Disney said on Friday that it has stopped selling a line of panties for girls after parents in Britain complained about the message printed on them.

The  underwear, made for 'tween girls, invited the the reader  to  "Dive In" and was, according to company officials, themed for a swimming pool scene from the Disney Channel hit movie,"High School Musical 2."

Ahh to have been in that product brainstorming session!

In that scene, "HSM2" boyfriend and girlfriend, Zac Efron and Vanessa Hudgens, sing about their love and dance in and around a swimming pool at the country club where both of their characters work during the summer.

"Unfortunately, an oversight was made and the text on the underwear was used out context," Disney said in a statement. "This product will not be part of any forthcoming collections and the remaining product has been removed from shelves."

Heartbreak is looming for the miniscule percentage of Netflix users who use the site's "Profiles" feature that allows them to share a single account with another user of, shall we say, differing cinematic tastes.

A reported 1-2 percent of Netflix's 8.2 million subscribers use the feature to maintain separate queues, or lists of movies, on the same account to avoid arguing over what movie to watch next. This is especially important in the case of married couples whose movie tastes differ vastly from "Terminator" for one to "A Passage to India" for the other.

The company said it will discontinue the feature in September to "allocate engineering resources" to growing its subscriber base and "Watch Now" content streaming feature. (And by the way, if you are one of those 1-2 percent you can "allocate" an e-mail to Netflix CEO Reed Hastings. That's him up above, holding the DVDs).

Netflix spokesman Steve Swasey said the company "understands" the disappointment of the subscribers who learned how to use the feature and considered it crucial in maintaining family home entertainment harmony -- but they are still out of luck.

In September, the carefully crafted secondary household queues will be tacked onto the bottom of the primary account holders' queue, Swasey said.

Ah the humanity!

Disney shareholders, normally a sunny bunch whose concerns run toward getting more park perks and a DVD release date for the 1946 film “Song of the South,” showed a darker side on Thursday at the company’s annual meeting in Albuquerque, New Mexico.

Among the usual questions about new rides, dividends — and yes, the loved and hated “Song of the South” — were unusually pointed observations about the size of CEO Bob Iger’s pay package.

An Albuquerque teacher drew a smattering of applause from fellow shareholders when he told Disney execs he was “troubled” by Iger’s $27.7 million compensation package in fiscal 2007.

“More should be going back to investors who are taking the risks,” Pard said. “Twenty-seven million is a lot to pay someone for one year.”

While effusively praising Iger and Disney, a female shareholder agreed with the teacher and suggested the Mouse House lead the way in bringing down executive salaries.

“Can’t you make it on $20 million a year?” she asked Iger. “That gentleman is a schoolteacher and he makes in a year what you make in three hours. It’s just getting too excessive.”

But a Clovis, New Mexico shareholder came to Iger’s defense: “I would like to say that Mr. Iger is entitled to every damn penny that he makes.”

Iger let Chairman John Pepper defend him in the salary talks, and later could not be reached to comment on the shareholders’ pay cutting scheme.

Oh, and don’t hold your breath on seeing a DVD release date soon for “Song of the South”, whose portrayal of slavery Disney fears may be offensive to modern audiences. Iger again told shareholders the issue is “complicated” and Disney was still considering it.

Democrats - and especially Hillary Clinton — look like winners this year to the Walt Disney Co.

The House of Mouse has given 64 percent of its total political contributions so far in the 2008 election cycle to Dems and has showered Clinton with more Mickeybucks than any other presidential contender this year, according to data compiled by the Center for Responsive Politics.

Disney has shelled out more than $424,585 in political donations during the current election cycle, putting its election spending on track with its 2004 total, the data showed, and  maintaining the favoritism it has shown for Democrats since at least 1990. 

While Democrats have long controlled the California statehouse, Disney operates its home resort, its profit powerhouse, Walt Disney World resort, in GOP-controlled Florida.

It isn’t saving the money it’s not spending on Republicans either. The data showed the company’s lobbying budget has more than doubled to $4.5 million over the past decade.

In the media world, however, Disney’s aggregate campaign spending was dwarfed by that of Time Warner Inc, which has laid out more than $1 million so far this year mainly to Democrats. If its contributions to the presidential candidates are any indication, the media conglomerate sees Barack Obama as the next Commander-in-Chief — but only by a slim margin.

As Americans head to the polls this election season to consider who can best solve pesky national problems like health care, immigration and the Iraq war, the Walt Disney Co is pitching in with its own crucial primary of sorts: a contest to elect America's Prom Queen.

Disney's ABC Family network has devised a reality show that pits a field of 10 teenage girls against each other in a nationally televised contest that is sure to feature all the (ahem) camaraderie and civility of this year's real presidential race.

The prom queen candidates will be tested on such hot button issues as "sense of style," "ability to dance", "prom spirit" and "planning skills."

Just as in the real primary system, where the will of voters takes a back seat to the whims of superdelegates, a celebrity-stuffed "Prom Committee" will choose the front-runners in five weekly rounds of voting before presenting a final matchup to the nation.

ABC Family puts Prom Queen 2008 before voters, on St. Patrick's Day, which seems appropriate somehow. Cheers Mickey!

Are you willing to surrender the power to zip past ads on TV? Disney and Cox want to find out.

