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I think we all knew which film would come out on top this past weekend. Sony's (NYSE: SNE) new James Bond adventure, Quantum of Solace, grossed an estimated $70 million at domestic theaters over the last three days according to Boxofficemojo. Excellent showing, Jimbo. As far as I'm concerned, though, I think you have to give the number-two film even more credit.

DreamWorks Animation (NYSE: DWA) and its distributor, Viacom (NYSE: VIA), need to be given major kudos for their work on Madagascar: Escape 2 Africa. The first Madagascar took in about $193 million in total at the domestic box office back in 2005. It was released during the summertime. The sequel is definitely going to hit $200 million. This past weekend it took in roughly $36 million, and its total stands at approximately $118 million. With the Thanksgiving holiday still to come, I figure there will be plenty of business for DreamWorks Animation's cartoon.

The wild card here is Disney's (NYSE: DIS) Bolt project. That one will do well, judging by the commercials I've seen so far. How much thunder will it steal from the second Madagascar when it is released this Friday? A lot, I think. Still, I'll keep to my $200 million prediction. I believe there will be enough discretionary dollars left for both cartoons.

Lions Gate Entertainment (NYSE: LGF), whose bigger colleagues include Disney (NYSE: DIS), General Electric's (NYSE: GE) Universal, Time Warner (NYSE: TWX), Viacom (NYSE: VIA), and Sony (NYSE: SNE), publicized its Q2 earnings after the bell on Monday. There was good news and bad news.

The good news was that the company narrowed its loss compared to last year's results. Lions Gate booked a net loss of $0.41 per share this year versus a net loss of $0.49 per share in the year-ago period. The bad news, however, is that the results did not meet expectations. I mean, they really didn't meet expectations, as the call was for a loss of $0.15 per share. That's just how the movie business goes sometimes.

However, let's look at the cash flow, because we can find some comfort there. Operational cash flow for the quarter was positive this year instead of being negative, and free cash flow, which is the ultimate goal of any business, increased over three times to nearly $74 million.

And I'll steer you to another positive statistic -- filmed entertainment backlog increased to what management is calling a record $456.5 million. I know, I also tend to dismiss terms like "record" when I see them in a press release, but at least in this case it refers to revenues that will ultimately be recognized down the line.

Without a doubt, DreamWorks Animation (NYSE: DWA) really nailed it with its latest computer-cartoon sequel, Madagascar: Escape 2 Africa. According to estimates at Boxofficemojo, the film, which is distributed by Viacom (NYSE: VIA), was number one at the box office over the weekend at domestic theaters.

That was expected. But I have to give kudos to the studio's marketing department for improving the previous film's opening weekend. Madagascar, which was released in May 2005, took in $47 million during its opening weekend. As of this writing, Escape 2 Africa has been credited with about $63 million. Considering that this isn't the summertime, I thought the sequel's debut performance was pretty cool.

And here's another equally cool fact: if the estimates hold, then Escape 2 Africa's first-weekend take will be slightly higher than Kung Fu Panda's opening weekend of $60.2 million. You've got to call that a success. Disney's (NYSE: DIS) Pixar brand definitely better take notice, especially if DreamWorks Animation can consistently put out blockbusters during both the summer and fall.

DreamWorks Animation (NYSE: DWA), the computer-cartoon studio that competes with the animation product of other entities such as Disney (NYSE: DIS), News Corp. (NYSE: NWS) and Sony (NYSE: SNE), posted Q3 results after the close on Tuesday. Revenues saw a modest decrease of almost 6%, coming in at $151.5 million. I am categorizing a 6% decrease as modest in this case because the studio had a Shrek sequel out in the previous year. The drop was expected. Net income was 41 cents per diluted share, a figure which includes a $0.03 tax benefit. Even so, DreamWorks Animation beat expectations. Wall Street was counting on only 32 cents per share.

Operational cash flow isn't faring too badly. It increased 9%, and the company seems to be doing well enough in terms of generating revenues from its portfolio of films. Kung Fu Panda helped to drive the quarter, but it isn't done yet, as the home-video release should affect Q4 in a most positive manner.

