The strike by the Writers Guild of America, which has crippled production of TV show and films, is likely to end this week, according to several media sources. The division between the writers and studios over revenue from internet content appears to have been addressed. According to The Wall Street Journal (subscription required), "in discussions between the studios and the Writers Guild, one particular issue was the money a writer makes when a television show is streamed on the Internet with advertising. The writers won a 2% share of a distributor's gross in the third year of the contract."

Now Wall Street can turn to the issue of whether the weakness in big media company shares may begin to abate. Stocks of companies with large TV and film revenue may get a boost from the news. That may only be temporary if a recession claims growth in TV ad dollars and studio ticket and DVD sales.

CBS (NYSE: CBS), Disney (NYSE: DIS), and Viacom (NYSE: VIA) have all traded down since Christmas, though several large media companies say that they are not seeing slowdowns in their businesses.

But, advertising cannot escape a share slump, so settling the writers strike may do very little for shareholders this year.

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

Last week the Writer's Guild of America's (WGA) 12,000 members went on strike. By my estimates -- which could be way off -- the strike makes no sense for the members of the WGA.

Based on one scenario I calculated, the strike will cost the WGA $486 million in the next year. Here's how I got there: If the strike lasts six months, it will cost the WGA $540 million in lost wages -- assuming that the average member takes home $90,000. If the WGA wins what it's fighting for, it will get an additional $54 million. This represents a doubling of their payments from DVD sales to 8 cents per DVD sold -- worth $35 million assuming 2007 DVD sales of 863 million units -- plus $19 million -- which is 2.5% of the revenues from new media such as Internet downloads of the shows they write -- which one analyst expects to total $775 million in 2007.

From what I've read, the WGA may already be withdrawing its proposal for doubling its per DVD pay. But it's currently sticking to its guns over the 2.5% share of new media revenues. This is important for historical reasons. During the last WGA strike in 1988, work stopped for 22 weeks and was estimated to cost the industry $500 million. The WGA ended up settling for what it now regrets was a too tiny portion of home movie revenues which ended up dominating the industry -- constituting 73%, or $4.8 billion of 2004's total -- with the other 27% from theater sales.

Yes it's true -- just like you and me, the writers want more money, and since they did not get it they are walking out. Actually having some keen familiarity with Hollywood, I would find it hard to believe that after not striking since 1988, writers could actually come to any agreement with producers without one now.

First of all, the world is changing rapidly and whatever agreements they settled on in the past is most assuredly not attuned to the media landscape of today. The writers feel they negotiated a borderline contract before, and do not want to give up any revenue opportunities now.

Producers have made more money from the internet and DVD sales than they have in the past, but they have seen weaker box office attendance and are getting burned badly by DVD pirates burning cheap discs for sale at great discount to the legitimate copies.

The last time there was a strike, we are told the industry lost $500 million. I have no way of verifying the legitimacy of that figure because in Hollywood (as those in the know can attest), the most creative talent is found in the accounting department, not on the screen.

At midnight, the Writer's Guild of America walked off the job, leaving the television and entertainment industry without anyone to craft the jokes and dramatic dialog we depend on to fill our otherwise empty lives. No more poop deck gags for Fox's (NYSE: NWS) Family Guy (you really phoned that one in, gang). No more four-times-an-hour plot reversals for 24. No more lame-o quips to eviscerate the comedy of viewer-submitted video on Animal Planet.

The discord is symptomatic of the evolution in the entertainment industry, as the various contributors fight for a fair share of the spoils of internet-based and DVD revenues. These new alternatives provide the long tail for entertainment, allowing once filed-and-forgotten shows to remain available for viewing ad nauseum.

As online entertainment embraces the advertising-supported model, the archive of shows will continue to spin off revenue, and the writers want their share. Can you blame them? Sure, stars like Tom Green deserve millions for embarrassing themselves on television, but shouldn't there be a least a little sump'm sump'm for the people that create the words that drive the entertainment?

Or perhaps the Blue Man Group is all you need or want.

Microsoft Corp. (NASDAQ: MSFT) seems to be reversing itself a little lately, as evidenced by the latest move with one of its flagship products. That is, the world's largest software maker is not requiring the pesky "Windows Genuine Advantage" product authentication when customers of its web browser, Internet Explorer 7, are upgrading to the latest version of that software.

Usually, Microsoft is incredibly paranoid about verifying authenticity of its Windows operating system (not a stolen or hacked copy) and will only allow bug fixes and upgrades to Windows software installations that have been 'authenticated' using Microsoft's online verification system. Internet Explorer, the company's market share-leading web browser product, seems to be deviating from that past stance, however. Why would Microsoft stop forcing customers who are upgrading the Internet Explorer program on their PCs to verify if their Windows software is 100% legit?

Microsoft Corp. (NASDAQ: MSFT) is pretty consistent in one area these days: shipping consumer and business operating system software that is increasingly locked down for fear of rampant software piracy. Anyone who has owned a recent or current Microsoft operating system probably knows that to download updates, bug fixes and other goodies on a regular basis, your PC must "phone home" to Microsoft and report that it contains a legit operating system. What happens when the "home" portion of that sentence is malfunctioning?

Almost a month ago, Microsoft's servers that validate genuine installations of its newest Windows Vista operating system went down -- and many PCs around the globe could not get updates from the software giant due to its server problems, even though they in fact did have legitimate software installations. So this is it, huh? Our entire computing environment can melt down because Microsoft's servers can't say everything is OK? From a customer standpoint, this kind of piracy protection is rather appalling.

