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If you’re not a preteen, a relative of one, or someone following the media industry, you probably haven’t’ heard of Club Penguin or its rival Webkinz.     The sites provide interactive games and social network like features for preteens. Club Penguin, launched in 2005, was designed to be a fun, safe, game and activity environment for today’s internet enabled children aged 6 to 14; MySpace for the younger set. On the site, kids can adopt and interact with virtual Penguins or chat and play games with other kids on the site.

Wednesday, coinciding with their earnings release, Disney announced they were buying the British Colombia based company for $350m in cash plus revenue performance incentives that could make the kids social network worth as much as $700m. 

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It was looking like News Corp was getting off its quarter-long roller coaster ride yesterday with a go-ahead vote to buy Dow Jones but elsewhere in media stocks, particularly entertainment, a different roller coaster ride kept going. After the close of market Tuesday,  DreamWorks Animation and CBS both released quarterly earnings.  It was a good day for animators, not such a good day for TV.

DreamWorks Animation(NYSE: DWA:)
DreamWorks Animation reported towering second quarter revenue with net income of $61.8m (60 cents a share) for the quarter ended June 30th.  Even subtracting a one time gain of 11cents a share for a reduction in reserves for home video sales, and another one time gain of 4cents from tax accounting,  it was huge return relative to last years income of 13.7m for the same period. 

Quarterly revenue in the film industry is highly variable and heavily influenced by the volume and quality of titles released at any given time.  DreamWorks strategy is to release one franchise title and one new film every year.  Shrek the Third was the franchise film for this year and it released this past quarter.  They’ll be living off of it for the rest of the year.

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It’s a lot easier to follow what’s been proven, what’s known, than to start from the ground up. This summer at the movies, as much as any summer, has been living proof. We’ve been given  Die Hard (Part 4), Harry Potter (Part 5), Ocean’s 13, Spiderman 3, this week we’ll get Bourne Ultimatum (part 3) …and there’s a long list of others.  Hollywood loves a good sequel. 

That same tendency to follow what’s been proven is fueling Hollywood’s new love for Internet video.  Audience’s appetites are growing larger and larger and like a well tested sequel ready to capitalize,  professional entertainers are  embracing Internet video now that the marketplace is burgeoning. 

Today, a site called My Damn Channel will become the latest addition to the list of Hollywood backed video outlets online. Apparently, the bandwagon is moving and, as it passes Sunset Blvd, it’s time to jump on.

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If I posed the question: what might get Martin Scorsese, Amazon.com, and Hewlett Packard seeing in black and white and talking in excited hyperbole? How would people answer?  Would they think I was kidding if I told them the answer involved a refrigerator, a vault and a computer?  Would it help if they knew Scorsese was a noted film preservationist, that he filmed Raging Bull in black in white partly because he questioned the durability of color film stock at the time?

From Los Angeles to Sacramento to Seattle, the answer to my question lies in old celluloid, lost masters, and digital future.  The answer is hope vested in the pairing of film preservation with Print-on-Demand DVD.  It’s a quiet renaissance, something of a Hollywood 2.0; an ambitious plan being pursued by a number of industry giants.

The Preservation Paradox:
Watching a classic movie is like seeing a moment frozen in time; slivers of history.  Like a photograph, old movies have a richness, a romanticism in their black and white footage.  Absent the kind of special effects wizardry that can fill the screen today, they also had to tell a good story, and a good story is timeless.  Unfortunately, film is not so enduring.  Old film requires costly temperature controlled storage, and to be re-aired, requires meticulous, and equally expensive, cleaning and restoration. 

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Last February, AOL and HBO joined forces to create a website for comedy video called ThisJustIn.com.  The effort was HBO’s first effort to bring its content development skills online outside of HBO.com. 

The Hollywood Reporter reported today, citing unnamed sources, that This Just In will shut down in August.

Predating comedy portal FunnyorDie.com (launched in April with a number of Hollywood stars), “This Just In” was designed to be a home for original content, and something of a focus group for developing new material with the niche of comedy video.

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Despite solid revenue growth, it was a rough day to be a Netflix shareholder.  On later confirmed expectations of weakening profits for the rest of the year, the stock was punished and down 12% during regular trading hours.  It continued to fall into after-hours sessions.

In the company’s earnings announcement released today, Netflix (NASDAQ: NFLX) reported Q2 revenue up 27% over the same period last year to $303.7m.  Earnings on revenue were $26.6m (37c/share) or 31 cents a share after subtracting a $4.1m one-time payment from Blockbuster as part of the two company’s settlement of patent litigation. 

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(Metue Celebrity Endorsement Lists are now live on the site. Read the article below or follow the links at the bottom of this article  for more information)

You can’t legally download a Beatles song online yet but you can hear “All You Need is Love” play on TV in support of Luvs diaper sales.   Put off by that? Change the channel but beware, across the channels, TV and radio, famed songs, and new releases from Janis Joplin (Mercedes) to Queen (Bohemian Rhapsody) to John Mellencamp (Our Country) all play in marketing campaigns.   The song Our Country even debuted in advertising months before it was available as a single.

We live in Billboard Nation; a consumer culture.  Celebrities looking to stay in the public eye can do it by selling products. They can market themselves and get paid to do it at the same time. Popular songs can be soundtracks to a sale.   Turn on the TV and that voice selling cars may be one you know (Kevin Spacey, Gary Sinese). Similarly open a magazine and chances are you’ll see a recognizable face on the pages promoting a product.  The guitar riff in a commercial? Not necessarily a jingle.

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