Forbes reports that Pixar’s stock fell almost 5% on the news that they were delaying the release of Cars by more than half a year. “Without Cars, Pixar next year must rely solely on home-video sales of the recent blockbuster The Incredibles when the DVD is released during the spring”. However, some observers believe the move may end up benefiting the company in the long run. Jessica Reif Cohen, an analyst with Merrill Lynch who downgraded Pixar’s rating and lowered her 2005 estimates for the company, said “We preliminarily estimate this move could increase lifetime film revenue by $50 million by exploiting seasonal factors, namely that summer theatrical releases play better during the weekdays due to the school recess, and DVD releases are more in tune with the holiday selling season”.
The Hollywood Reporter notes that another benefit of the move is that Pixar buys itself more time in its negotiations for a new distribution partner. Pixar “has said that it wants a new agreement in place with a studio 18 months ahead of its first release after Cars. Because Pixar had penciled in its first film after Cars for a November 2006 bow, it would have had to have a new deal set up by May. Now, with Cars set for summer 2006, Pixar’s first post-Cars movie will probably not roll out before summer 2007, leaving [Pixar CEO Steve] Jobs plenty of time to strike a new deal”.