Now that the data is out, DreamWorks Animation is really readying itself for its next big test. Madagascar: Escape 2 Africa, the sequel to the hit Madagascar, is waiting in the wings. In fact, the wait is almost over. The film is due November 7, and the company needs to post big numbers on this one.

We all expected Disney's (NYSE: DIS) High School Musical 3: Senior Year to be the number-one picture at domestic theaters over the weekend, but I have to admit, I thought it might do a little better than the $42 million it's grossed so far (according to estimates at Boxofficemojo). That's still a very decent figure for a movie that began its life on the small screen. And one has to wonder if Disney now believes that a fourth Musical movie might actually be ready to compete in the summer box-office season. If the budget were low enough to justify the risk, I might be for it.

We also had a good idea of what would come in second. Lions Gate Entertainment's (NYSE: LGF) Halloween tradition, a Saw sequel, took up that respectable position. Saw V grossed approximately $30 million. Lions Gate was quick to issue a press release over the weekend pointing out the film's success as well as the financial impact of the Saw franchise as a whole. The numbers are compelling (worldwide theatrical and home-video revenues of the entire series have passed $1 billion) for the low-budget properties.

But, as I noted in an earlier post, the opening-weekend grosses for the Saw flicks have plateaued. Even though we are told by Lions Gate that the Saw franchise has taken in over $1 billion in revenues, exactly what is the profit margin on those revenues? And what is the assumed growth rate of the franchise over time versus the assumed growth rate of the budgets/marketing expenditures? If you look at the following chart, you'll note that cumulative domestic grosses for Saw II through Saw IV have been in decline. Total worldwide grosses for Saw IV declined compared to Saw III.

Unless you are completely out of touch with pop culture, you probably know that Disney's (NYSE: DIS) High School Musical 3: Senior Year is coming to theaters today. However, there's another film that's coming out as well, one that's darker, and quite a bit bloodier to boot: Lions Gate Entertainment's (NYSE: LGF) Saw V.

This is actually going to be one of the most exciting weekends ever for box-office observers. Exactly how high will Musical gross over the weekend? That's the big question. I've read guesses that center around the $30 million mark. I've seen one pundit predict $40 million. Well, let's consider the following. Saw IV was released last year around this time. It grossed about $31 million in its debut weekend according to data at Boxofficemojo.com. Saw II and Saw III grossed a similar amount in their respective opening weekends. Given the fact that the Musical franchise has captured a lot of zeitgeist equity the last couple years, and given that it isn't limited by an R-rating, I'd have to assume that we're looking at between $40 million and $50 million for the opening weekend. I say it will be toward the upper end of that range.

Now, where does this leave Saw V? Actually, this weekend is even more interesting than it appears at first glance. Lions Gate's stock has been declining along with the market, but it certainly also has critics in terms of the quality of its earnings and cash-flow growth, as well as the fact that it spooks some people because it has direct exposure to the very risky movie business. The studio, without a doubt, needs Saw V to hit it out of the park. It desperately needs to be number one. For one thing, the opening grosses for the franchise have, as I sort of alluded to earlier, plateaued. To me, that means that Lions Gate is increasing its risk with every new sequel. For another thing, investors who are losing money on Lions Gate want to know that management is capable of determining the life cycle of a franchise; they want to have faith that the powers that be recognize when sequels should stop, or when they should bypass theatrical exhibition and see release on other media. If Saw V doesn't live up to its gore-rich reputation, then Wall Street might lose faith in Lions Gate. From my perspective, I have to wonder if people aren't getting sick of the movies. I love the concept, and the character of Jigsaw, as portrayed by Tobin Bell, is a brilliant psychotic icon of industrious ingenuity, rampant contradiction, and cruel philosophical wit. That being said, here's the bottom line: the first movie was undeniably great, the rest were...eh, letdowns. The novelty, for me at least, was contained within the frames of the first flick only.

I thought Oliver Stone's cinematic treatment of George W. Bush, simply titled W., was going to be the number-one film over the weekend at domestic theaters. According to Boxofficemojo, it wasn't. The movie, distributed by Lions Gate Entertainment (NYSE: LGF), came in fourth place with an estimated $10.5 million take. Truth be told, I forgot that Mark Wahlberg's Max Payne came out this weekend as well. I guess that would give Stone some tough competition, to be sure. That project, which came to the market courtesy of News Corp. (NYSE: NWS), took the top spot with $18 million. Disney's (NYSE: DIS) Beverly Hills Chihuahua and News Corp.'s The Secret Life of Bees came in second and third, respectively. Actually, those two films, plus W., had close box-office estimates at the time of this writing, so it is conceivable the ranking order could change slightly depending on what final stats reveal.

