Viacom Betters Ad Sales 'Situation'

Viacom’s got a Situation on its hands, as the media conglomerate’s domestic advertising sales rose 8 percent in the third quarter, beating analysts’ expectations.Thanks in large part to the success of MTV’s mega hit Jersey Shore, which accounted for nine of the 20 most-watched programs on ad-supported cable among viewers 18-49, Viacom enjoyed a significant lift in ad sales dollars and affiliate fees. Worldwide, advertising revenues at the media networks unit grew 7 percent versus Q3 2009, adding up to $1.17 billion. Affiliate fees were up 10 percent on the quarter, to $799 million.All told, the networks group posted an 8 percent improvement in total revenue, taking in $2.13 billion in the three-month period that ended Sept. 30.Viacom president and CEO Philippe Dauman said he expects the scatter market will continue to churn along, leading to ongoing growth in the ad market. “From our vantage point the economy is improving,” Dauman said. “This gives me confidence for another quarter of improvement in ad sales.”Scatter dollars in the current quarter are coming in at premiums of 25 percent over upfront rates.MTV in Q3 boasted 14 of the top 20 programs among viewers 18-34, a roster that includes its Sept. 12 telecast of the 2010 Video Music Awards, nine episodes of Jersey Shore and one installment each of Teen Mom and the new series The World of Jenks. The VMAs beat all comers, averaging 5.81 million members of the demo, per Nielsen. Of the 12.1 million viewers who tuned in for the awards gala, 66 percent, or 7.9 million, were adults 18-49. The second season of Jersey Shore was the No. 1 delivery vehicle for the core TV demo, drawing an average 4.55 million viewers 18-49 in Q3, per live-plus-seven-day data. With a week’s worth of time-shifting factored in, the antics of Snooki, JWoww and DJ Pauly D scared up an extra 1.51 million members of the demo each week, a boost of 49 percent from the show’s live-plus-same-day numbers.On the whole, MTV put together a stellar quarter, growing its prime time deliveries 43 percent to 1.22 million viewers, while finishing the period tops among the 18-34 set. The network averaged 632,000 members of the younger demo, a boost of 53 percent versus the year-ago 413,000, and tied History for fifth place with an average nightly showing of 802,000 adults 18-49 (up 46 percent). Other MTVN properties that showed significant growth were: Comedy Central, up 15 percent in total viewers (1.05 million) and up 25 percent among 18-49s (677,000) and TV Land, which grew 49 percent to 906,000 viewers. Meanwhile, Nickelodeon once again closed out the period tops among all basic-cable nets in total-day deliveries, beating also-ran Disney Channel by a margin of 311,000 viewers. Nick also won the 2-11 foot race, averaging 1.23 million in total-day.Viacom’s total revenue rose 5 percent to $3.33 billion, topping Wall Street expectations of $3.30 billion. The corporation did take a $299 million hit on its console gaming unit, Harmonix, developer of the Rock Band franchise. Flagging sales and a questionable fit within Viacom’s core TV and film assets has led to talks with potential buyers. “Our decision to exit this business strategy is to focus on what we do best, and that’s creating world class entertainment,” Dauman told investors. “The console games business requires expertise we just don’t have.”Dauman also told investors that the pay-TV service, Epix, should reach profitability some time before the end of the year. In August, Epix hashed out a $1 billion deal with Netflix, giving the movie-rental/streaming service exclusive online rights to the Paramount Pictures library. “This new segment of the pay window provides a new option for consumers,” said Dauman of the Epix-Netflix arrangement. “It’s an incremental opportunity for us to monetize our content, and it attests to Netflix’ ability to innovate. We expect to add digital dollars, not dimes, in our interactive future.”When asked if he thought that this sort of digital streaming would lead to an uptick in cord-cutting, Dauman said that services like Netflix are complementary to linear TV and would not cannibalize traditional cable viewing.“TV viewership held up, even in the recession,” Dauman said. “We have seen incremental distribution from the telcos...[and] we don’t see cord-cutting happening. It’s much ado about very little.” Epix is a joint venture of Viacom's Paramount studio, Metro-Goldwyn-Mayer and Lions Gate Entertainment.

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Viacom Betters Ad Sales 'Situation'

Anthony Crupi

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Anthony Crupi