Disney has for years followed a money-making formula. First, release a major movie like Aladdin. Then follow-up with one or more direct-to-DVD sequels (in this case, The Return of Jafar).

The sequels have been criticized for being poor in quality and in story-telling. I think that's a bit unfair. These sequels might have been inferior to the initial theatrical release, but evaluated on their own merits, they are not bad, and certainly better than much of the animated fair out there.

Still, you can't really evaluate a Disney production that way. Any given Disney effort will always be compared to other Disney projects, especially sequels.

Given that these sequels were often strongly criticized created a lot of tension between the artistic and the financial. Why? Because these sequels, regardless of their technical and artistic quality, were huge moneymakers for Disney.

I should know. We've got more than a few here for the kids.

So it is with interest that I read that these direct-to-DVD Disney sequels will no longer be produced:

In a major strategy shift, the Walt Disney Co. said it will stop making lucrative direct-to-DVD sequels of such classic animated films as "Cinderella," a move that reflects the growing influence of former Pixar Animation executives John Lasseter and Steve Jobs, who once called the films "embarrassing."

The change comes with a shake-up at the company's DisneyToon Studios, including the removal of longtime president Sharon Morrill, who will continue with the company in another capacity, Disney said Friday.

DisneyToon Studios will become part of Walt Disney Feature Animation and report directly to Animation President Ed Catmull and Lasseter, who assumed roles there after Disney bought Pixar Animation Studio last year for $7.4 billion in stock.

Given the quality of home theatre systems, it's not clear to me that a direct-to-DVD sequel needs to be less visually stunning than a proper theatrical release. But it seems to be the case that these direct-to-DVD sequels did aim for lower quality.

So now we'll have fewer movies on DVD, but all original productions with original stories. That's a lot to invest in a DVD. Normally that sort of investment is reserved for a theatrical release, where the theatrical run represents both revenue that recoups the money put into the project as well as advertising that drives DVD sales (including sales of the DVD sequels) by creating built-in interest for the story and the characters. An original release that only appears on DVD won't benefit from that synergy. It will have to recoup the costs entirely on its own, while at the same time trying to drum up interest in parents and kids for a story and characters that are unfamiliar.

To be successful, therefore, Lasseter will have to develop a means by which these direct-to-DVD productions can be made for a lot less, in order to preserve the profit margin when sales might not be as robust as they were for the sequels.

I expect a lot more computer-generated toons (either 3D or computer-generated analog to traditional cel animation) instead of labour intensive traditional cel animations.

What isn't clear to me is whether this new direction precludes DVD-only series. Disney will no longer create direct-to-DVD sequels of their theatrical releases, but Disney will create sequels as long as the sequel enjoys a theatrical release like the original -- that is clear. But will Disney create DVD-only series that use the same characters and settings throughout the series? Being only for DVD, there is no "theatrical parent" that highlights the difference in quality in the sequel. Every release in a DVD-only series would be equally good (or bad). That ought to eliminate the "embarrassment" factor.

The fact is, I like sequels. If done right, sequels can jam in a lot of storytelling, since much of the introductory and expository investment from the original doesn't have to be repeated in the sequel. Moreover, characters can grow and change through a series. Not all sequels do it well, but it has been done before, especially when the writers envision a continuation even before the first word of the first release is written. And if Disney animation is going into computer animation in a big way, then reusing those expensive-to-develop character definition files is going to be important to make the business work.

I'll be interested to see how this goes.