Viacom International's Robert Bakish on the New Paramount Channel (Q&A)
Viacom International Media Networks CEO Robert Bakish was in Spain to unveil the company's newest brand, Paramount Channel, ahead of its world premiere this week. The Hollywood Reporter's Spain Correspondent Pamela Rolfe sat down with him to discuss international trends, audience demographics and future brands.
THR: Why Spain as the first country worldwide for the new Paramount Channel?
BAKISH: It was a combination of things that led us to Spain first. One was a positive experience in the market despite some obvious concerns about the current state of the economy. Second was some research showing a really significant appetite of the Spanish consumer for film product. The third thing is we have a great team here in Spain and that's from both the creative and the business side of things. And the last thing, and really the tipping point, was I had dinner with the CEO of Vocento last January and he said they were probably going to move away from one of their services and there was therefore some bandwidth available and would we be interested in that. And I said we'd be interested in having that conversation. And because we had our existing relationship with MTV, we could get the deal done very quickly because it's basically the same kind of deal. After that, we were on a path to Spain.
THR: U.S. Ratings at Nickelodeon, MTV and some other networks have been under pressure lately. How key is the international business to make up for that?
BAKISH: I don't think it's about making up for that. If you listen to our CEO Philippe Dauman, he is a huge international advocate and believes, as I do, that there are substantial opportunities in the international markets for a world-class content company like Viacom and has set a tone to make sure we exploit those opportunities, including not only maximizing the performance of our existing brands--MTV, Nickelodeon and Comedy Central-- but looking to grow our exposure to the adult demographics. Comedy Central was our first lead horse in that race and now very quickly, we're going to look to Paramount as a second service in that.
THR: But when you talk "glocal" are there different trends that come into play or is there an international trend?
BAKISH: You have to have a broad international strategy, but you have to execute it on a country-by-country basis. The reason we've gravitated towards the glocal framework is it allows us to leverage global brands and global content libraries, but then supplement them and optimize them for local markets, not just with local language, but with local content. Each market varies. It might be a local version of one of our global shows, like a local version of Jersey Shore on MTV is Geordie Shore in the UK, the highest rated show in UK history and we have derivative product coming in a number of countries related to that. It might be a local acquisition. So in the case of Paramount Channel Spain, we're acquiring a whole set of Spanish feature films. It comes in many forms, but we've found that that is what helps the brand resonate on a local level.
THR: So is it possible that we'll see more products being created and generated abroad and traveling to the U.S.?
BAKISH: It's already happening. If you look at Nickelodeon, there's a show called House of Anubis, it's a serialized drama. We created it in the Netherlands some years back, we then created a German version and that last year, Nick U.S. signed on to do an English-language version for the globe shot with some U.S. talent in Liverpool.
THR: How much revenue comes from international in the Viacom business?
BAKISH: Viacom is TV and film, domestic and international. The film side is roughly 50-50. If you look at the TV side, international is still certainly a minority of the revenue. But as we built out--not necessarily more countries--but by adding additional brands whether it's Nick or Nick Jr. or Comedy or now Paramount. Adding these brands will allow us to grow our business at a significant rate and become a more significant contributor to Viacom. In the last five years, we've already become a contributor and now we're on a path to become a bigger contributor.
THR: Why opt for free-to-air on TDT rather than premium?
BAKISH: Viacom International we have a long-standing heritage of pay. And we continue to be very happy with the pay markets, including in Spain where Nickelodeon is the No. 1 pay channel. We are also in some free in Spain because we saw some opportunity. But it's not like we're ended in pay in Spain and I believe that the DTT Paramount Channel being free in Spain will end up being somewhat unusual. In general, we are very focused on the pay-TV business and have partnerships with all the leading pay-platforms in the world. And we will continue to grow that business and very much plan to use Paramount Channel to do that too. So the Spanish situation is a little unusual in that regard.
THR: Is this channel a way to drive further financial upside from the studio at a time when the DVD business has been sluggish?
BAKISH: I don't think it's a response to DVD. I know it's not. Certainly part of the appeal of partnering with us for Paramount is an economic benefit. The reality is this channel provides an opportunity to exhibit some Paramount product that might not otherwise get exhibited in Spain. That in turn provides some financial benefit to Paramount. This is a great Viacom play. You're able to leverage content that you have a Paramount with existing infrastructure at Viacom International. We're not opening up offices to do this. This is a way to create value for something we've already paid for.
THR: What are Viacom International's biggest opportunities and how does the channel fit into that?
BAKISH: If you look at our overall strategy, we've been a leader with kids with Nickelodeon for a long time and with young adults even longer with MTV. The name on the door used to be MTV, then MTV International. Now it's Viacom International Media Networks as a tangible representation that there are additional brands to develop. As I look at our growth prospects, there's certainly more growth in Nickelodeon. We have great product coming and are very excited about Turtles for our consumer products business. With MTV we're seeing great traction unlocking additional revenue our mobile brand license. This week we're launching three significant products: Paramount Channel in Spain, Paramount Comedy in Russia and our sixth mobile brand license which is our mobile MTV service in Poland. But ultimately, growth comes from building the third leg in the adult demographics. That's why we believe in pushing comedy lately. Comedy is now a significant business for us. And that's why we're so excited about Paramount because the reality is we have a very small share of that demographic. As we look to grow, penetrating that demographic is a big opportunity.
THR: So in addition to more Paramount Channels in other countries, we may see more brands, more channels.
THR: How many more international Paramount channels could we see this in the next 3 years and where?
BAKISH: We're well into double digits. We're looking at other markets. There's great interest. I'm very happy with where we are today with advertiser interest in Spain. We're at a better place than I thought we'd be. I've had talks --as my team has had talks--with advertisers around the world and there is broad interest. Unlike a channel where we have to say, "where are we going to get the product from" --the beauty of this is we have the cornerstone of the channel. In the last three months, we created the look and feel. Now going to additional markets is negotiating distribution, fees, etc. You have decide how you're going to supplement the product locally, but it's something we can replicate pretty quickly which is why we're so excited about it. This is not a one-off play. This is a scale play and if you're going to drive a business, you need scale plays.