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Viacom, Discovery Post Rich Ad Sales Gains

Booming marketplace gives channels like MTV, Discovery a lift
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Media earnings season kicked off this week with a double-barreled blast, as Viacom and Discovery Communications both reported sizeable gains in ad sales revenue.

Viacom’s cable television networks unit, which includes MTV, Nickelodeon, Comedy Central, and BET continues to soar, as FY Q2 domestic ad sales grew 11 percent versus the year-ago period.

Affiliate revenue in the U.S. improved 9 percent versus FY Q2 2010. According to Viacom CFO Tom Dooley, 80 percent of those sub fee gains can be chalked up to ratings increases.

International ad sales dollars were up 12 percent to $1.08 billion. Consolidated revenue grew 11 percent to $2.1 billion.

Thanks in large part to the phenomenon that is Jersey Shore, MTV led all nets in the quarter, posting its strongest ratings in five years. According to Nielsen, MTV averaged 1.46 million viewers in prime in the first three months of 2011, up 57 percent year-over-year. The network won the 18-34 demo outright, beating all comers with an average nightly delivery of 750,000 viewers.

(Speaking of the GTL crowd: Viacom president and CEO Philippe Dauman noted to investors that Jersey Shore will begin shooting season four next month in Florence, Italy.)

Other big gainers at MTVN were Comedy Central, which was up 14 percent in the 18-49 demo, drawing 654,000; BET, up 23 percent to 482,000; and TV Land, which improved 30 percent with its target audience (adults 25-54).

Nickelodeon won the quarter in total-day, averaging 2.36 million total viewers while sweeping all the kiddie demos.

While the huge deliveries at MTV are nothing short of remarkable, two major Viacom networks continue to struggle. Spike TV saw its nightly 18-34 deliveries drop 23 percent, while VH1 lost 22 percent of its 18-49 audience, with an average prime time draw of 320,000.

Dooley noted that the scatter market remains strong, as spots are commanding double-digit premiums versus the 2010-11 upfront rates. Movie studio spending as well as other categories (automotive, insurance, candy) are particularly strong in the current quarter.

Down in Silver Spring, Discovery notched a 9 percent increase in Q1 2011 ad revenue, on sales of $290 million. (Excluding Discovery Health, which was bumped at the beginning of the year by newcomer OWN: The Oprah Winfrey Network, stateside ad revenue climbed 15 percent.)

Affiliate revenue was up 6 percent to $274 million.

Minus a one-time bookkeeping gain related to OWN, Discovery’s earnings rose 20 percent to $305 million.

Discovery’s overall U.S. Networks revenue was up 8 percent from a year ago, to $587 million.