Viacom Plans to Boost Non-Nielsen-Based U.S. Ad Sales to 50 Percent

Dorothy Hong

"Everyone wants our channels," Philippe Dauman says about the appeal of the company's networks despite recent carriage disputes

Viacom is looking to "significantly" grow its U.S. advertising revenue that doesn't depend on Nielsen ratings and is confident about the appeal of its networks, CEO Philippe Dauman said on his company's earnings conference call Thursday.

He said the company was "quite confident as we have [carriage deal] renewals over the next many years...with distributors who want to maintain and grow their businesses." He called the company "the leading purveyor of networks in the television industry," and "everyone wants our channels."

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In a reference to recent carriage disputes, Dauman said small pay TV operators that have dropped Viacom networks have seen subscriber losses, "and this shrinkage is likely to continue." Cable operator Suddenlink this fall dropped the company's networks, and CableOne has done the same.

Asked about HBO's and CBS' decision to launch online-only video services, Dauman said his team would watch those companies, but the company was currently focused on ensuring distribution and solid distribution fees.

"We remain committed to creating more original content," Dauman told the call. Fiscal year 2015 content spending will amount to $3.8 billion, including British broadcaster Channel 5, which the company acquired in September, he said.

Dauman also said the company would be "aggressively moving" towards non-Nielsen-dependent monetization, while also continuing to work with Nielsen on new measurement techniques as improved measurement of its young-skewing demographics was a key focus area for the company. Over the next three years, Viacom plans to drive its percentage of non-Nielsen-dependent U.S. advertising to 50 percent, up from 30 percent currently, the CEO said.

Apps, mobile services, sponsorships, integrated marketing and dynamic ad insertion will help drive the non-Nielsen ad growth, he said.

"We are in a transitional moment" where measurement techniques don't fully measure viewership, Dauman said. "Technology will be our friend" after this one-to-three-year period ends, he said.

Dauman said the industry overall has seen ratings drops, which he said were in part driven by consumers' shifting to digital platforms.

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Discussing ratings weakness, Dauman said the company was spending on new content, including new versions of MTV's Catfish, series Scream, based on the horror film franchise, and five new coming Nickelodeon shows. He also touted original programming plans at Comedy Central and Spike. Said Dauman: "Spike is a brand with high upside."

A weak-sounding Sumner Redstone, executive chairman of Viacom, started the call with briefer than usual comments that once again lauded Dauman. After previously typically calling the CEO "the wisest man" he has known, Redstone on Thursday called him his "wise friend Philippe."

Profit growth at the film studio in the new fiscal year will be weighted to the back half of the fiscal year, management said. It lauded its upcoming film slate. MGM co-production Ben Hur will start production soon, COO Tom Dooley said. Sequels to Zoolander, Teenage Mutant Ninja Turtles, World War Z and Star Trek are also in development, he said.

Email: Georg.Szalai@THR.com
Twitter: @georgszalai


 

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