Viacom (NYSE: VIA), a media business that competes with Disney (NYSE: DIS), Time Warner (NYSE: TWX), News Corp. (NYSE: NWS), General Electric's (NYSE: GE) NBC Universal, and Sony (NYSE: SNE), doesn't have a lot to brag about in its third quarter. Revenue went up only 4%. Adjusted earnings fell 15% to $0.55, beating expecations by a penny. But I doubt that's much comfort in this particular case, considering that operating income at the company's media networks division dipped 4%, and an operating loss was reported for the studio division due to difficult comparisons (i.e., Transformers helped the year-ago quarter).

Like clockwork, Executive Chairman Sumner Redstone praised Viacom's content and fully supported CEO Philippe Dauman. Maybe Redstone should take a strong look at Viacom and sit the CEO down and have a serious discussion with him about the realities of entertainment programming. Right now, MTV is suffering from ratings challenges. Dauman has to step up his game in this regard.

I mean, come on, MTV is a powerful brand with the youth, and he needs to lean on the folks running it to work harder and become more innovative and creative. I will say that I liked that the earnings release mentioned a desire to engage better cost controls at its studio division. Paramount definitely needs to lower overhead expenses. Hollywood likes to spend money; shareholders most certainly do not. So I think Redstone should aggressively make this clear to Dauman.

Viacom Inc. (NYSE: VIA)'s MTV Games and The Beatles' Apple Corps Ltd. announced during a conference call this morning that a new interactive music game based on The Beatles catalog is in development for a late 2009 release. The untitled game will be based on the career of The Beatles and the platform for MTV's Rock Band, but will not be a spin-off of the popular series as rumored previously. According to Billboard, "the game is designed to take users on an 'experiential journey' through the Beatles' career, music and vision. It will also include new types of interactive gameplay associated with the Beatles' imagery in addition to its music."

MTV, which is owned by Viacom (NYSE: VIA), is canceling one of its most iconic shows: TRL, the popular and once-influential daily top music video countdown.

TRL debuted in 1998 with Carson Daly as its host, and reached its height of relevance popularizing hits from teen-pop stars like NSYNC, Britney Spears and The Backstreet Boys.

Daly left the show in 2003 to host his own late-night show and since then, a revolving door of forgettable video jockeys have emceed TRL.

The last epsiode will appear in November, according to E!

MTV will still be showing music videos when it begins more regular showings of FNMTV, hosted by Fall Out Boy frontman Pete Wentz on Friday nights.

I really want to turn bullish on Midway Games Inc. (NYSE: MWY), but there's no way I can do that right now. The company's stock is below $3 a share, and it's there for a reason. But, let's first look at a couple positives from the software publisher's latest earnings release. Net revenues shot up 170% to $29.9 million in Q1; that beat expectations, according to Briefing.com. And the net loss per share also beat expectations by a penny -- it came in at $0.29 per diluted share on an adjusted analysis.

But, that net loss is worse than the previous year's net loss of $0.20 per diluted share, also adjusted. Like I say, someday I want to report that Midway has turned the corner and is a buy. I simply can't do that, even though I recently bought the publisher's catalog title Rampage: Total Destruction for the Nintendo Gamecube and am having a great time with it -- guess it goes to show that you can't always judge a company's stock by the fact that you enjoy its products. One thing that Midway needs to do is perhaps seek some synergy from Viacom, Inc. (NYSE: VIA)'s MTV and Nickelodeon channels. Sumner Redstone is, after all, the controlling shareholder of Midway. Granted, THQ Inc. (NASDAQ: THQI) deals with the Nickelodeon characters at the moment, but in the future, Redstone needs to figure out a way to use his media assets to promote Midway and perhaps funnel some licensing deals to the publisher. MTV is certainly doing well with its own video-game ambitions via Rock Band, which is sold by Electronic Arts Inc. (NASDAQ: ERTS).

One thing I must point out is that, since my last article about Midway, the stock is up. This was mentioned to me by a reader. So, in objective trading terms, if you went against my opinion, you would have made money, no question. However, I have to stick to my guns and say that I personally wouldn't play the volatility in Midway's shares. Yes, you could luck out with it, maybe Redstone will come along one day and buy out the remaining shares at a big premium (doubtful, at least the big-premium part). I wouldn't want to speculate on such an outcome; I am still content with my Activision, Inc. (NASDAQ: ATVI) shares as a way to play video-game investing.

Disclosure: I own shares in Activision; positions can change at any time.

