Pixar, Disney Deal Could Change Digital Landscape

LOS ANGELES (Reuters) – A possible merger of the Walt Disney Co. and Pixar Animation Studios Inc., if successful, could give Pixar chief Steve Jobs the power to break down barriers that have long existed between online content, computer hardware and digital distribution. The Wall Street Journal reported on Thursday that Disney was in talks to buy Pixar for $6.7 billion in stock, making Jobs – who is chief of both Apple Computer Inc. and Pixar – Disney's largest individual shareholder and possibly winning him a place on its board of directors. Jobs could conceivably exert his new-found influence at one of America's biggest content companies, which is home to ESPN, ABC-TV and Walt Disney Studios, to feed Apple's digital music and video download service iTunes. Media companies have been wary about Internet-based delivery of content because of problems with piracy, while personal computer makers have been eager to obtain more content to spur their own sales. Analysts were divided over whether a close association with Apple and its cutting-edge digital delivery system would juice up the value of Disney's extensive film and television library. Jupiter Research analyst David Card liked the idea of a Disney-Pixar tie-up, but said Disney does not need to buy Pixar to continue to expand its online relationship with Apple. "It's not as if Iger and Jobs don't return each other's calls now," Card said. "Jobs would bring a great addition to the Disney board that is not very tech savvy ... but the Disney guys are thinking about this (digital distribution) already."