After a period of falling ratings at MTV Networks, declining film revenues at Paramount, and a painful restructuring, Viacom CEO Philippe Dauman used his quarterly call with analysts today to urge them to look ahead. “I have a great deal of confidence in the future of Viacom,” he says. “We can look forward to renewed growth in the years ahead” as entertainment becomes more digital and mobile.
While there’s been a lot of attention on cost cuts and layoffs, Dauman says that he’s now investing in people and programming. The goal is to become “less reliant on the old, not so relevant, programming we acquired years ago” while favoring “new, more engaging, more live in terms of participation, kind of television content for our new audience.”
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He isn’t turning his back on current cable and satellite distributors. Viacom’s relationships with them “remain broad and strong” — and its channels “continue to show strength in the traditional, linear world.” For example, he says Nickelodeon attracts more kids on a Saturday morning “than YouTube does in a month.” The CEO also flagged the change at Comedy Central’s The Daily Show as Jon Stewart prepares to leave and new host Trevor Noah brings “his distinct take to a new generation.”
Dauman adds that Viacom has already sold about 30% of its ad inventory in the upfront market, which begins early for kids programming at networks including Nickelodeon. He described the pricing as “robust.”
He chided TV providers, though, for dragging their feet in rolling out TV Everywhere streaming and not marketing the current pay TV bundle. “That does require investment. But that investment, if it’s accelerated, will pay off.”
Yet his presentation, for the most part, emphasized ways Viacom hopes to capitalize on opportunities that don’t depend so heavily on traditional TV outlets and Nielsen audience measurement. The company is vigorously building its own data services that encourage advertisers to spend on digital and on-demand programming.
He doesn’t fear that the programming Viacom sells to online services will cannibalize its ad-supported TV channels although he says the company must “be very thoughtful and selective” about those sales. He noted that Nickelodeon content is on Amazon but not on Netflix “at least for the moment.”
Dauman didn’t take sides in ESPN’s breach of contract suit against Verizon’s FiOS for an offering that splits some basic cable channels from the core bundle. But there’s been “a lot of hype” about the potential appeal of so-called skinny bundles, designed to appeal to people who don’t want to pay for channels that they don’t watch. Similar efforts failed to catch on, and “I don’t think it’s going to be a significant change.” He’s not worried about being left out of some offerings because “all of our networks will keep getting better and better.”
Dauman also talked up Paramount’s “rich development” with upcoming sequels to Terminator and Mission: Impossible — which he says is “certain to be a blockbuster” — as well as a growing TV production slate.
Did the sales pitch work? Viacom shares, down 4% so far in 2015, are flat in early trading. Some 16 analysts have a “buy” on the stock while 12 rate it a “hold” and six recommend “sell.”
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