Even though Stone didn't succeed this weekend in terms of the multiplex rankings, shareholders of Lions Gate can appreciate one internal metric related to this box-office story. W.'s per-theater average in terms of dollars was similar to Max Payne's. The former's average was calculated to be roughly $5,200 per theater, while the latter's was about $5,330 per location (again, this is as of the estimates available to me at the time of this writing). Also, W.'s average beat Chihuahua's. So, you have to wonder what the rankings would have been like had the movie opened in more theaters. Coming in fifth place, by the way, is Viacom's (NYSE: VIA) Eagle Eye. That's grossed a decent $80 million so far. I don't think it will hit $100 million, but it should get close.

I'll tell you, Lions Gate's stock is pretty cheap. Have you been following the price action? It's been volatile, as you obviously would have guessed, and it closed at $6.95 per share on Friday, having risen 7% during that session, perhaps in anticipation of the W. opening. I've been keeping my eye on the stock and have said in the past that it's an interesting trading idea below $9 per share. Obviously, that thesis has changed since current market sentiment seems to be as rational as the mind of The Joker, but if Lions Gate breaks its 52-week low of $5.59, then I'll definitely have to strongly consider it ahead of Saw V, which is set to open next weekend. Of course, I'll be very, very careful about pulling the trigger, and will consider many things before buying. Like the strong possibility that sentiment will drop even further and take Lions Gate down to low single-digit levels. Don't think it can't happen. That would be even scarier than surviving a jigsaw trap (well, not really, but you know what I mean).

Disclosure: I own Disney; positions can change at any time.

Okay, here is an absolutely brilliant idea. And no, I'm not being sarcastic. According to this blurb at The Hollywood Reporter, News Corp. (NYSE: NWS) is interested in doing a sequel to the classic 1987 film Wall Street.

Some of you younger investors out there might not be familiar with the movie, but perhaps you're familiar with the now-famous quote "Greed, for lack of a better word, is good." It was uttered by the loathsome Gordon Gekko, whose alliterative name almost oozes corporate scandal and villainy. That character was played by Michael Douglas. Wall Street was directed by Oliver Stone and it portrayed the evil side of capitalism, replete with insider trading and share-price manipulation. It's considered a classic, iconic fictional snapshot of the current zeitgeist at the time: the only thing that mattered was upward mobility and accumulation of as much net worth as conceivable without consideration for the little guy. It came out around the time of the '87 market crash, so it had that going for it.

This is why News Corp. needs to fast-track the project. According to this source from May of last year, a sequel to Wall Street was already in the works. Obviously, the fact that The Hollywood Reporter mentioned the project this week means that execs at Fox feel that the timing for a sequel is approaching an optimal point. In fact, they really should try to get it out into the marketplace as quickly as they can, and hopefully with Michael Douglas reprising his role as Gekko (Douglas' return is not set in stone at this point). Not only could the movie gross a decent amount at the box office, but think of the synergy potential here.

News Corp. is fighting a battle with General Electric's (NYSE: GE) CNBC as we speak. The Fox Business Channel wants to take away as many viewers as possible from the stock-market network. Problem is, CNBC is a very powerful brand in its arena. Of course, that doesn't deter the pit bulls at Fox. If you had to describe the media company with only one word, that word would, by necessity, be a hyphenate: ultra-competitive. In fact, Fox Business Channel recently slammed BloggingStocks' own Jim Cramer in a recent promo (see a piece on this subject by Zac Bissonnette).

General Electric Company's (NYSE: GE) NBC Universal needs all the help it can get if it wants to remain part of the famous Dow component. After all, how many times have we heard in the last several years that the huge industrial conglomerate should get rid of the media asset? Well, maybe a little glitzy dose of DreamWorks will increase the perceived value of the movie/TV division in the eyes of a management in the midst of financial-crisis turmoil.