The Walt Disney Co and cable operator Cox Communications Inc have offered some of the most popular  prime-time ABC shows, as well as some ESPN games, as an advertising supported, on-demand service in a trial basis in Orange County, California for the past several months. They’re finally ready to roll it out nationwide later this year. Disney’s also talking to other TV service operators about similar arrangements.

The catch? ABC will sell ads for the shows available in the on-demand service and they want to make sure you watch them.  To do that, Disney and Cox disabled the popular fast-forward feature.

The companies carefully polled viewers to make sure they were okay with watching up to 10 30-second ads per hour, less than the average  30 spots on network television, in exchange for being able to access prime time shows, including “Desperate Housewives,” “Lost”, and “Grey’s Anatomy”, for free.

More than 90 percent said they rather watch a few ads than pay for ad-free shows, the companies reported on Monday.

For Disney, the idea isn’t all that new. They borrowed the template from abc.com, which has been a big hit with viewers despite requiring them to click through a few commercials to watch ABC prime-time shows online for free. The Web site’s broadband player has served up 260 million streams since it went live in mid-2006.

Cox says it has no current plans to fiddle with the fast-forward on its regular cable channels. Viewers who can’t imagine sitting through ads no matter what can rest easy, for now.

(Photo: Reuters / Disney CEO Robert Iger at the 2007 Consumer Electronics Show)

The 11-week-old Hollywood writers strike may have turned TV into a rerun wasteland, but the creative juices are still flowing online, where Internet media syndicator 60Frames launched seven new series on Tuesday night.  The series, created by some of the same scribes now walking picket lines, will be distributed on sites like YouTube, MySpace, iTunes, Veoh and Joost, and will reach 90 percent of online video watchers, 60Frames CEO Brent Weinstein said. Episodes range in length from 90 seconds to 3 minutes.

The six-month-old company signed up veteran TV writers like Brent “The Office” Forrester and “Homicide” and “Oz” creator Tom Fontana, and has plans to syndicate more than 50 original series over the next 12 months, Weinstein said.

For writers who saw their development deals voided last week by the major TV studios, the Internet is starting to look pretty good, he said:

There are a lot of really talented writers who are immediately available, today, who would have said, “Let’s talk while I’m on hiatus”… . The world is going in a new direction in recognition of the fact that many talented artists wanted to create original programming for the Internet… in an environment where they had creative control and financial upside.

(Photo: Reuters)

Wall Street spent a lot of time agonizing over whether the Walt Disney would kill the freewheeling culture that made Pixar a hitmaking machine when Disney bought the Emeryville, California studio in 2006.

Two years after the deal was announced, Disney-Pixar President Ed Catmull is pleased to repot that rumors of the studio’s demise were greatly exaggerated. Far from seeing its creativity stifled, Pixar has exported it to its beleaguered sister studio, Walt Disney Animation.

Catmull: The creative team (at Disney) is operating in a way they weren’t allowed to do. They love the way they are working. The spirit of the place is better than it was two years ago. I am really proud.

The secret to Pixar’s independence from its Disney overlords is Disney CEO Bob Iger, who as former Capital Cities/ABC president when Disney bought the company “knows how a larger corporation can smother smaller things,” Catmull said.

“By virtue of the fact that he knew, he put into place a mechanism to protect (Pixar),” Catmull said.

(Photo: Reuters/ Catmull (right) accepting Academy award for scientific and technical achievement in 2001)

See? We told you that the Huffington Post was about to enlist some new talent.

Former CNN anchor Willow Bay has signed on as an editor-at-large at as part of a recent expansion at the news-and-blogs site run by political commentator and one-time California gubernatorial candidate Arianna Huffington.

Bay, who is married to Walt Disney Co. CEO Bob Iger, will oversee the site’s new lifestyle section, called Living Now, and will “help shape the site’s recent content expansion beyond its noted politics coverage, on the business, media and entertainment pages,” according to a statement.

Bay, a former model, currently hosts and produces a feature series called “Spotlight 25″ on Lifetime Television, a cable network partly owned by Disney.

Netflix Chief Financial Officer Barry McCarthy let slip a few morsels about what the online DVD rental company’s electronic movie delivery system could look like when it rolls out in 2008.

“It will not be a PC, it will be a free-standing device,” McCarthy said while musing about next-generation movie rental at the Goldman Sachs conference this week in Las Vegas.

Netflix’s solution appears to hew closely to the streaming model it now features on its Web site, based on McCarthy’s comments about how the company and competitors will bridge the gap between the Internet and the television.

“If you are in the download market, which we are not, then you need a hard drive,” McCarthy said. To stream video to a television, “you need a WiFi and a video chip and it can be relatively inexpensive,” he added, while noting that “consumers don’t want another device in their homes… that’s an impediment.”

“If we had a box or were embedded in a device that talked to Netflix’s Web site, it probably wouldn’t talk to Apple’s Web site or anybody else’s Web site,” he mused.

McCarthy also said Netflix saw little competition in their online rental space from download-to-own models like Apple Inc’s iTunes because “the consumer value proposition is thin.”

Pressure from traditional retailers will also keep online movie purchases more expensive than rental for now. 

“I get why there is no structural shift in pricing — Wal-Mart would go berserk and the studios are dependent on Wal-Mart for revenue from the sell-through market…So again, they are not going to blow themselves up by changing their pricing…In the long run if that business model fails they may shift to something else, but not at the moment.”