This one incident has exploded into the techno-blogging scene recently, and Microsoft's "Windows Genuine Advantage" (WGA) piracy protection strategy is currently blowing up in its face from the viewpoint of many industry pundits. Yes, every server has problems from time to time and mistakes happen -- but when that result starts telling Microsoft customers that they have a "fake" version of Windows Vista installed on their machines, that can the potential to turn into a huge black eye for the company. In this case, it did. One point of failure led to a huge problem for 19 hours, and any good designer will have multiple redundancies in place to prevent this sort of thing. What didn't the world's largest software maker have one?

(Disclosure: I own MSFT shares as of 9-14-07)

The Writers Guild of America has threatened to go on strike when its contract expires on November 1. Variety reports that Walt Disney's ABC (NYSE: DIS), General Electric (NYSE: GE)'s NBC and CBS (NYSE: CBS) are scouring the world for possible replacement entertainment. (I stop here for a moment to ask: Are there actual writers involved in shows such as American Idol and Survivor?)

Among the places the networks are looking are cable channels, where a great deal of content specifically produced for cable networks could be rebroadcast to a much larger audience. Shows such as The Closer (TNT), Battlestar Galactica (SFN), and Dog: The Bounty Hunter (A&E) have pulled in enough numbers to suggest they might keep the networks' sponsors from storming their headquarters with axes and torches.

The big three are casting their nets even wider, looking to other countries for content. A great many Canadian CBC shows (not more Red Green show, please!) don't run on U.S. television, so shows like its hit Little Mosque on the Prairie could take the place of Desperate Housewives.

Long a staple of PBS, more British shows could also find their way to network television. Many will be very familiar, as Hollywood has found a rich vein by stealing mining England's entertainment, including The Office and American Idol.

The industry is in the midst of changing how audiences are measured and ad charges calculated, so this will be a dicey time for anything that will disrupt the broadcast routine. I, on the other hand, am looking forward to watching Fawlty Towers in prime time.

Microsoft Corporation (NASDAQ:MSFT) has made this mistake before -- rolling out new restrictions on the use of its products in an effort to defeat software pirates, only to irk its existing consumer base and then having to reverse course and limit damage. This is not new for the company, which apparently cannot understand how its customers use its products, and how flexible it must make its software due to the never-ending ways customers want to install, move, upgrade and purchase new computers -- without buying a new copy of Windows every single time a change is made.

Not surprisingly, Microsoft recently backtracked on a policy that would have prevented "moved installs" of the newer Windows Vista operating system on several PCs, even with a valid license. Back in the middle of October, Microsoft issued a new user license for Vista which included terms that would have limited the ability of those who buy boxed copies of the operating system to transfer that license. Strike one right off the bat.

Under the new Microsoft terms, users could have made such a switch only one time. However, the new Microsoft restriction prompted an outcry among hardware enthusiasts and others. Strike two! Only a few weeks later, the company is returning the licensing terms to basically the same state as they exist in the current Windows XP -- customers can transfer their license to a new PC an unlimited number of times, provided they un-install and stop using it on the prior machine. Strike reversal, no?

Microsoft indicated that it paid close attention to the response directly to the company and on blogs and decided to reverse course, although the company had hoped to use the change to aid its ongoing efforts to thwart piracy. Time to go to Plan B -- again.

(Disclosure: I own MSFT shares as of 11-6-06.)

In a bid to push its new suite of integrated applications and tools, Microsoft is planning its initial deployment of Internet Explorer 7.0 via Microsoft's Automatic Updates Service.

So as to not cause another WGA (Windows Genuine Advantage) debacle, whereby downloaded 'Automatic Updates' were functioning beyond the expected scope of users ('dialing' back to Microsoft Servers automatically); IE 7.0 will be designated as a High Priority download, but users will be able to opt-out of downloading the product.

While the opt-out option is certainly a nod to user choice advocates, distribution of IE 7.0 at all via the Automatic Updates channel is in question. Automatic Updates should remain a primary channel for security updates only.

Distribution of a product should be initiated through a product distribution channel, either through standard retail or Microsoft's Download Center.

Of course from a business standpoint, this is a very logical move for Microsoft, taking a play from classic marketing textbooks. Have customers 'opt-out' rather than 'opt-in'. That way, by default you are capturing market share, and only by effort of the end user are you losing market share.

With alternative OS options emerging in lieu of the upcoming Windows Vista (ie. consumer and commercial flavored linux releases) and market penetration of the Macintosh platform, it is imperative that Microsoft hook users onto individual Microsoft applications which through integration with other MS products will synergistically push the Microsoft platform.

In the standalone browser market, IE 7.0 will launch before Firefox 2.0, though Opera 9.0 has launched and has gathered a relatively small but loyal following.

Now that Microsoft expanded its anti-piracy efforts to include Office as well as Windows, it's also made public that a user may be able to get a free replacement copy of its Office applications.  To get the free copy the user must be able to prove that he or she bought the product without intending to buy a counterfeit copy. 

A spokesperson for Microsoft told Information Week that to get a free copy the user must, "submit proof of purchase, the counterfeit CD, and a counterfeit report with details of their purchase."

Windows users have been subject to the Windows Genuine Advantage (WGA) anti-piracy software since July 2005.  Now when they try to download updates of the software, except for Security updates, WGA checks for authenticity.

Initially Office Genuine Advantage (OGA) will be optional when one checks for software updates at Microsoft's website.  But WGA started out as an option as well and now is required, so I suspect that eventually OGA will be mandatory and you won't be able to get updates or add-ons if you have a counterfeit copy.