As a Disney (NYSE: DIS) shareholder, the High School Musical juggernaut is important to me. It means money for the company. It means a point of distinction for Disney that adds value to its content and differentiates it from other media businesses such as News Corp. (NYSE: NWS) and Time Warner (NYSE: TWX). It means that tweens have something realistic to relate to that reflects their own days of breaking out in song while walking through school (okay, that was a joke).

But I was disappointed to hear that a reality show extension of the brand is having a tough time in the ratings. According to this blog post at The Hollywood Reporter, the show, called High School Musical: Get in the Picture, had the worst ratings on Monday night. It's some sort of competition show with a prize related to being in some sort of video in the Musical franchise.

I'm not sure of the specifics, but my main concern is that it couldn't offer any competition to CBS (NYSE: CBS) or General Electric's (NYSE: GE) NBC. Remember, Disney's big model is to take its content and spread it around to enhance the value of the company's other platforms. It's all about the synergy. Unfortunately, it didn't work this time. I honestly thought that ABC would have seen huge numbers from the kids on this one. It makes me wonder if Musical might be getting long in the tooth.

Credit Suisse downgraded Cisco (NASDAQ:CSCO) to "neutral" from "outperform", according to Briefing.com. The news service also reports that Caris initiated CBS (NYSE:CBS) with a "below average", and set an $18 price target.

Clearwire (NASDAQ:CLWR) Started at Outperform at RBC Capital, according to 24/7 Wall St. The financial website also claims that CSX (NYSE:CSX) was raised to Buy from Neutral at Merrill Lynch

General Electric (NYSE:GE), which reports earnings tomorrow, has indicated that it may spin-off its weakest divisions -- the firm's consumer and industrial units. No one cared, and the stock did not move. The action would not be enough, nearly enough to pull GE away from its multi-year lows.

What investors would really like to see is GE broken into little pieces, the smaller the better. The only growing and hardy business that GE has now is its huge infrastructure operation. It would make a nice stand-alone company.

The unit that investors most want to see GE kick out the door is NBC Universal, a mismatch with all of GE's other businesses. In the last quarter, it had revenue of $3.6 billion and segment operating profits of $712 million. It is profitable, but not growing.

There is speculation that NBC Universal may have a very interested buyer in Time Warner (NYSE:TWX), which is about to get a load of cash from its own spin-off of Time Warner Cable (NYSE:TWC). The New York Post writes that GE CEO Jeff Immelt may be "interested in exploring a merger or spin-off - with Time Warner and Liberty Media mentioned most often as the likely suitors."

A deal which combines a TV network and another studio with Time Warner is not so far-fetched. NBCU has a number of cable channels including the recently acquired cable and online behemoth, The Weather Channel. Time Warner tried to buy that all on its own. The $3.5 billion price was too high. TWX has it own cable powerhouse, the crown jewel of which is CNN.

Time Warner could save a fair amount of money by putting together two studios, which would allow it to increase earnings by tearing costs out of NBCU.

The financial portion of the transaction would be a big pill to swallow for TWX, but it is not beyond the media company's capacity. CBS (NYSE:CBS), which has revenue comparable to NBCU, has a market cap of about $12 billion. That means Time Warner would probably have to pay $15 billion to get GE's entertainment unit.

Shareholders in Time Warner want to see management step up and improve the company's prospects. There are not many big media deals to be had these days.

Sometimes needing something is just as important as whether owning it makes sense.

Douglas A. McIntyre is an editor at 247wallst.com.

Hollywood veteran Robert Halmi and his son, Robert, helped to build an entertainment firm back in the late 1970s -- and it turned out to be a great success. In fact, by 1994 they sold it off to Hallmark Cards. Then, in 2006 Robert teamed up with Kelso (a private equity firm) to acquire Hallmark Entertainment, which was renamed RHI Entertainment (NASDAQ: RHIE)

And, this week, RHI has hit the public markets – pricing its IPO at $14 per share.

Essentially, RHI develops and distributes made-for-television content and mini-series. Last year, the company posted $232 million in revenues and adjusted EBITDA of $33 million.

A key asset is RHI's film library, which includes more than 1,000 titles (or 3,500 broadcast hours). No doubt, this is a big source of future cash flows. What's more, the company is expanding into new categories, such as video-on-demand and pay-per-view.

Some of RHI's customers include ABC, CBS (NYSE: CBS), GE's (NYSE: GE) NBC, Spike TV and USA Network. There are also deals with global broadcasters, such as Antena-3, M6, PROSIEBEN-SAT1, TF1, Seven Network and Sky.

