So everybody's all abuzz about the news that Pixar and Disney are splitting up. What's my opinion? I think that it's kind of sad, really, for everyone involved. Both Pixar and Disney are going to be hurt by this in some way, shape or form – but I suspect that Disney's going to really take the brunt of it. And that saddens me.

Sure, Disney has come to be perceived as an evil empire on par with Microsoft, but it's still depressing to imagine a world without Disney. Further, it's pretty darn depressing that Disney has come to be perceived this way. Therefore, in the tradition of my earlier essay Fixing AOL, I'd like to offer some thoughts on how to revitalize the House of Mouse, and maybe bring back the wonder and joy that I remember from when I was a kid.

Step 1: use the marketing juggernaut for good

There's been a lot of cheering for Pixar in this split, but not a lot of people are asking how much value Disney actually brought to the initial contract. People are likening Pixar to Luke Skywalker and Disney to the evil empire, but would Pixar be as successful as it is today without Disney's help?

Yes, it's disturbing that Pixar had to give Disney such a high percentage of their profits, when all Disney was essentially doing was marketing and merchandising Pixar's works of art. But the value of those services are in reality nearly incalculable. Sure, Shrek and Ice Age made a ton of money in the theaters, but they arguably haven't made anywhere near as large of a cultural impact as Toy Story. Was that because Toy Story was just a better movie, or because there wasn't the avalanche of Shrek and Ice Age toys, cartoons, plush dolls, Happy Meals, and so on and so on?

When trying to analyze something like this, it's difficult to separate the quality of the product from the success of the marketing and merchandising. For example, the best Star Wars stories from my childhood were told when we were sitting on the living room floor and acting them out with our action figures. Sure, there were these three great movies that planted the seeds in our minds and set the stages, but the really great stories were the ones that we made up ourselves.

In the old days, legends and fairy tales grew in the retelling from storyteller to storyteller – now, we've lost that form of amplification-in-retelling thanks to radically better media and copyright laws. These days, modern fairy tales are initiated in the core media event (a film like Toy Story or a book like Harry Potter and the Sorcerer's Stone) and then amplified virally through the use of toys, cartoons and other merchandise. Would Harry Potter be such a phenomenon without the films and toys? Possibly – but the closest things out there, the Lemony Snicket books or the His Dark Materials trilogy, don't have nearly the same merchandise or the same market penetration. Both have movie adaptations on the way, so it will be interesting to use them as barometers of this theory.

People can argue that the merchandise isn't necessary, and even cheapen the original experience. But toys are avatars of young imaginations. Kids don't need more and more canned stories, they need to tell their own. And action figures help with that. Sure, they're not necessary, but they do help – and when the business model is to insert your characters into the mass psyche in order to drive demand for more stories and product based on those characters, that helps. And this is not as insidious as it sounds. Storytellers need to eat. Storytellers freed from worrying where their next meal is coming from can focus on their art. Do I think John Lasseter was driven by an insidious plot to get rich off of controlling the minds of the world's youth? Not for a moment. Do I support the idea of Mr. Lasseter having the time and money and creative freedom to tell the stories he wants to tell? Absolutely. So, step 1: use the Disney marketing juggernaut for good, to spread the characters and stages to kids everywhere in order to seed their imaginations, fuel their own new stories, and financially support our storytellers.

Step 2: ditch the formulas

The success of Pixar is no mystery. It boils down to one thing: really, really great stories. There are some amazing minds at work over at Pixar – John Lasseter and Brad Bird, among them. These people are artists and storytellers. Trying to shoehorn in cuddly little toys and chirpy sidekicks aren't necessary – they know what makes a great story and a great cast, and have done amazing jobs without resorting to formulas.

What's especially dense about Disney's current formulaic hero-and-sidekick-and-villain approach is that almost none of the classics needed it. Mickey Mouse didn't have a sidekick, he had interesting secondary characters in Donald Duck and Goofy and Minnie and Pluto. Neither did Snow White – she had seven secondary characters with fun, indentifiable personalities. Winnie-the-Pooh (note, another creation of a non-corporate storyteller) didn't have a villain. This is not to say that the formula can't work. Aladdin is a great example of a formulaic film that blew the doors off the place – but that was due to the bombastic energy of Robin Williams. And here's the kicker – Robin Williams was that movie's John Lasseter. The script for Aladdin was okay, but it was all the creative leeway they allowed Robin Williams that really made that film. Again, stand back and let the storyteller do his job.

Now let's consider the recent stuff that has just flopped, and why. Pocahantas was the movie that really kicked off the Disney divebomb. They added a bunch of superfluous stuff to what should have been a fascinating movie about American history. This movie didn't need any chirpy little sidekicks, but it got 'em anyway. Where was Katzenberg when we needed him?