After wondering whether it would be Universal, The Walt Disney Company (NYSE: DIS), News Corp. (NYSE: NWS), or Time Warner, Inc. (NYSE: TWX), the new DreamWorks has decided to strike a distribution deal with Universal after it became a free agent following its split from Viacom (NYSE: VIA). This is according to The Hollywood Reporter. The transaction reportedly means that Universal will be releasing six films per year from DreamWorks starting sometime in '09.

Of course, we don't know all the details yet, but since DreamWorks is being funded by Indian media-investment entity Reliance Big Entertainment, Universal will probably only end up with a modest distribution fee. Still, any studio would have loved to have had bragging rights in terms of the famous director. It was never meant to be a fair competition, though, since the move to Universal was pretty much set in stone. Spielberg has had a special relationship with the company for a long time, and it was considered a given that DreamWorks would end up with a pact at the classic studio.

Well, I have to hand it to The Walt Disney Company (NYSE: DIS). The company is doing well with Beverly Hills Chihuahua. Early estimates for the three-day box-office weekend at domestic theaters place the movie at the top spot (according to Boxofficemojo). Believe it or not, the talking-canine project has been in first place for two weekends in a row. I guess I got my answer in terms of the playing power of the Disney pooch. It took in about $17 million as of this writing, and it has grossed over $50 million thus far.

With Halloween approaching, you just knew Sony Corporation's (NYSE: SNE) Quarantine picture was going to do decently. It came in second, with about $14 million to its celluloid credit. Body of Lies from Time Warner, Inc. (NYSE: TWX) was third, and Eagle Eye from Viacom (NYSE: VIA) came in fourth. The latter is doing moderately well, not a huge hit, but not quite a disappointment, either, considering the box-office time period we're in. It currently has $70 million in cumulative grosses. I thought Eye was going to be a much bigger hit, but the market apparently is telling me that I was wrong on that count. The Express, by the way, bombed. It was released by General Electric Company's (NYSE: GE) Universal, and it grossed about $4.7 million, meaning it may be in either sixth or seventh place after final numbers are tallied. Not good at all for the football feature's debut weekend.

Disney's movie division will hopefully be able to maximize the profit potential of Chihuahua. I'm sure the powers that be are already at work on turning this concept into a franchise. That's what Disney likes best: not just one picture, but a whole string of them that can drive merchandise sales and theme-park rides. Who knows what will happen, but as an aside, I can honestly say that the stocks mentioned above are looking pretty interesting in terms of the price-cuts they've been given by the slashing claws of all the bears out on Wall Street. Long-term investors looking for exposure to the media sector should give them some due diligence (but always remember the context of the current volatile market, where anything cheap can suddenly get cheaper still).

Disclosure: I own Disney and GE; positions can change at any time.

Are you a Disney (NYSE: DIS) shareholder? If so, then you're pretty happy about the box-office weekend. According to Boxofficemojo, Disney's Beverly Hills Chihuahua was number one over the past three days at domestic theaters. It is estimated to have grossed $29 million. That number may change when final stats are released later on, but it won't change the ranking, since the movie in second place, Viacom's (NYSE: VIA) Eagle Eye, grossed around $17.7 million.

Eye was last week's number-one film, and I have to say, I thought the thriller would remain in the top position this week. That's how Hollywood works, though. You're on top one minute, and then the next minute, you're on the way down.

Movies are a very risky business, and I have been critical of how Disney manages its movie operations. I am a shareholder, and I care about how much capital is put at risk on each project and how the deals are structured. Are they structured with the shareholder in mind, or are they tipped toward the pampered stars who demand big percentages of the grosses while not taking on any risk?

Viacom (NYSE: VIA) scored over the weekend at the domestic box office. Ever since I saw the trailer for the movie Eagle Eye back in the summer, I had a feeling this was going to turn out to be a hit. According to Boxofficemojo, the thriller took in $29 million since opening on Friday as of early estimates.

In fact, I can't understand why Eye wasn't placed in a summer slot. I suppose there are some legitimate reasons, such as the density of releases during the season, but this one begged to be competing in the busy time period. Steven Spielberg served as executive producer on this one, and Viacom's Paramount distributed it on behalf of the DreamWorks brand. Of course, Spielberg and DreamWorks will be departing from the Viacom fold, perhaps heading to General Electric's (NYSE: GE) Universal to set up a distribution deal.

