Friday, October 20, 2000

"R" Rated Clips Found on Toy Story 2 DVDs!!!
by Joe Tracy of Animation Artist Magazine


Walt Disney Home Video is in crisis management mode today after learning that some of the Toy Story 2 DVDs released as part of the "3 Disc Ultimate Toy Box Collector's Edition" contained scenes from the "R" rated movie High Fidelity.

One of the first reports of the problem came from an Animation Artist Magazine reader, Paul Naas, who posted on the Animation Artist Forums some "weirdness" with his copy of the Toy Story 2 DVD on Wednesday. "None of the supplemental material would play and my DVD player would register a disc error," says Naas. "So we decided to watch the movie, and right after Jessie's song, Toy Story 2 stopped playing and we were dropped into the middle of High Fidelity, just in time to hear some character use the F word twice in 15 seconds. After one clear scene, High Fidelity continued with so much video noise that the characters looked like they were in the video witness protection program."

The problem has also been confirmed by many people who purchased the collector's 3 disc set at COSTCO stores. According to ABC News, "A senior executive for Walt Disney Co., which is the parent company of ABC NEWS, declined to comment other than to say the defective DVDs were a 'duplication error.'"

Technicolor, who duplicated the DVDs for Disney, released an official statement saying, "Technicolor has identified and is investigating a manufacturing defect in part of the Disney three-disc DVD set, 'Ultimate
Toy Box.' The problem exists in only a small percentage of the three-disc DVD packages and is limited to a specific isolated region of the United
States."

Technicolor is the world's largest independent manufacturer and distributor of videocassettes, CDs and DVDs.

An investigation is being launched into the cause of the incident. While
the 3-disk set has been pulled from most store shelves, including Costco where the problem was most reported, it is still being sold on Amazon.com (which may have versions free of the defect) as of this writing on Thursday
night.

The repercussions over this incident may not only hurt Disney, but also Pixar, which is holding its annual Shareholders meeting next Thursday in
San Francisco. In 1997, Pixar entered into a coproduction agreement with
Disney to produce five original animated productions. Toy Story 2 was one of the five.

Under the terms of the agreement, and according to Pixar's 1999 Financial Information booklet sent to Shareholders, "Pixar and Disney agreed to cofinance the production costs of the pictures, co-own the pictures (with Disney having exclusive distribution rights), co-brand the pictures and share equally in the profits of each picture and any related merchandise and other ancillary products, after recovery of all marketing and distribution costs (which Disney finances), a distribution fee paid to Disney and any other fees or costs, including any participations provided to talent and the like."

Any costs associated with the recall, reduplication, and other costs could take away from the amount that both Disney and Pixar make on the distribution unless all costs are covered by Technicolor.


Joe Tracy is the publisher of Animation Artist Magazine and the author of the book Web Marketing Applied.