Big boys: TV biz is top priority
Chernin, Dauman see growth, especially overseasParts of their TV businesses provide opportunities for growth and improvements, executives from News Corp. and Viacom Inc. said Monday at the last two big investor conferences of the year.
News Corp. president and chief operating officer Peter Chernin told the annual UBS Global Media & Communications Conference in Manhattan that "we are not satisfied" with what he called a "lousy fall" at the Fox network. "We haven't created any successful new shows," canceled three of five new shows and brought in no ratings gains, he said.
However, Chernin emphasized his company's "tremendous confidence" in the network's leadership, adding that Fox's relative positioning in the ratings hasn't really changed this fall.
Asked about News Corp.'s cable networks, he said there is room for international growth through organic gains and possible acquisitions, while in the U.S. growth will be organic.
"There are no great networks on the market" for sale in the U.S., and takeover prices have been high, Chernin said.
He also told investors his firm continues to work on getting distribution commitments for a Fox business news channel and hopes to announce its launch next year.
Crosstown, at the Credit Suisse Media and Telecom Week conference, Viacom Inc. president and CEO Philippe Dauman said Monday that he is targeting a 10%-15% profit-margin improvement in his company's international cable networks business over the coming years, with the bulk to come next year.
"If we can't achieve it, I think some people will have an issue with me," he said in what attendees took as a reference to impatient investors like Sumner Redstone, chairman and controlling shareholder.
To optimize its international channel business, Viacom has recently struck licensing deals for its content in such markets as Indonesia and Thailand and has said it might do the same in territories where it now has minority stakes in networks but is seeing slow growth, the company has said.
Asked about the turnaround at the Paramount Pictures unit, Dauman said, "We are well on our way," adding that the studio will look at diversifying its revenue longer term. He didn't provide specifics but recently expressed interest in TV production.
Dauman also said he is bullish on such films as "Dreamgirls," "Norbert" and "Transformers," which he said could become a movie franchise for the studio if things go well.
Asked about other franchising opportunities, he signaled an interest in a third "Jackass" film. He also said Paramount is looking at reviving the "Star Trek" franchise with a movie likely to come out in 2008 or '09. Dauman didn't provide further details.
At UBS, Chernin said News Corp. will continue to look at optimizing its portfolio of assets over time, though it is happy with its mix of businesses.
For the next several years, double-digit percentage growth should be achievable through its current holdings, he said before adding: "We aggressively continue to look out (for the next growth asset) and think beyond 2010. We are religiously focused on growth."
Chernin also said while News Corp. is "not particularly anxious" to get out of any businesses, a swap of its controlling stake in satellite TV giant DirecTV Group to Liberty Media remains possible. "We remain optimistic about our ability to reach a deal," he said without wanting to commit to a time frame.
He said that a potential deal shouldn't suggest any problems at DirecTV but signaled that the buyback of Liberty's big stake in News Corp. might simply create more value for shareholders.
Chernin also signaled that no need is felt for more major acquisitions in the online and digital space, saying prices have been extremely high. "We did look at YouTube," but the asking price was too high given a lack of profits or major revenue, he said. "There's absolutely nothing cheap out there right now."
Also speaking at the UBS conference, MPAA chairman and CEO Dan Glickman was optimistic about the film industry, which he noted has rebounded from a down year in 2005.
He again encouraged studios to look at new technological developments to entice new consumers or lapsed moviegoers, pointing to digital film, 3-D and Imax. He also looked at the downloading of films through iTunes and BitTorrent, a file-sharing service that has recently made deals with Hollywood studios, as at-home technologies that could pique the interest of closet movie buffs. "There is an enormous amount of room to grow," he said.
Glickman predicted that there would be more experimentation with these new technologies in the next few years. He also saw the industry continuing to attempt other new approaches in the coming years, including shrinking the window between theater and DVD releases and film companies partnering with distributors like the recent deal between the Weinstein Co. and Blockbuster.
"There's a huge amount of experimentation going on," he said. "People don't want to be left behind."
Alex Woodson in New York contributed to this report.