Disney ditching its direct-to-DVD sequels

June 29, 2007

LOS ANGELES -- In a major strategy shift, the Walt Disney Co. said it will stop making lucrative direct-to-DVD sequels of such classic animated films as ''Cinderella,'' a move that reflects the growing influence of former Pixar Animation executives John Lasseter and Steve Jobs, who once called the sequel franchises "embarrassing.''

The change comes with a shake-up at the company's DisneyToon Studios, including the removal of longtime president Sharon Morrill, who will continue with the company in another capacity.

DisneyToon Studios will become part of Walt Disney Feature Animation and report directly to Animation President Ed Catmull and Lasseter, who assumed roles there after Disney bought Pixar Animation Studio last year for $7.4 billion in stock.

That deal made Jobs, the former Pixar CEO who also runs Apple Inc., Disney's largest shareholder and brought him a spot on Disney's board.

DisneyToon will now only produce original DVD films, including an upcoming film starring the fairy Tinkerbell from "Peter Pan." It is not clear yet whether sequels that are already in production, such as ''Cinderella III,'' will continue.

Disney has been a leader in the direct-to-DVD category, selling millions of copies of such films as "The Lion King 1½" and ''Bambi II.''

Although those DVDs were moneymakers for the studio, Disney purists scoffed, including Lasseter and Jobs. In a 2003 conference call with financial analysts, Jobs said how much he hated the DVD sequels. ''We feel sick about Disney doing sequels,'' Jobs said. ''If you look at their quality, it's pretty embarrassing.''

AP

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