MTV, a part of Viacom, Inc. (NYSE: VIA), revealed to Billboard Thursday that the digital stores for the popular video game Rock Band saw the number of downloadable songs ("levels") more than double in the last two months. The more than 6 million downloads easily beats the 2.5 million that were purchased between the release of the game in November and when MTV last reported download figures in January.

In an effort to streamline the purchasing process, MTV will also be releasing a new software update to the game this week. The new update allows players to purchase downloadable songs from within the game itself, versus exiting the game and using the platform marketplaces. According to Billboard, "the new Rock Band Music Store feature instead allows gamers to browse, preview and purchase tracks through an interface included in the game" and "will be available as a free download later this week."

Rock Band has enjoyed quick success in the last four months, and with the large sales figures and new changes, the video game indicates a new market the music industry should be able to tap into. The online community within the game can only help spur greater sales as well, with players hoping to connect with new songs that can be added to the store and the game. Another doubled increase may be too much to look toward in the next period, but more growth is certainly bound to happen.

Earlier in the week, CBS Corporation (NYSE: CBS) sent out its earnings broadcast. Now it's time for Viacom, Inc. (NYSE: VIA) to tell investors how things are doing. CBS and Viacom, as I'm sure you know, used to be part of the same media conglomerate, but they went their separate ways to see if being apart would help shareholder value. So it's always fun to compare the two when they release their numbers (check out Brent Archer's coverage of CBS' quarter and his feelings in terms of stock strategy).

For the fourth quarter, Viacom, which competes with companies like The Walt Disney Company (NYSE: DIS), News Corp. (NYSE: NWS), General Electric Company (NYSE: GE)'s media asset NBC Universal, and Time Warner (NYSE: TWX), was expected to earn $0.83 per share. Earnings from continuing operations came in at $0.83 per diluted share. That was quite a nice rise compared to the $0.69 per diluted share from continuing operations booked one year ago. Plus, the revenue increase for the current quarter was a nifty 19%. For the full year, earnings from continuing operations rose a more subdued 10% to $2.41 per diluted stub; this performance was accomplished on a revenue gain of 18%.

Both media networks -- Viacom owns the MTV suite of cable channels -- and filmed entertainment -- Viacom owns Paramount -- posted strong double-digit revenue gains for the quarter and year. Drivers included films by DreamWorks Animation SKG, Inc. (NYSE: DWA), which the company distributes -- those films would be Shrek the Third and Bee Movie. Also, Transformers helped to power results. Another product that tuned up the quarter was Rock Band. It was developed by Harmonix, which Viacom purchased for its MTV unit, and it is distributed by Electronic Arts (Nasdaq: ERTS). It's a rocking competitor to Activision's (Nasdaq: ATVI) Guitar Hero concept.

The Weather Channel, held by family-owned Landmark Communications of Virginia, is being auctioned off along with the rest of Landmark, and could fetch $5 billion. A number of public companies may have an interest. According to The New York Times, firms looking at the property include Comcast (NASDAQ: CMCSA) and General Electric (NYSE: GE).

The Weather Channel is attractive for two reasons. The first is that there are very few large, independent cable networks. Most, including CNN, CNBC, ESPN, and MTV, are already owned by media giants. The chance to pick up another large advertising-supported 24-hour product should be very attractive.

The second tremendous selling point is that weather.com, the online arm of the company, is one of the most-visited sites in the U.S. In November, comScore ranked it as the 16th most-visited website, with 34.1 million unique visitors. That puts it ahead of ESPN.com, CBS.com, and the Viacom (NYSE: VIA) digital properties.

The Weather Channel is a rare prize. The bidding should be spirited.

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

The Associated Press is asking a question that is practically blasphemous -- the outcome of which could change the face of the music industry: Are record labels really necessary, especially for established artists?

With acts including Madonna and Radiohead forgoing traditional record deals, and international superstar Robbie Williams signing a complicated deal guaranteeing him 80 million pounds over four albums, including some revenue from live events, it's clear that the the traditional concept of labels signing artists and paying them royalties is changing. Radiohead has decided to make its album available online only and let fans decide how much to pay.

Some argue that these are exceptions -- traditional record labels are still a must for all but the most established acts. Yet even lesser-known acts can promote their music on sites like MySpace and Facebook, which allow users to feature the songs they like on their pages. A lot of young people get introduced to music this way, forgoing outlets like MTV and the radio, which are seen as too commercial and passe.

The shift probably will be gradual, with better-known acts making the leap first. But as the methods of music distribution and hit-making change, so too will the role of the record label. Long term, I think that role will become a lot less relevant.

