As can be expected, a new cast will be needed. And therein lies the difficulty: Will a new generation of tweens take to a reboot of the franchise? And will the ones who have now grown out of the brand still be interested enough to sample the new flick when it hits their cable system? It's hard to say. I know I thought that a domestic gross of less than $100 million was disappointing for the third Musical. Plus, with the recent failure of the Jonas Brothers, I worry that the whole Disney Channel equity could be ready for a slide. No, I'm not certain that it will happen, but when it comes to the fickle nature of the youthful demographic, I don't think you can take anything for granted. There's always something out there that could suddenly capture the imagination of kids and their easily diverted attention spans. I'm sure Viacom (NYSE: VIA) is plotting as we speak to do whatever it can to take Disney's audience away. That company counts the powerful Nickelodeon cable network as a member of its media arsenal (you know, SpongeBob, iCarly, etc.). For that matter, you can't discount the efforts of a Time Warner (NYSE: TWX) or a News Corp. (NYSE: NWS). They could strike at any time with efforts aimed at the Disney-Channel eyeballs.

This is what Disney should do to keep the risk at bay on High School Musical 4: make it for the same amount as the first Musical, maybe even less (the budget on the first one was reportedly a little over $4 million). I'm not necessarily naive enough to think that will happen, but I know that a new cast definitely won't command the compensation packages of the old cast. Imagine how much you'd have to pay Zac Efron to be in a fourth Musical; I'm sure those negotiations would be long and hard on the Mouse. I just hope that Disney doesn't give in to the temptation of budget inflation. As each new Musical movie is made, the risk goes up. And with the DVD market experiencing troubles in terms of growth, that can make it difficult to amortize a high production cost. If Disney does keep the budget reasonable, then I think this is a worthy experiment. The Musical brand has value, and I think it's wise to bring the franchise back to the Disney Channel. There's no need to go the multiplex route. That would be too expensive, even with a new cast (especially with a new cast, since the risk of failing would be even higher at theaters). While shareholders watch their Disney stock go down with the rest of the market, and as they realize that, even at these depressed levels, it probably isn't a buy yet, they can at least have hope that a new Musical will bring in some cash next year. It's too bad Disney couldn't have put this on the fast track and have it ready for release in the current calendar year. How hard can it be to put one of these flicks together? Of course, as we all know, the Hollywood development process is achingly slow and inefficient. Anyhow, let's hope the fans are already prepping their Musical 4 parties.

Disclosure: I own Disney; positions can change without notice.