Unfortunately, the IPO market has been rocky lately. As a result, RHI had a dicey start – with the stock price falling 3.57% to $13.50 in today's trading.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

I recently wrote about World Wrestling Entertainment's (NYSE: WWE) million-dollar giveaway plans. This is the scheme that sees the Mr. McMahon character reward viewers who register at the company's website with portions of his fortune. He calls them up on the phone during WWE's RAW program and doles out various sums; according to this press release, one winner got $200,000, while another player received $125,000. One poor hapless soul won $2! Remember, Mr. McMahon is an evil guy.

I tuned in to see how the contest would be presented and to get some sense of how it was received. It seemed a bit awkward and slow at times. A few in the audience screamed that they were bored. Personally, I thought it was goofy fun to see Vince McMahon calling people to hand out some of his money and enjoyed it for what it was. But WWE will need to optimize the segment and try to make it more exciting, as I don't think it came off exactly as it wanted. McMahon is supposed to keep handing out $1 million a week for an unspecified time period, so the company will have more chances to improve the presentation.

WWE wants to really juice the ratings for the RAW brand, hoping that viewers beyond the hardcore fan base will stop watching networks owned by CBS (NYSE: CBS), Disney (NYSE: DIS), News Corp. (NYSE: NWS), and General Electric (NYSE: GE) long enough to sample the spectacle of the WWE product (of course, GE's NBC Universal owns the USA cable network, which RAW runs on). McMahon is smart to be trying something like this since WWE will be working its way up to perhaps one of its biggest pay-per-view opportunities ever: Wrestlemania 25. With a milestone like that coming, the company has a chance of really expanding its brand equity and setting the stage for long-term growth.

Too many parties have too much to lose to let this one go through without a fight, TheStreet.com's Jim Cramer says.

No, it is not over. If there is one thing we have learned about Sirius (NASDAQ: SIRI) (Cramer's Take)-XM (NASDAQ: XMSR) (Cramer's Take), it is that at every step of the way, people have to try to block it or at least hold it up to the point that someone goes out of business. This is a deal, now much longer in passing than Exxon and Mobil, that still has congressional meddling even right now, still has rearguard activists who might fight the merger on the commission itself even though the FCC's staff has said yes.

Lots of people are confusing the issue of the merger benefits with the merger itself. The benefits will be helpful down the road on both the revenue and the costs, and the caps won't mean that much. What matters, plain and simple, is refinancing. Both companies are always in danger of running out of money.

However, if you know that three years hence -- after the frozen period during which service fees cannot be increased -- the two companies can begin to offer extreme cable pricing, you can go hat in hand to the Street with a good bond deal that people will no longer feel could default.

Another strike for the entertainment industry. And, it comes just as a recession threatens to cut into TV ad revenue and movie ticket sales. That is not good news for companies like CBS (NYSE: CBS), Viacom (NYSE: VIA), and Time Warner (NYSE: TWX), which already trade near 52-week lows.

Investors are understandably worried that consumer concerns could hurt entertainment spending. Who has extra money to see "Spider-Man XII"? Marketers often cut budgets for costly broadcast TV ads when the economy looks grim.

Now, the Screen Actors Guild may go on strike when its contract runs out on June 30. According to The Wall Street Journal (subscription required), "The two sides have made little progress on key issues including compensation for actors when their work is used on DVD or new media such as the Internet."

Once again, the internet comes up as the one thing entertainment companies should fear. It has been used for illegal downloads of music and movies. Many younger people would rather hang out on YouTube than watch pay-per-view movies online. Now, actors want a portion of internet revenue.

If the actors are not careful, while they are on strike and the entertainment world is shut down, the internet will eat the whole industry.

Douglas A. McIntyre is an editor at 247wallst.com.

Warner Music Group (NYSE: WMG) has asked CBS Corporation's (NYSE: CBS) free on-demand music streaming service Last.fm to remove the label's music from the site "in an apparent dispute over compensation rates." Billboard reports that CBS is "currently negotiating a new agreement with Warner Music Group and are working hard to built the most comprehensive music service on the Web." Music from Universal Music Group, Sony BMG Music Entertainment, EMI Group, and various independent labels remains on Last.fm, and the site's Internet radio service still offers songs from WMG artists.

CBS purchased British-based Last.fm a year ago for $280 million, and WMG was the first major label to sign with Last.fm in February 2007. According to Billboard, WMG had continued to keep music with Last.fm "on a month-to-month basis" after the original deal lapsed. Unlike paid subscription-based services, Last.fm and other free services offer consumers music without charge, and are ad-supported. News Corp.'s (NYSE: NWS) MySpace will soon be starting it's own similar service, which will tap into the social networking site's large user base.