A few years later, we got Atlantis, which was a neat story but lacked any main personality. There was no real storyteller behind Atlantis, just a bunch of pretty bland characters running around in some neat Jules Verne-like sets. Would Jules Verne have been an excellent muse? Sure, but by the time the movie was done it was so diluted and crammed into a Disneyfied formula that it was uninteresting. Similarly, look to Treasure Planet – Robert Louis Stevenson doesn't need cyborgs. A big, rollicking, fun and swashbuckling pirate movie could have been a fantastic success – a fact we saw realized shortly afterward in the amazingly successful Pirates of the Caribbean.

As far as I've heard, Disney wasn't doing a lot of creative leaning on Pixar in the creation of their flicks, just letting them do their thing. Which, not-too-incidentally, is the same laissez-faire attitude Steve Jobs takes in his CEOship of Pixar. This leads one to suspect that the best thing that a studio or CEO can do is to forget the market research and leave the storytellers alone.

Step 3: nurture the young independent filmmakers

Recently, we've seen a huge increase in the technology available to young filmmakers. This is allowing all kinds of young independent creatives to make feature-quality projects out of their dorm rooms. One excellent example is Richard Linkletter's Waking Life, an animated film produced on an absolute shoestring of a budget thanks to some high-tech rotoscoping. Another source of new animation talent is emerging from the Flash community. Online animations are popping up all over, and it's only a matter of time before the first feature film is produced using a $300 off-the-shelf piece of software.

If you take the previous two steps and follow them out to their logical conclusions, the best way to save Disney is to allow it to morph into the greatest showcase for independent creative animation the world has ever seen. Disney has had remarkable success lately with its partnerships with Pixar and Hayao Miyazaki (of Princess Mononoke and Swept Away). Perhaps the deal with Pixar fell apart because it had to – once an animation studio has reached a certain level of maturity, it can go out and find its own success. Disney shouldn't necessarily feel threatened by this. As long as they've been doing their jobs and nurturing young imaginations to become another generation of storytellers, the supply of new material should be endless.

In short, Disney should reconfigure itself into an incubator for new voices in animation. They should continue to do what they did with Pixar, and even Tim Burton (who started out at Disney) – go out looking for new talent, give them a place to try out their voices in exchange for a cut of the profits, and allow them access to the marketing juggernaut. if you can strike a good deal with them to continue your partnership afterwards, fantastic – but if not, you still have a good back catalog of material to provide residual royalties. (What I don't think they should do is create new spinoffs without the original storytellers, which would be a direct violation of step number two; I think the upcoming Toy Story 3 is going to be an utter abomination without John Lasseter at the helm.)

The House of Mouse and 1,000 others

There will most likely never be a world without Mickey Mouse, but a world where Disney is no longer a major player in the cultural-storytelling scene is still pretty depressing. And, like it or not, that's what they are – a giant behemoth of a storyteller, largely responsible for spreading the myths of our childhood from generation to generation. Snow White, Beauty and the Beast, Aladdin... All of these are modern-day classics. Love it or hate it, Disney is one of the greatest modern-day storytellers in the business.

Disney is faltering because of its ill-considered desire to provide "safe" entertainment, perfect little spheres of movies without any real personality or thrill. The current Disney empire would have never created Harry Potter because they wouldn't have dared to risk offending the religious right, and they probably wouldn't have come up with Finding Nemo on their own because a story about an overbearing father learning how to relax his grip on his son isn't, well, Disney. Jeffrey Katzenberg was the driving storyteller behind The Lion King and Beauty and the Beast, and looked what happened to him. By consistently playing it safe and shackling creatives to studio formulas, Disney has killed the scary, dangerous, spark that makes stories interesting, what makes them real.

To remain relevant and keep their lead, Disney needs to step back and learn how to remarket itself into a benevolent benefactor for young artists, not as an evil empire consistently churning out formulaic schlock. The technology is growing so that a new generation of young voices can tell their own stories. This is fantastic. Instead of resisting it and trying to rehash formula after formula, Disney should embrace these new voices, take some chances and start some careers. Just as with Pixar, I believe they'll find it's a very, very lucrative way to go... Even to infinity and beyond.

Background reading

For more information and the general buzz on the scene, please check out the following.
Check out the following:

• CNN: Is Apple-Pixar combo a Jobean task?
• CNN: Disney could gain from Pixar loss
• Wired: Pixar Says 'So Long' to Disney
• The New York Times: Pixar Sees End to Its Disney Partnership