Web Failure Is What Keeps Disney Down

This column was originally published on RealMoney on Nov. 13 at 11:53 a.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

Did Disney(DIS Quote) really have that bad a quarter? This company's been pummeled after its quarter. It makes little sense to me on 13% growth and 18 times earnings. That's pretty chary.

One theory is that there's no more upside, that prime-time television costs too much -- even though Disney is winning that battle -- and you can't ever make as much money as you used to in prime time. That's the NBC theory. NBC announced that it's cutting the hours of prime time because the costs can't be justified. The winner of the prime-time wars these days makes about half of what it used to a half decade ago, or so the theory goes.

I like this theory, but the problem with it is that Disney has a fabulous and envious protection plan in movies, which can blunt any slowdown from TV. These guys are really good at movies, and the animated movies are cheaper to produce than TV shows and have a great record. ...