Billboard also reports that WMG had grown "disenchanted with Last.fm's compensation rates" after comparing the rates to other services like the forthcoming MySpace Music. In addition, WMG "owns equity stakes in MySpace Music" and "has been frustrated by Last.fm's failure to proceed with its plans to launch a music subscription service." Paid subscription services have been being pushed by the music labels over other sites and stores like Apple Inc.'s (NASDAQ: AAPL) iTunes Store because they offer better profits for the labels. Mobile phone services have started to tap into this very service, offering consumers music and players on new phones developed for that very purpose.

This post is part of a series on some of the most memorable companies that have disappeared.

RCA is perhaps one of the most famous abbreviations ever. Even though most people have probably heard of it, I'd be willing to say that quite a few would be stumped at what the letters stood for. Do you know? (No Googling allowed!) That's okay, because I'll tell you. RCA was the Radio Corporation of America.

According to a history at a site dedicated to RCA's current licensing initiatives, General Electric (NYSE: GE) established RCA in 1919 to fulfill a request made by the U.S. government during World War I. The government recognized the importance of radio patents during wartime and did not want GE to go through with a transaction that would see broadcasting materials sold to the British Marconi business. So, instead of interacting with British Marconi, the American Marconi business was absorbed into RCA.

As the years went by, RCA sold radios made by GE and Westinghouse and became involved in broadcasting. The radio medium saw its popularity rise in the early part of the 20th century, leading RCA to buy, along with GE and Westinghouse in 1926, a station in New York with the call sign WEAF. This was the genesis for the National Broadcasting Company, which you know better as NBC (and to think that a lot of pundits find GE's ownership of NBC Universal quizzical). Eventually, RCA bought out the Victor Talking Machine company in 1929. Yep, thus was born RCA Victor. Now, you might associate RCA Victor with that famous dog logo (I know I do). I didn't realize this, but that dog is called Nipper, he's said to be a Fox Terrier, and according to some legends I've read, he was thus named because he liked to bite people. Who knows, but I sure wouldn't want to bother him while he's listening to that phonograph of his!

World Wrestling Entertainment's (NYSE: WWE) Vincent Kennedy McMahon wants more viewers for his Monday Night Raw wrestling extravaganza. In fact, he's so keen on growing ratings that he's willing to spend his own money to keep viewers tuned. How much? Try $1 million.

In a terse press release concerning a promotional sweepstakes, WWE says that Raw viewers can register at the company's Web site and then watch for codes during the program beginning next Monday. People will be competing to win a portion of a $1 million giveaway each week for some unspecified time period. Now, before you think me naive, I made sure to see if this was legitimate, and from the looks of things it is. According to this AP article, McMahon will really be doing this. According to other reports, the June 9 Raw will reveal the details of the promotion. The $1 million will come from McMahon's own fortune (again, from what I understand, this is real).

There's no question as to why this is being done. WWE wants eyeballs. Ratings have been challenged as of late, according to that AP piece. I think giving away $1 million is exciting, and as far as a marketing campaign goes, it should boost ratings. Only problem is, I'd have to imagine that long-term shareholders aren't happy that this kind of gimmick has to be employed. Is wrestling becoming boring to people? Are they in need of other reasons to watch? Well, the answer would seem to be a resounding "yes."

News Corp.'s (NYSE: NWS) Fox network recently settled a snag with the talent behind The Simpsons. According to The Hollywood Reporter, fresh deals were struck that will keep the show on for a 20th season. That's pretty darn long to be on television, and it's a testament to the iconic quality that the animated series possesses.

Negotiations reportedly went on for months. In fact, next season will only see 20 episodes instead of 22 (they better still do a Halloween episode!). Some of the talent will be receiving $400,000 per show, representing a 33% raise (the cast actually wanted more than that). The Reporter article did not say who was getting what. I have to ask the following question: considering how long the show has been on, and considering that media companies are trying to discourage rampant increases in above-the-line costs (at least, that's what they should be doing, as far as I'm concerned), should News Corp. execs have demanded that Fox just end the negotiations and refuse to give in to a 33% raise?

I've got to be honest, a big part of me says "yes." However, there is incentive to keep The Simpsons on the air. Last summer, a movie version of the long-running show made a successful leap to the silver screen. The film grossed over $180 million at domestic theaters, and its worldwide total stands at more than $525 million, according to Boxofficemojo.

I've got to be honest, I wasn't so sure that Amazon's (NASDAQ: AMZN) Kindle device would be a hit. But, according to BusinessWeek, it seems like it's doing okay. Kindle, which is a reading platform for e-books, actually experienced sell-outs after it was launched last fall. And now, CBS's (NYSE: CBS) Simon & Schuster has upped its support of the platform by increasing the number of titles from its portfolio to be sold on Kindle. How does 5,000 more titles from Simon & Schuster sound?