For those of you who missed it, I envy you. After watching MTV's Video Music Awards last night, my friend summed it up well: "OMG, Britney sucked HXC!" That's pretty much all there is to be said. Britney looked out shape, bored, arguably intoxicated, and just... messy. If you haven't seen it yet, you can watch it here.

Given that Britney was the most exciting thing from this year's VMA's (not including Sarah Silverman's skewering of the former pop princess), I can only imagine what the Nielsen chart for the awards looked like. High ratings when Britney began her performance followed by a sharp drop-off as people with children and stomachs changed the channel, and then an Enron-like descent after she was done.

This may be a blessing, though, for Viacom Inc. (NYSE: VIA), parent of MTV, because people finally are talking about the VMAs which lost thier relevance sometime during the Clinton Administration.

But the nice thing about watching Britney self-destruct is that she's not a major talent. It's not like Billie Holiday, or even Amy Winehouse, where we can watch the dysfunctional descent and say: "What a shame. So much talent and she's throwing it all away". No. With Britney, all we can do is laugh, and maybe feel a little bit sorry for her children... and any other children who happened to be watching.

It's hard to imagine why Britney even bothered: She was stumbling around on stage and barely danced at all. Did she really think the headlines would be anything other than what they were? Here's a sampling:

Spears bombs...

Spears' MTV comeback a big letdown

Spears disappoints in MTV comeback.

Britney Spears disaster: a dead career bounce

And of course Perez Hilton, who put it this way:

So it may finally be time to declare Britney's career completely over. I would say Novastar Financial (NYSE: NFI) is a better bet here.

Viacom's (NYSE:VIA) MTV has signed MySpace star Tila Tequila to host her own show, A Shot at Love with Tila Tequila, to debut on October 9th. The bisexual-and-proud-of-it Tequila has become one of the most friended people on MySpace, and her site has helped launch her musical and modeling careers. She also previously served as host of FUSE TV's popular Pants-off Dance-off, named by TV Guide as the dumbest show on television.

According to TV Week, the show will be constructed along the lines of Big Brother but customized to Tequila's tastes. Sixteen straight men and sixteen lesbians (what do they have against bisexual women?) will vie for the chance to move into Tequila's mansion. Once there, the finalists will contest for her affections. The show is slated for a ten-episode run.

How can a show featuring a star who describes herself thusly, "I'm no girl next door, I'm the bitch down the street," be anything but a hit? I'm giving it two thumbs up already.

Viacom's (NYSE: VIA) MTV unit is setting up a partnership with online music operator RealNetworks (NASDAQ: RNWK) to create an online music store to try to compete with the Apple (NASDAQ: AAPL) iTunes store. MTV's large marketing budget and substantial reach on cable TV will be the key to the effort.

Large wireless operators Verizon Wireless and Vodafone (NYSE: VOD), the largest carrier in Europe, will distribute the service. Apple has a music distribution deal with AT&T (NYSE: T) based on its exclusive sales arrangement for the iPhone.

While most competitors to the Apple music store and player powerhouse have done little, the new venture has a chance. Unlike projects like the Microsoft (NASDAQ: MSFT) Zune, Verizon and Vodafone has close to 150 million wireless customers between them. The would rival the number of iPods in the market. MTV's global brand as the top music video channel should also help.

However, these deals almost always fall apart because there are too many parties with different agendas. RealNetworks would like to boost its flagging Rhapsody online music store. MTV would like to find some success outside its cable distribution and the two wireless carriers would like to have a product to compete with the iPhone/iTunes juggernaut.

But, that is a lot of moving pieces with competing interests. Apple can sleep soundly tonight.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Viacom Inc. (NYSE: VIA) today reported second quarter earnings that exceeded Wall Street's low expectations.

Net income was $434 million, or 63 cents per share, compared with $437 million, or 61 cents, the New York-based company said in a press release. Revenue rose 13% to $3.19 billion. Excluding gains and charges, profit was 54 cents. Analysts had expected earnings of 50 cents on revenue of $3.07 billion, according to Thomson Financial.

Advertising revenue rose 6% to $1.15 billion while affiliate fees jumped 15% to $577 million. Though profit was hurt by higher costs, revenue from its cable channels rose 10 percent to $1.92 billion, helped by a gain on the sale of MTV Networks' investment in Russia and an impairment charge from Amp'd Mobile.

Strong box office receipts from its Dreamworks SKG films "Shrek the Third" and "Over the Hedge" helped push up revenue in the Filmed Entertainment business by 20% to $1.31 billion. David Jones, an analyst with Miller Tabak & Co., told Bloomberg News that the unit outperformed his expectations by about $100 million.

