PARAMOUNT, VIACOM GET POUNDED AGAIN

Michael Nathanson of Sanford C. Bernstein Media has become the latest analyst to issue a stinging appraisal of Viacom management, in this instance focusing on the operations of Paramount. Although the studio is ranked No. 2 among the Hollywood majors, Nathanson notes that much of its box-office success comes from third-party distribution deals with Marvel and DreamWorks Animation. Without them, Paramount would rank no higher than fifth, Nathanson observes. Those deals with Marvel and DreamWorks Animation, he notes, produced $168 million in operating profit, while Paramount's own movies have resulted in losses of around $80 million. He says he expects the studio to take a writedown on the Eddie Murphy debacle Imagine That, which reportedly cost $55 million to produce plus $35 million to promote and distribute but which has so far earned less than $12 million. On Monday, Analysts at Caris & Company downgraded Paramount's parent Viacom from "average" to "below average." And on Friday, analysts at Pali Research downgraded Viacom from "buy" to "neutral."

NETFLIX CHIEF PREPARES FOR DIGITAL RENTALS

Netflix CEO Reed Hastings says that while his company added more subscribers in the first quarter than at any time in its history, he believes that his core operations -- DVDs by mail -- will decline and will eventually be replaced by movies sent directly to customers' TV sets over the Internet. In an interview with today's (Wednesday) Wall Street Journal, Hastings said that at the end of March, Netflix had 10.3 million customers -- 25 percent more than it had a year earlier. He observed that his greatest challenge is to persuade studios to allow Netflix to license newer movies, since many of the studios have their own online or cable outlets and don't want competition from Netflix.

MOVIE REVIEWS: TRANSFORMERS: REVENGE OF THE FALLEN

A second round of reviews for Transformers: Revenge of the Fallen turned up in major newspapers today (Wednesday), and, by and large, they were no less negative than the ones that turned up a day before. As if sensing that his review will largely go unread by the people seeing the movie, Michael Phillips in the Chicago Tribune mentions a scene in which an aged Autobot utters the line "I'm too old for this crap." Comments Phillips: "No matter, pal. You're not in the target demographic." In the Boston Globe, Ty Burr calls the sequel "2 1/2 hours of tumescence disguised as a motion picture." John Anderson in the Washington Post brands it "simply despicable." Betsy Sharkey in the Los Angeles Times concludes that the movie "is in-your-face, ear-splitting and unrelenting. It's easy to walk away feeling like you've spent 2 1/2 hours in the mad, wild hydraulic embrace of a car compactor." Several critics do applaud the astounding effects from San Francisco-based ILM. "But without dynamic contrasts," writes Liam Lacey in the Toronto Globe & Mail, "even the destruction of internationally famous landmarks begins to feel like staring at wallpaper after a couple of hours." But A.O. Scott's review in the New York Times seems surprisingly complimentary to director Michael Bay. "Despite the tediousness of his stories and inanity of his visual ideas, he always manages to keep you laughing and shaking your head in disbelief at the outlandishness of his cinematic spectacles," he writes.

SIGNIFICANT SLICE OF POPULATION ADMIT THEY SWAP FILES

Fifteen percent of consumers living in France, Germany, the United States and Britain who download video admit that they do so illegally via BitTorrent sites, according to a study from Futuresource Consulting. The figure rises to 25 percent in France. Among the 2,500 persons who participated in the survey, 90 percent said that they had never paid for TV news content or primetime TV shows. Some two thirds of U.K. and U.S. respondents indicated that they watch videos on a computer screen, while virtually all of the remainder said that they did so on a TV set connected to a laptop.

Cinemark Movie Club