Apple and Disney Make Nice

The once-chilly relationship between Apple Computer (Nasdaq: AAPL – News) and Disney (NYSE: DIS – News) continues to heat up. Disney announced that it would be selling even more video downloads through Apple’s iTunes storefront than the parties had agreed to back in October. At the time, Disney helped give Apple’s new video-enabled iPod immediate credibility by making its hit ABC shows Lost and Desperate Housewives available as commercial-free downloads.

Yesterday, Disney backed up the content truck all the way to Cupertino. Video iPod owners will now be able to purchase a wider spectrum of content from ABC, ESPN, Disney Channel, and SOAPnet. From condensed college football bowl games that were broadcast on ABC this week to classic animated shorts from Disney’s thick vault, Disney isn’t holding back.

Yes, Disney’s first offerings have been selling briskly on Apple, but that will be tested as more content fills the virtual iTunes shelves. The bigger reason this may be happening is because Disney CEO Bob Iger is bending over backwards to make sure he’s in Steve Jobs’ good graces. Why, you ask? Well, it could have something to do with the fact that Jobs also happens to own a majority stake in Pixar (Nasdaq: PIXR – News).

Pixar and Disney have had a lucrative partnership that’s scheduled to come to an end after the release of Cars come May. At one time, the icy relationship between Jobs and former CEO Michael Eisner made it highly unlikely that the companies would keep working together in one form or another. Eisner was publicly incensed over Apple’s “Rip, Mix, Burn” marketing campaign and had even downplayed Finding Nemo, a film that wound up being Pixar’s highest-grossing release.

Iger has gone to great lengths to rebuild the bridge that Eisner burned down. Helping Apple to Disney’s valuable content library is a good move for both companies, but it may help Disney’s future content library if it means that Jobs and Iger are warming up to the point where they can continue their productive relationship in one form or another.

Even though Disney did have a respectable animated hit in Chicken Little, it has been no match for what Pixar and DreamWorks Animation (NYSE: DWA – News) have been generating at the box office.

It should come as little surprise to find that DreamWorks Animation and Pixar have both been Motley Fool Stock Advisor recommendations. The wider availability of titles on Apple’s iTunes store should also benefit Rule Breakers pick Akamai (Nasdaq: AKAM – News) as a partner with Apple in transmitting downloads more quickly and reliably.

Yes, it’s becoming one big lovefest between Disney and Apple these days. And to think, it was an apple that was the poisoned fruit of choice in Disney’s first full-length feature film, Snow White.

Yep. Everyone is Happy these days.

Longtime Fool contributor Rick Munarriz thinks that an Apple a day will help keep the short sellers away. He does own shares in Pixar and Disney. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow’s ultimate growth stocks a day early.


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