Viacom narrows focus to 6 brands
Viacom Inc will focus on five of its cable television brands and the Paramount movie studio, license less content to video streaming companies and consider selling assets as part of a turnaround plan.
The New York-based media company, which has struggled with declining domestic advertising revenue and poor ratings, also reported stronger-than-expected quarterly results that benefited from growth in its domestic affiliate and theatrical revenues.
Viacom said it was giving top priority to its BET, Comedy Central, MTV, Nickelodeon and Nick Jr channels as well as Paramount. It will reorganise other brands to support those six.
“The flagship six is essentially the strongest entertainment pack you can get in the market,” new chief executive Bob Bakish said in a call to analysts.
“Viacom is focused on improving its programming, but that takes time,’’ he said. “More immediately, it is making changes to improve affiliate relations, such as licensing only older content to Netflix Inc and other streaming services that compete with its cable and satellite TV affiliates.’’
“Ultimately, we don’t believe that those (streaming) players are a positive catalyst in terms of the evolution of the pay TV ecosystem,” Bakish said in an interview.
Via com, which has long promoted its own data capabilities, is also looking to give its affiliates access to some information it uses to help advertisers better target viewers, according to Bakish.
The company expects US affiliate revenue to rise by a low- to mid-singledigit percentage rate this year.
“Viacom is also reviewing its noncore assets,’’ Bakish said, declining to elaborate.
The new brand focus is the first major move by Bakish. The former head of Viacom’s international business took over as permanent CEO in December after the Redstone family stopped exploring a merger of the company and CBS.
Sumner Redstone and his family own controlling stakes in Viacom and CBS through privately held movie theater company, National Amusements Inc.
Bakish’s plans come after a year of distractions for the company as the Redstones battled to maintain control, resulting in the departure of former CEO Philippe Dauman.
The company said it would begin co-branding releases. For example, Nickelodeon and Paramount will make four films together.
Next year, Viacom will rename its Spike network “The Paramount Network,” which will consist mainly of scripted content. Meanwhile, MTV will focus more on unscripted shows, music and live events.
In the first quarter ended Dec 31, net income attributable to Viacom fell to $396 million, or $1 per share, from $449 million, or $1.13 per share, a year earlier.
Excluding special items, the company earned $1.04 per share, beating the analysts’ average estimate of 84 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 5.4% to $3.32 billion. Analysts had expected $3.18 billion.