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Disney's New Buzz

Animation is king again at Disney (NYSE: DIS  ) , even if the Mouse House has largely replaced ink and paint with computer pixels.

The family entertainment giant laid out its slate of animated flicks for the next five years. Like rival DreamWorks Animation (NYSE: DWA  ) , Disney is committed to putting out two theatrical releases a year.

It's also aping DreamWorks Animation by planning to screen 3-D enhanced versions of its flicks, as well as putting sequels back on the production pedestal.

That last point is important, because Toy Story 3 (coming in 2010) and Cars 2 (in 2012) should be huge for Disney, especially now that it owns all of Pixar. And since Pixar's proven dream team is behind these efforts, you know that these will be quality flicks, instead of the low-budget filler that Disney settled for earlier this decade. Those brand-diluting knockoffs hosed down the reputation of Disney's classics, to the point where it needed a Pixar transplant to remain relevant.

Disney is also kicking off a few direct-to-DVD releases. Don't cringe. These won't be the shoddy sequels that devalue its bankable characters. Disney is using this platform for its more tv-centric brands, like Disney Fairies and DisneyToon Studios.

Animation is big business these days. It starts at the multiplex, where the shift to 3-D or premium screen deals like the one DreamWorks Animation has in place with IMAX (Nasdaq: IMAX  ) milk more out of every release. Now that Blu-ray has established itself as the next-generation platform of choice, quality animation is an upgrade sale, given its replay value with kids.

Successful characters also create opportunities for vibrant online communities. Kid-friendly companies like Mattel (NYSE: MAT  ) , Disney, and even Build-A-Bear Workshop (NYSE: BBW  ) are throwing their hats into that ring.

This doesn't mean that every Disney film has to be a hit. With its firm commitment of putting out two new films a year, it can bounce back quickly after a flop, while milking its winners through the incremental revenue channels.

Yes, animation is king again at Disney. This time, the emperor has both a new groove and plenty of clothes.

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