney and Pixar. Apple may have been Jobs’ favorite child, but Disney (where he was the largest single shareholder after the company’s 2006 merger with Pixar) was a close second.
In the short-term, things are soaring. Disney shares are up roughly 70% since Jobs’ passing, while Apple has jumped 86%. Both companies work several years in advance on products and strategies, meaning Jobs’ fingerprints will be on upcoming releases for a fair bit longer (if only tangentially).
In the longer term, everything depends on the teams that Jobs helped assemble at Apple and Pixar, and on the Disney honchos. The biggest question for them centers on Disney’s leadership position in digital media — specifically, will it retain its prime-mover position?
Disney was the first studio to sell its television shows and movies in the iTunes store, which not only gave the company an early-adopter status, it opened the door for other studios to follow. (It also put Disney at odds with some studios, which criticized the move as one that could hurt traditional business models.)
“Disney is front and center in the conversation about where electronic distribution of media is going,” says Barton Crockett of Lazard Capital Markets. “While Steve Jobs clearly was not driving that at Disney, his vision was influential.”
Perhaps to ensure those avenues stay open, Apple added Disney CEO Robert Iger to its own board of directors after Jobs’ death — a smart way to ensure the relationship between the two companies is maintained.
“Bob and I have gotten to know one another very well over the past few years, and on behalf of the entire board, we think he is going to make an extraordinary addition,” Apple CEO Tim Cook said in a statement at the time of the appointment. “His strategic vision for Disney is based on three fundamentals: generating the best creative content possible, fostering innovation and utilizing the latest technology, and expanding into new markets around the world, which makes him a great fit for Apple.”
The question remains, what sort of impact — creative or otherwise — is Jobs’ absence having on the Mouse (where his shares have gone into a trust, but his board seat remains unfilled)?
Observers say the real impact will be increasingly felt in the years to come.
“Disney is very much a creature of trends,” says Ric Marshall, chief analyst with GovernanceMetrics Intl. “If they’re not in tune in anticipating where things are headed, they can get in trouble quickly.”
Disney was seemingly out of tune with trends in 2006, prior to the Pixar deal, with both its animation and theme park divisions struggling. And while Jobs was not single-handedly responsible for the company’s turnaround, he did have a notable impact.
For instance, the Disney board was prepared in 2007 to sell its cruise line and license the name to the new operator. Jobs reportedly urged against the move, saying Disney needed to control its brand. The cruise line is now a major contributor to the company’s earnings; bookings for the current year stand at 94% occupancy.
Jobs also lobbied for the re-acquisition of the Disney Stores brand in 2008, using a similar argument. Once the stores were back in the fold, he spearheaded the relaunch, which has resulted in the chain once again becoming a thriving income stream.
“Jobs was like Walt Disney,” Marshall says. “He had a way of resonating with people.”
Disney and Pixar reps declined to comment for this story. A Pixar spokesman noted the company is not participating in further stories about Jobs and his legacy.
Of course, from a creative standpoint, Jobs’ biggest contribution to Disney was Pixar. And analysts say that Pixar’s standing is in no danger.
“I’m sure Steve Jobs would be incredibly proud of what Pixar has become,” says Crockett. “I think Disney’s investment in things like Cars Land going up in Disneyland and the cruise ships, where their characters from ‘Finding Nemo’ are used heavily, show a lot of faith.”
Pixar certainly continues to monetize better for the Mouse, thanks to an increased focus on sequels and animated shorts from existing properties, and it is better integrated into other Disney properties. But some observers suggest that was more the influence of Iger and Pixar’s John Lasseter, noting that Jobs was not a sequel-driven person.
The real concern is how much the companies and their employees retain Jobs’ fixation for maintaining a forward-looking strategy and sticking to core values.
Maintaining that focus for the short- and even mid-term is easy, since Jobs still casts a significant shadow, even in death.
It’s the longer term that’s cloudier. “Part of the power of Steve Jobs was his presence, and that presence is no longer there,” Marshall says. “Disney isn’t a burning building, but there are questions, and there are concerns.”
Still, it’s worth noting that Disney thrived after Walt’s death in 1966, with shares climbing 400% over the next 10 years.
Many other companies have been closely identified with one individual, and while some have foundered after that person’s death, others have thrived. Among those with varying fates are the firms founded by George Eastman, Henry Ford, Lee Iacocca, Henri Nestle, Levi Strauss, Sam Walton (Walmart) and F.W. Woolworth.