Pixar's Punch

They say that Hollywood is too predictable. One can argue that the same applies to the computer animation geniuses at Pixar (Nasdaq: PIXR). They make an animated feature. It becomes a box-office smash all over the world. It then goes on to set a new DVD sales record.

So here is where we are with the company's current release -- Finding Nemo. It hits the home video and DVD market tomorrow. Its last flick, Monsters Inc., set the new benchmark when it moved 5 million copies on its first day. A few weeks later, it had become the best-selling DVD of all time on the strength of moving more than 25 million videos and DVDs.

So, don't be surprised when you come across reports of Pixar setting a new one-day record later this week and raising the bar on the all-time DVD mark in a few weeks. Why? Well, let's start with you. You know you're going to buy one. It has been the top-selling DVD on Amazon (Nasdaq: AMZN) over the past few days.

But let's look at the logic behind the prediction. The installed base of DVD players has grown over the past year. DVD owners are also more avid purchasers of new titles than VHS owners. And, yes, with nearly $339 million collected in domestic movie tickets this summer, Finding Nemo laps the $256 million that Monsters Inc. generated two years ago.

While you can consider this the no-brainer layup in psychic circles, don't go banking on this being a slam dunk for Pixar's distributor, Disney (NYSE: DIS). The two companies split the profits off Pixar's handiwork, but the days on that restrictive deal are numbered. Pixar, which has been another successful stock idea produced by our Motley Fool Stock Advisor, has just two releases to deliver under those terms, and it is already free to begin negotiating with rival studios.

So Disney finds itself in a peculiar situation. It stands to reap huge financial gains from Finding Nemo's success, yet that success is also Pixar's ammo in either seeking out a better deal or going it alone.

What will Pixar do? That, as it turns out, is the one thing about this fish tale that is not predictable.

Members of our Pixar and Disney discussion boards have been debating the ramifications of the distribution deal between the two studios. Does Pixar really have the upper hand? Does Disney have more to offer than other major studios? Should Pixar just go it alone? All this and more -- in the Disney discussion board. Only on Fool.com.