linkage gets a follow-up

Back in April, I made an annoyed post about how Wall Street types were wringing their hands over Up — not because they thought it would be a flop, but because they didn’t think it wouldn’t be an even bigger hit than everything else Pixar has ever done, and therefore investors should abandon that obviously sinking ship. Or something.

Well, it’s slightly gratifying to see a follow-up in the New York Times, featuring this line: “Dead wrong” is how Richard Greenfield of Pali Research put his related analysis in a research note. In other words, Up has done just fine, thank you, where “just fine” is defined as “raking in profits your average studio would be breaking out the champagne for.” (He’s still recommending people sell Disney stock — but that’s based on issues with broadcast TV and the theme parks.)

It doesn’t address my underlying issue, which was the idea that every movie Pixar makes has to reap a bigger harvest than the one before it, or it’s time for investors to bail. From my perspective, Greenfield wasn’t wrong because Up turned out to be a bigger earner than he forecasted; he was wrong because he acted as if the sky was going to fall if it only made a good profit rather than a spectacular one. I still find the insistence on nothing but constant growth to be unsustainable. But at least the guy has issued something of a mea culpa.

0 Responses to “linkage gets a follow-up”

  1. querldox

    On the other hand, I don’t recall seeing much Up merchandise, so from a ancillary product money making perspective, it probably was a disappointment. By this, I mean that the very story of the movie didn’t lend itself well to doing such, which Pixar is clearly “eh” about but business types probably lament.

  2. akirlu

    It isn’t just Pixar, of course. And yes, the whole notion of investors divesting (and stocks tumbling) because a company made modest profits, or is simply is not as wildly over-the-top profitable as Wall Street itself predicted is a completely nutso model of investing. Madcap Las Vegas-style speculation has still too great a part in the behavior of so-called investment firms. At last, did the crash that led to the Great Depression teach us nothing? Alas.

  3. moonandserpent

    Every release in every industry is expected to do the same. It’s this philosophy that is, in large part, behind many of our recent fiscal troubles. Everyone’s market-share is supposed to grow every fiscal year… with a theoretically limited amount of capital to be moved around.

    And internal hubub is that Disney fought for UP to not get made, because Disney makes far more on licensing than it does from its films and there’s nothing to market with UP. Look at the Princess and the Frog; a movie made by Disney’s own admissions for no other reason than to introduce a black princess into their cash cow, the Princess brand.

  4. kurayami_hime

    I still find the insistence on nothing but constant growth to be unsustainable.

    And it also leads to securities fraud. Isn’t it easier to fudge the numbers to keep people happy than to watch your company crash and burn because it’s not doing as well as those people think it should be?

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