Viacom CEO Philippe Dauman is a lot happier talking about his overseas expansion opportunities than his domestic challenges, based on his conversation today at an investor conference with MoffettNathanson Research’s Michael Nathanson.
The CEO resolutely positioned Viacom as a company that has found its bearings following a period of declining ratings and a painful restructuring that resulted in widespread layoffs and a $785 million write-down.
“We are producing more original programming than we ever have with big scripted shows,” Dauman said. That includes Paramount’s Minority Report, which Fox picked up this week, and The Alienist, to run on TNT. “We have worldwide rights on these series,” the CEO says. And by keeping a lid on costs, production “doesn’t require a great investment.”
Dauman says that new shows also will help to fix his company’s ratings woes — though he maintains that they largely reflect Nielsen’s inability to count young viewers watching its programs on digital platforms. The audience analysis company wants “to measure on tablets and other devices, but they’re not there yet. … I’m hoping that will start improving as early as this year.” (Nielsen says that TV networks won’t let it include a lot of the data it does capture.)
Viacom’s doing an end run around Nielsen, offering ad buyers information that the entertainment giant captures from its websites and apps, as well as third-party data. “We have in the U.S. about 130 million individualized IP addresses where we know what they’re viewing,” Dauman says. That enables it to help advertisers target spots to reach the most promising potential buyers.
Do advertisers accept Viacom’s numbers? Dauman says they do: The company provides “measurable metrics that are transparent” and are “more valuable to them than what they had before.”
Meanwhile, he’s eager to put Viacom’s channels and programming on digital platforms — even in so-called skinny bundles, like the one from Dish Network’s $20-a-month Sling TV that currently doesn’t include Viacom channels. Some analysts say they might threaten the lucrative pay TV bundle that requires subscribers to pay for a lot of channels that they don’t watch. The Viacom chief says that it’s “not a great strategy to manage customer dissatisfaction.”
He makes a similar case to challenge small cable operators including Suddenlink that have dropped Viacom and say the cost savings outweigh the customer losses. “Customer dissatisfaction is not a great long-term business strategy,” Daumon said. “It is a very wise business decision for people to enter into partnership with us.”
Besides, the exec says that Viacom benefits from expansion opportunities overseas. “Our international growth story is huge. We’re launching networks at a pace I’ve never seen here.” He singled out the UK, where Viacom recently bought Channel 5. Between that and its pay TV channels “we are a major media company with scale. It is a home run deal.” He also talked up India, where Viacom controls the No. 2 Hindi-language channel, Colors. The company plans to launch additional regional channels in different languages. That could pay off: India is “a highly populated country open to foreign investment.”