Pixar’s innovative approach is in stark contrast to The Walt Disney Co., distribution partner for the animation studio. The pair recently announced that they won’t be renewing their current distribution deal when it expires at the end of 2005 — a move precipitated by Pixar and, rumor has it, tied to the controversy over embattled Disney CEO Michael Eisner.

While Pixar needed Disney when it first started making feature films, its string of hits proves that Disney probably needs Pixar more at this point. Pixar can likely put together a more advantageous deal elsewhere. Meanwhile, Disney will be left to squeeze out endless sequels of past Pixar properties for which it holds the rights. It’s an ironic situation, and someday moviegoers may liken this period of Pixar’s history to the early days of Disney.

Whereas Disney made its mark as a pioneer in cell animation, Pixar blazed a new trail in the world of computer animation from its inception as a business unit of Lucasfilm. After several years of producing shorts and commercials, Pixar released Toy Story in 1995. The first film under the Disney distribution deal, it earned US$ 362 million at the box office worldwide, firmly cementing the brand’s image as the producer of innovative animated films. The company also went public that year, raising US$ 140 million in its IPO.

A string of hits followed, including “A Bug’s Life,” “Toy Story 2” “Monsters Inc.” and “Finding Nemo.” “Nemo” racked up more box office dollars than any animated film in history. Pixar’s success now allows them to bring in outside filmmakers, which will likely expedite film release output in the future.

Of course, Pixar’s other strength has always been in its ability to grab top-rate voiceover talent, from Tom Hanks and Tim Allen in the “Toy Story” films to Billy Crystal and John Goodman in “Monsters Inc.” Equal in talent to the company’s beautiful computer-generated images, the voiceovers leave moviegoers with lasting impressions of memorable characters.

But no brand’s future is certain, no matter how rosy the current conditions are (see Atari’s meteoric rise and fall in the 1980s, for example), and Pixar certainly has some potential problems on the horizon.

First, the company must secure a deal with a new distribution partner. It’s certainly in much better shape now to dictate terms and conditions than at the beginning of its relationship with Disney. However signing a new partner leaves the company vulnerable to negotiating mistakes. Pixar would do well to hang on to the merchandising pie, as well as control over sequel rights.

This segues into the second issue: Disney owns the rights, including the ever-important merchandising and sequel rights, to all the films Pixar made during the term of the distribution agreement. This means that the company can’t bank on a “Toy Story” or “Finding Nemo” sequel if the creative well ever runs dry. In fact, Disney already has “Toy Story 3” in the works with its own team of animators and will likely pump the remaining Pixar films for all they’re worth.

The third concern involves the mileage of anthropomorphism. Pixar’s had talking toys, bugs, and fish; the to-be-released “Cars” will introduce talking automobiles. Disney now has the rights to all these characters, and Pixar will have to find fresh areas to explore. Anthropomorphism is an easy way to create engaging characters that audiences can relate to, but there are only so many creatures and inanimate objects that lend themselves well to such a process. Could Pixar work the same magic with talking ballpoint pens?

This is a crucial period in Pixar’s history, but it certainly seems to have the right people in place. Chairman and CEO Steve Jobs turned Apple’s fortunes around, so there’s no reason why he can’t steer Pixar along the right path. Executive vice-president of creative John Lasseter is credited as the force behind many of the projects. A brilliant storyteller, Lasseter appears to be a genuinely warm, personable guy with whom people love to work. President Ed Catmull won an Academy Award for his work on RenderMan, Pixar’s proprietary computer program that helps create the digital effects.

Pixar certainly looks to be right on track. Ironically then, the trick is to avoid becoming another Disney.

Brad Cook is a freelance writer based in Sunnyvale, CA.