algebraist's Journal: "If we don't ..., the pirates will."

If we don't provide consumers with our product in a timely manner, the pirates will.

With those words, Michael Eisner, CEO of the Walt Disney Company, announced an about face in their approach to digital programming and technologies, embracing it, and competing with pirates on their own turf.

The context was the 2003 convention of the National Association of Broadcasters in Las Vegas, NV. The most concrete example of Disney's new found faith was their announcement of Movie Beam, a new service that will allow consumers to receive on demand high-quality versions of motion pictures using a set-top box.

I say IT'S ABOUT TIME!

Perhaps this is a result of belated wisdom, or perhaps the threat of Pixar leaving the lucrative partnership with Disney was simply getting too much, but Eisner sure sounds like he got that ole Steve Jobs religion in contrast to his earlier bitter statements. If so, it would be a big come-down for Eisner, considering the recent bleak relationship between Disney and Pixar, and Mr Eisner's reputedly large and sensitive ego.

If Pixar doesn't leave the partnership, Disney, its stockholders and fans will, IMO, owe a big debt to Steve Jobs for turning this around and perhaps in the process teaching Mr Eisner that technology is crucial in both the future of entertainment and for the Walt Disney Company, a lesson which Disney should never have forgotten. Walter Elias Disney himself said new entertainment.technology, such as color television, never really replaced existing media, only provided additional ways of telling stories. Steve Jobs also might have taught Eisner some humility, something Jobs learned the hard way.

Here was part of my take on Eisner and Disney about a month ago as posted on a discussion board at the exquisite unofficial Disney site, laughingplace.com:

... I think the solutions have been widely proposed here and elsewhere: Invest more cash in the theme parks and on the entertainment Disney is supposed to be great at making rather than spending it on cute acquisitions.

I do not know the company's cash situation or flow, since that is closely guarded. Obviously, too, it's harder now to justify such spending during travel recession and when major companies are abandoning exhibits and pavilions left and right.

But the point was to forestall that by improving the parks and creating an environment where companies would either want to stay or where other companies in better financial shape would see a great opportunity in sponsoring exhibits.

As far as "knowing Eisner" goes, no, I do not know him. However, I fail to see how Mr Eisner's personality has any relevance with how a prospective investor evaluates him, apart from the hypothetical case where a CEO simply doesn't get along with their board of directors or other management because of it.

And, whether Mr Eisner likes it or not, digital technology is going to mow other kinds of entertainment down, not because it is inherently better or more entertaining, but because more can be done with it at less cost in people and fixtures. Mr Eisner should be courting Pixar, not letting them go off on their own. Steve Jobs should be asked to be on the Disney board, not implicitly criticized for managing companies which steal money from Disney.

Folks talk about the dot-com trend having bombed, but I don't see anything changing or slowing about digital technology. If anything, prices for it are plummetting, partly because of the dot-bomb phenomenon.

Maybe Disney was too early in the GO.com phenom, but that technology is beginning to pervade everything. What Disney needs is leadership in this area, not excuses or complaints.