Just great, I'm sure Jeff Bezos would say. And who can blame him? It looks like people are really taking to Kindle, and although I don't think reading books for pleasure in such an electronic manner will ever come remotely close to challenging printed tomes, I know it's still important for Amazon to have a strategy in this arena. And like I mentioned at the beginning, the fact that Kindle seems to have had a strong start is very impressive.

Lately, I've been hearing a lot of chatter about General Electric (NYSE: GE) and its NBC Universal asset (here's one example). Specifically, there's been talk about the future of the movie and television business and its role as a productive member of the GE portfolio. There are a lot of pundits out there who would like to see it sold off; probably a lot of investors would like that, too. Thankfully, CEO Jeffrey Immelt isn't one of them; he has consistently and steadfastly denied that NBC Universal will be offered to buyers in the near future. I hope he retains such opinion, because I definitely think GE needs NBC Universal.

Sure, GE needs to sell things from time to time, the latest example being the conglomerate's desire to dump its appliance division (Peter Cohan agreed with this logic and recently wrote a piece about the subject). But it shouldn't get rid of NBC Universal. Ever. Well, maybe there might be some compelling event in the future that would justify a sale, but I really don't see that happening. Why? Because content is valuable, and GE needs to own a piece of it.

We live in exciting times. The media is changing. New distribution paradigms, driven by digital technologies, are forming all the time. Libraries of films and television shows are going to be valuable well into the future. Think about Universal and its film library. The Mummy, Jurassic Park, E.T., The Bourne Ultimatum, Jaws...you get the picture. NBC Universal will be able to monetize all these franchises and many, many more from the library, as well as ones that have yet to be produced, via the new digital economy.

Whenever I write about media companies such as Disney (NYSE: DIS) and News Corp. (NYSE: NWS), there is a theme that I constantly go back to in regard to the profitability potential of these businesses. It centers on compensation of celebrity talent. I just don't get why so much money is thrown toward stars in the form of cash up-front and back-end participation. As far as I am concerned, content is always a gamble; one never knows what's going to be a hit and what's going to flop around like a dying fish on the boardwalk. And stars just don't seem to guarantee that anything will be a hit; likewise, a project devoid of stars can do gangbuster business.

That's why I utterly loved an article I read from The Hollywood Reporter. It's a lengthy expose on the correlation between box-office success and star power. This is truly one of the best pieces I've perused on the subject, and I just have to highlight it to those interested in the economics of Hollywood. Boiling it down to the essentials, it basically states that the youthful audiences of today care more about concepts than they do about stars, and authors Steven Zeitchik and Borys Kit collect some statistics to back their thesis up. Further, they point out simple existential observations that CEO's of media companies must take to heart; for instance, Tom Hanks might bring in the crowds for Cast Away, but he did nothing for The Ladykillers. Then again, was Hanks the reason Cast Away was such a hit? Was it the screenplay? Was it the premise? Could you have put the guy who plays Jigsaw from the Saw series in the starring role and have had as much success with him as you did with Tom?

There's no way to answer this question, unless you can invent a device to see what an alternate reality would look like. However, it seems reasonable to me that CEOs of Sony (NYSE: SNE), Viacom (NYSE: VIA), and General Electric (NYSE: GE) -- remember, GE owns Universal -- must finally relate star power to shareholder value. If they can get their studio heads off the cracklike addiction of chasing big stars with large deals, then profits at the studio divisions will surely increase. Budgets and marketing expenses are going through the roof, and something has to give.

So the big news on Thursday was CBS' (NYSE: CBS) hefty $1.8 billion purchase of CNET (NASDAQ: CNET). Douglas McIntyre already explained why this was such a "weird deal" in an excellent article that you can read here. I'd like to expand on that thinking a bit by asking if it should have been Viacom (NYSE: VIA), as opposed to CBS, in the buying seat.

Remember "old Viacom"? Old Viacom was composed of CBS and "new Viacom", the latter being the Viacom of today. I know, confusing, but that's how things are when a big media conglomerate splits in two. Anyway, there was a general mandate given to both companies, one that basically stated the logic of CBS being an entity that focuses on cash flows and dividend increases while new Viacom would focus on acquisitions to promote capital appreciation of the company's stock. Sure enough, the yield on CBS tells the tale perfectly.

So, I have to ask, what gives? I mean, a check of CBS' latest 10K shows that the broadcaster generated $2.2 billion in operational cash flow in 2007. I think paying $1.8 billion for anything, let alone a questionable asset vis a vis CBS' core media competencies, might be too much given CBS' mission to return a lot of value to shareholders over the long-term in the form of dividends.