Genie Grants Disney’s Video Wish : Marketing: Robin Williams will reprise his ‘Aladdin’ role in ‘King of Thieves,’ continuing the emergence of direct-to-video projects as an industry gold mine.

The Walt Disney Co. has put the genie back in the lamp.

Despite a well-publicized fallout with the studio over the use of his voice in the 1992 blockbuster “Aladdin,” Robin Williams will reprise his role as the big blue guy for “Aladdin and the King of Thieves,” a new animated film scheduled for release next year on home video.

Williams’ participation in the project--word on the Disney lot puts his salary near $1 million--signifies the emergence of motion pictures produced exclusively for home-video distribution as a powerful new aspect of the entertainment business.

Based on last year’s success of “The Return of Jafar,” the first “Aladdin” sequel that took the industry by storm with $150 million in profits, Disney plans to use a high-profile slate of titles and talent to turn “direct-to-video” movies into a major revenue stream.

By next year, a market now populated by low-cost action flicks and erotic thrillers will be competing with “Honey, We Shrunk Ourselves,” starring Rick Moranis in the second live-action sequel to the hit family film, “Honey, I Shrunk the Kids.”

In 1997, there will be an animated sequel to “The Lion King,” the highest-grossing animation film of all time, and an original “Winnie the Pooh” movie. Other Disney titles under direct-to-video consideration are possible sequels to “Homeward Bound,” “The Mighty Ducks” and virtually every Disney animated project released from this day forward.

For example, the studio’s coming live-action theatrical remake of “101 Dalmatians,” directed by John Hughes, will be followed by the video division’s re-release of the original Disney animated film and then a direct-to-video movie from the TV animation division, if all goes according to plan.

“ ‘Return to Jafar’ was a marketing idea and a product idea that really, to our great pleasure, received support from the entire Disney company,” said Anne Daly, president of Buena Vista Home Video, who eventually would like to release three or four direct-to-video projects annually. “The video business has always been an afterthought, but there was a real belief in the future of a video business that had the potential to be a first-run market.”

Disney is not the only studio getting into the video act by cashing in on its previous hits. MCA Home Video plans to release a sequel next year to the cult science-fiction movie “Tremors,” with Fred Ward and Michael Gross back from the original movie. MCA is also readying its second home-video sequels to “The Land Before Time,” an animated children’s film, and the live-action thriller, “Darkman.”

But “Jafar” set the standard for the rest of the industry. When Disney rushed out what was initially conceived as a TV movie, it was regarded as something of a trial balloon. Dan Castellaneta, the voice of Homer Simpson, stood in for Williams as the genie. Although consumers could rent the title, it was intended for consumer purchase with a suggested retail price of $22.99.

Ten million copies have flown off store shelves, ranking “The Return of Jafar” among the 15 top-selling videos of all time. In the end, the musical, produced for a song through Disney’s TV group, was more profitable than the studio’s top-grossing, live-action movie, “Pretty Woman.”

“Once ‘Jafar’ hit the street, the course of the video industry changed,” Daly said. “Its success focused the attention of this company, with all its divisions, on the whole direct-to-video category. We have the ability now to put more time and attention into the creation of these, and I think that will be reflected in this next ‘Aladdin’ movie.”

Enter Williams, who once said he would never work for Disney again.

The actor received scale of $75,000 to do “Aladdin” because he wanted to be part of Disney’s animation tradition. The film went on to gross $500-million worldwide, and the studio gave the actor an original Picasso as a gift. But Williams blasted Disney for lying to him and breaching an agreement not to use his voice to merchandise products inspired by “Aladdin.”

After a yearlong feud, Williams did make up with the studio when he received an apology from newly installed movie chief Joe Roth. The comedian is currently in Northern California filming “Jack,” a Disney movie--through its Hollywood Pictures division--directed by Francis Ford Coppola.

The video division’s marketing department suggested bringing him in for “Aladdin and the King of Thieves.” Williams, who could not be reached for comment, recorded his voice session over the summer.

“This one he did not do for scale, believe me,” said an animation source at Disney, noting that Williams’ feature-film salary is now in the $15-million range. And he was promised anew that his voice will not be used to merchandise “Aladdin” products.

Although Disney may develop projects that aren’t sequels for direct-to-video movies--such recognizable titles as “Frankenstein” and “Beowulf” are under consideration--most of what it is looking at now are based on hit titles.

“There are a lot of ideas being explored,” Daly said. “But candidly, they have to be ideas that hold weight, because this is a new business. We’re asking consumers to go to video stores to buy new first-run movies. You’re changing entertainment patterns, and it has to be worth it.”

In the case of a Disney franchise such as “Aladdin,” with toys, record albums and a TV series, a video sequel builds the value of the franchise.

The direct-to-video category could help grow an already thriving video industry--a $14.9 billion business last year that pulled in more consumer dollars than theatrical movies, audio tapes, CDs and video games.

For the direct-to-video niche to prosper, executives involved agree that the key is maintaining the creativity and quality of the productions.

“From a marketing point of view, there’s tremendous challenges,” said Louis Feola, president of MCA Home Video Inc. “You’re competing with front-line theatrical product. You’re trying to cut through all of the other non-theatrical product. So what you’re trying to do is build an expectation and satisfy that expectation to the consumer.”