Last week, the 10th anniversary DVD release of Toy Story hit retail shelves. A couple days from now, you can catch The Incredibles on television via Liberty Media Group's
Pixar may have faced some of the same issues that fellow Motley Fool Stock Advisor selection DreamWorks Animation
When you make a long-term bet on Pixar, you aren't just betting on the next movie (although even buy-to-hold owners would be disappointed by a flop since Pixar's portfolio is growing slowly, film by film). You're betting on its valuable library creating future revenue streams, small as that library may be today. You're betting on new formats. You're betting that at some point, every year will be a 10th anniversary of one film or another. The main risk here is that Pixar loses its touch and produces a streak of bad films: For a company with only a few films under its belt, that would be a problem.
It's hard to talk in strict quarterly earnings terms about a company like Pixar because its stream of income will ebb and flow with various periods when it releases movies. That's why these home video and pay-per-view markets are important in supporting the periods when Pixar doesn't have a tent-pole film in cinemas.
Pixar has great brand equity behind it, but I don't want to understate the aforementioned risk. Its batting average, while superb, could drop at any time. Who would have thought back in the day that Disney would at some point have trouble keeping up in the animated film business? For now, I see -- as best I can -- only good tidings for the company and its highly merchandisable offerings. No matter what, Pixar is going to collect some cool coinage off Woody and the gang even after a decade. Hopefully it'll be doing the same a little more than 10 years from now with Cars.
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