Shares of Viacom are down more than 7% this year as investors continue to worry about who will succeed chairman Sumner Redstone who reportedly is feuding now with his daughter Shari.

"Revenue was better than expected because filmed entertainment outperformed by about $100 million or so,'' David Joyce, an analyst with Miller Tabak & Co. in New York, said in an interview. He has a "buy'' rating on the shares and doesn't own them.

Rolling Stone magazine recently published a fortieth anniversary issue celebrating the magazine's tenure in the popular culture business. After reading the issue and wading through the multitude of advertisements, I started thinking about Rolling Stone as the precursor to so many of the music magazines in existence today and how these kinds of media serve the record industry in an increasingly digital world. Forty years ago, Rolling Stone may have been an inventive method to sell music, with interviews and features about artists, but as it is now the magazine and its followers are hardly what they claim to be: music magazines.

The very notion of a "music magazine" is quickly becoming outdated, as is found simply by perusing through the articles and features through most of the print I purchase regularly. Compare it to other, older magazines, like the British NME and you will find that the Rolling Stone falls down in coverage simply because there is an overabundance of non-music advertisements. Even other contemporary magazines, like Blender, manage to advertise the actual music, while both sell the digital devices that are quickly becoming the mediums of music transferal.

If championing the music is the goal, which presumably it is, Rolling Stone has never seemed far from what we call "mainstream," so it hardly has the capacity to introduce new bands and compete with the growth of online services like Google Inc. (NASDAQ: GOOG)'s YouTube or News Corporation (NYSE: NWS)'s MySpace. Even other magazines quickly champion lesser known bands into mass-popularity. Consider NME, the magazine was a massive supporter of the Arctic Monkeys and they quickly became more popular than they had been, even with the online support. With the weekly issue NME prints, the publisher keeps a more up-to-date and consistent online news service, signaling that the move online is not contained to artists.

I'm dating myself here, but there was a time when I would rush home from junior-high school in order to pick up the corded rotary phone and vote for George Michael videos on Dial MTV. This was before the former Wham! star's legal foibles, before the Internet, and before MTV stopped playing music videos altogether. Hosted by the big-haired and smooth-voiced Adam Curry, the show played the top-ten most requested videos of the day, as called in by viewers. Simple enough.

By the late 1990s, this concept had morphed into Total Request Live, or TRL, which ostensibly shows the most popular videos, as voted for on MTV.com. But the videos are cut down into excerpts within an inch of their lives to make time for the vapid comments of screaming fans, as well as guests promoting their latest album, movie, or reality-show venture.

The nine-year old program is showing its age of late, with average daily viewers falling from a peak of 782,000 in 1999 to 375,000 currently. (To be fair, 1999 was at the height of the Britney/Backstreet Boys/*NSYNC teen-pop explosion).

This ratings decline has forced executives at MTV -- a unit of Viacom (NYSE: VIA) -- to skew younger with a new digitally friendly name. The program will now be known as YouRL (a play on "URL"), a name which, according to Broadcasting & Cable, stresses personalization. The idea is that this will allow MTV to compete with such brands as MySpace and YouTube.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Viacom Inc. (NYSE:VIA) will be in no mood to celebrate at this year's upfronts but will have to put on a smile and fake it.

The upfronts are gatherings in which networks talk up their upcoming season to advertisers. The parties are great. There's lots of free food, free food and free stuff. Beneath the frivolity, there's serious business negotiations going on about advertising prices. This is where things get tricky for Viacom.

As yesterday's fourth-quarter results illustrate, Viacom isn't in a strong bargaining position. Wall Street was pretty underwhelmed too. The company had profit of $480.8 million, or 69 cents per share. Excluding one-time charges, profit was 65 cents. Revenue rose 32 cents for $3.59 billion. The results beat analysts' forecasts but concerns about growth tempered people's enthusiasm and the stock fell.

Blogging Stocks readers were divided. Forty-one percent expected Viacom to post disappointing results. It turns out that everyone was right.

The reason for investors' unease is simple: people just don't want their MTV. The performance of the cable business disappointed Wall Street and things aren't going to get better soon. Interestingly, Reuters points out that Viacom doesn't use the "C word" any more. They are now "media networks." Get it.

Perhaps the experts who were expecting a healthy cable upfront may have been too optimistic, though cable keeps snagging audience away from the broadcast networks. The bigger problem is that the Internet is stealing audience from cable. These are the young, hip viewers who advertisers covet. MTV has recently laid off workers and reorganized its sales force to better focus on the Internet.

For now, the company is very much in the TV business and that's a problem.