Coming in second was Time Warner's (NYSE: TWX) Nights in Rodanthe. It was a distant second at an estimated $13.5 million. Got to be honest, I didn't hear of this movie before I started writing this piece. Sony's (NYSE: SNE) Lakeview Terrace was in third place with $7 million. Last week, Sony was on top with that picture.

Since General Electric (NYSE: GE) is reeling from the financial crisis that's currently gripping Wall Street, there's no doubt that a little Hollywood magic might be in order, something to take its corporate mind off reality for at least a little while.

Well, according to The Hollywood Reporter, that might happen. Steven Spielberg needs to move his DreamWorks company over to a new studio, and it looks like NBC Universal is at the front of the pack in the race to secure his business.

The pairing of Spielberg and Universal would be logically sound. He certainly had a better time over at that lot than he did at Viacom's (NYSE: VIA) Paramount. There is, however, one other studio that is in the running. The article seems to imply that Disney (NYSE: DIS) has a shot with Spielberg as well, although the way I read it, the Mouse is a distant second in the contest. Disney wouldn't be a good fit. As much as CEO Bob Iger would love to hold meetings with the most famous director in Hollywood (and the world, for that matter), a DreamWorks distribution deal just doesn't make sense since the company is really into getting a lot of bang for its capital buck.

Earlier in the month, I caught an interesting article from on Reuters about Disney (NYSE: DIS) and its movie division. The president of Disney Studios, Alan Bergman, speaking at a conference, stated that profit margins have jumped five-fold at the studio. The reasons behind this success include an aggressive attack on costs and a streamlined film slate. Instead of releasing a whole boatload of features, why not focus on Disney-branded flicks? That's what Disney has been doing, making bigger bets on a smaller number of projects. Things have been going so well that Bergman said that it was conceivable that the Mouse might not need to seek partnerships with funding entities to spread a portion of the risk. What this means is that, instead of offering up a percentage of celluloid profits to a funding corporation in exchange for an investment in the budgets, Disney will just pay for its movies itself and not transfer any risk. There's an obvious reason for this: Disney then gets to retain all profits instead of sharing them.

Well, it should be stated that Disney has not said that it will definitely do this. According to the article, Bergman just mentioned that it's possible that Disney could do this if it wanted to. My opinion? End outside financing. Hey, if I want to go and make a film, I'm going to have to use other people's money, I have no choice. But Disney? The company is big enough to not need any help in financing. The problem here is that human nature comes into play. When a studio division is doing poorly, then co-financing seems attractive. When a studio division is firing on all cylinders, then becoming risk-averse doesn't appear so fetching. Well, I think any media company producing films these days should really stop and try to understand the movie business for what it is. It's always going to be a risk. Doesn't matter if you have a huge star in a picture or not. It might fail either way. But when the windfall comes, when that big hit is found, you want to own 100% of the profits. This not only goes for Disney, but it applies to others such as Viacom (NYSE: VIA), General Electric's (NYSE: GE) Universal, and Time Warner (NYSE: TWX).

So, let's see. Lions Gate Entertainment (NYSE: LGF) had the number-one film last weekend with Bangkok Dangerous. All I can say is what a difference a week makes, because the film dropped to position number eight this past weekend, according to early estimates from ace movie site Boxofficemojo.com. Of course, this wasn't entirely unexpected, since Dangerous' opening was kind of weak. But fear not, shareholders of Lions Gate, because one of the studio's biggest stars, Tyler Perry, opened relatively well.

Tyler Perry's The Family That Preys took in approximately $18 million, which was good for second place. Burn After Reading held a slight margin of victory over Perry's film. It currently is in first place with about $19.4 million to its credit. It's entirely possible the two could switch places once final figures roll in, but I have a feeling this ranking will stay.

However, one sad thing about Perry is that, important as he is to Lions Gate, his opening weekends seem to be falling in strength. According to this chart at Boxofficemojo,The Family That Preys didn't do as well as the previous two Perry features. Meet the Browns and Why Did I Get Married opened with $20 million and $21 million, respectively. The chart also shows that the final domestic grosses on his films have been in a decline.