In Hollywood, directors yell "action" then "cut," so it's only natural to see life imitating art at Disney (NYSE:DIS). According to an article in Variety this week, the family entertainment giant is about to trim back its movie slate and release just eight live action films a year instead of 18.
Jobs will be cut too, though I'm obviously not talking about Steve Jobs here. The Apple Computer (NASDAQ:AAPL) chieftain that is now Disney's largest shareholder and has offered to sit on the company's board for free, will clearly be a fixture at the company over the next few years.
The report comes at an odd time. Disney's Pirates of the Caribbean: Dead Man's Chest set a new opening day weekend record by producing $136 million in ticket sales last week. However, with the Weinstein brothers taking their art-house success elsewhere and Disney stumbling badly in films that don't include pinup swashbucklers, taking a step back isn't outlandish.
Thanks to Disney's $7.4 billion Pixar buyout, the company's theatrical animation division is poised for a bright future. With Pixar's brains and Disney's merchandising brawn, it won't be long before filmgoers can trust the Disney brand in all of its animated fare. Live action is a different story altogether. There, Disney is often too stingy to follow rivals like Sony (NYSE:SNE) or Time Warner (NYSE:TWX) into big-budget productions.
Disney isn't cheap all of the time. When it believes in a property like Narnia or Pirates of the Caribbean, it will spend the dough necessary to lock in the blockbuster. A lighter slate will give Disney the luxury to spend more on fewer flicks, but that also exposes Disney to more risk if it puts out too many flops in a row.
Disney is doing so well in its bread-and-butter broadcasting networks and theme parks that it can afford to take a chance by scaling back its celluloid production. We will have to wait to see whether Disney makes this reported move official to fully weigh its implications, but it can't be an easy one with so many of Disney's hires toiling away on its live action revival.
Quiet on the set.
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Longtime Fool contributor Rick Munarriz is still a kid at heart, smitten over the right kind of animation. He owns shares in Disney. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
