According to a report in the Orlando Sentinel over the weekend, Disney (NYSE: DIS ) is gearing up to shutter its Florida animation studio. The flagship studio in Burbank will remain open and possibly take in some of the 260 animators that will be displaced, but one has to wonder what Disney is thinking.
Disney revolutionized animation with the release of Snow White, and set another benchmark when Beauty & the Beast was nominated for the Best Picture Oscar. When the Academy Awards tacked on the Animated Feature Film category three years ago it was safe to assume that Disney would be parked at the podium.
It didn't happen. Shrek snagged the first one. Spirited Away took last year's award. This time around Pixar's (Nasdaq: PIXR ) Finding Nemo is the runaway favorite. True, Disney acted as distributor for the last two winners; yet, its own trophy case is admittedly barren when it comes to in-house productions.
There's a popular notion that computer-rendered animation is driving out hand-drawn features; it's not. That particular misconception is mostly the handiwork of Pixar's success. It's the stories. Pixar's films would have worked just as well in ink and paint or charcoal on canvas or cave scribblings.
If the reports are true, the timing of the latest retrenchment is interesting. Perhaps Disney is much further along in its negotiations with Pixar to extend their partnership beyond 2005 than either company has let on. That would probably give Disney some room to scale back and ride the success of Pixar's future releases.
Meanwhile, the Disney-MGM Studios theme park in Florida continues the process of repositioning itself. Backlot tram tours through extensive props and sets and a walkthrough exhibit featuring a live animator studio have been scaled back in favor of thrill rides and an upcoming auto stunt show.
At least Disney can afford such lavish park makeovers. If it has an advantage, it's that traditional amusement park peers like Six Flags (NYSE: PKS ) and Cedar Fair (NYSE: FUN ) must pace their growth at more fiscally feasible levels.
The real question, however, is whether stripping down animation might not threaten the rest of the company. It might. Everything from theme parks to merchandising relies on a stream of fresh characters to cash in on. If Disney finds itself in a shoot out and someone yells, "Draw," the company may find one of its holsters empty.
Will Disney pay the price for closing down its East Coast animation studio or is it a worthy cost to shave? What will it take for Disney to reestablish itself as the undisputed leader in feature animation? All this and more -- in the Disney discussion board. Only on Fool.com.
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