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Fundamental changes to the business models of media companies require a focus on core content franchises; as such, it's essential to be selective and stick with the leaders, writes John Persinos, of Personal Finance.

Two companies that lead the media pack and offer the greatest growth potential over the long haul: The Walt Disney Co. (DIS) and Viacom (VIAB).

These media companies got their start in conventional media, but they've positioned themselves to not only survive, but also, to thrive in the digital era.

Let's start with the empire that Walt built. Disney boasts several strengths that most media companies would envy—chief among them is diversity.

The company operates in a wide range of businesses, including theme parks, TV stations, retail stores, and cruise lines.

The company's biggest source of revenue, (45% in the latest quarter), derives from the media networks division, which owns the ABC television network and several popular cable channels, including ESPN, ABC Family, the Disney Channel, and A&E.

As the global economic recovery gets underway and tourism accelerates, Disney's parks division should continue to perform well.

Also encouraging is the company's recent announcement that it is putting content into the pipeline with Lucasfilm, progenitor of the Star Wars franchise, which Disney acquired in October for $4.1 billion.

What's more, Disney owns the rights to some of the most beloved and popular films in cinematic history, constituting a portfolio of intellectual property that will continue generating revenue for decades to come.

The stock's 12-month trailing price-to-earnings ratio is a bit pricey at 18.9, compared with the trailing P/E of 13.8 for the diversified entertainment industry as a whole, but we think the modest premium is well worth it.

Viacom operates various television networks including Comedy Central, Nickelodeon, MTV, VH1, and Spike. The company also owns the celebrated Filmed Entertainment segment under the Paramount Pictures brand.

Viacom also is a significant supplier of content to pay TV, generating the majority of its earnings from cable networks. And it's aggressively moving into the digital realm.

In June, Viacom inked a deal with e-commerce giant Amazon.com (AMZN) for distribution of a wide variety of archived Viacom-owned programming.

And in August, it was announced that Sony (SNE) and Viacom had reached a preliminary agreement to carry Viacom's cable channels on Sony's planned Internet-based TV service, a deal that could signal the start of a new era of competition for entrenched cable and satellite providers.

Meanwhile, Viacom boasts one of the strongest balance sheets in the entertainment business. The company shoulders roughly half the level of average debt in its sector, with a debt-to-equity ratio of 1.3 times compared with the industry's 2.6 times.

This healthy liquidity comes in handy, allowing Viacom to better withstand the roller coaster ride of its studio business.

Blockbusters that appeal to a global audience are increasingly the norm in the movie business, leading to films that can make—or lose—mind-boggling sums.

With a trailing P/E of 17.6, Viacom also trades at a slight premium to its peers. However, to borrow a line from its Star Trek franchise, this stock should live long and prosper.

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Tickers Mentioned: DIS, VIA, AMZN, SNE

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