Viacom CEO Bullish on SpongeBob, Nickelodeon

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Philippe Dauman predicts the company will return to ad growth next quarter as he mentions an upcoming Nick app and discusses plans to continue ratings improvements at his firm's networks.

Viacom CEO Philippe Dauman said on Thursday that the company continues to believe in the drawing power of SpongeBob SquarePants and Nickelodeon despite the kids network's recent ratings woes.

"He is one of the great, enduring characters," he said about SpongeBob on the entertainment conglomerate's quarterly earnings conference call when asked if it might be losing its appeal. "SpongeBob is great for us not just on the air" for ratings and as a vehicle to help launch other shows, but also for consumer products, he added. Dauman in that context also reiterated that the company's film studio continues to work on a SpongeBob feature film for the end of next year.

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In that context, he also reiterated that Paramount is looking to use that feature to kick off its plans to release one animated film per year with consumer products tied to it. While Dauman wasn't ready to announce the next animated film project on Thursday, he said it would be unveiled soon, be based on an original idea and be in line with the studio's animation budget targets of below $100 million. Paramount launched its animation effort ahead of the end of its distribution deal with DreamWorks Animation and had success with Rango in 2011.

Viacom is currently working on accelerating its TV ratings momentum as all of its cable channel brands except for the Nickelodeon group returned to advertising revenue growth in the final quarter of 2012, he also told the call. Dauman said that U.S. ad revenue fell 6 percent in the period, but would have grown if Nickelodeon was excluded.

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Nickelodeon continued its resurgence in the December quarter, bringing in three months of sequential ratings improvement, he also highlighted. The "rapidly improving Nickelodeon" will help to "significantly" improve Viacom's results, Dauman said.

Asked about current ad trends, he said that "demand is good right now," and the current quarter will be "very close" to flat, with ad growth to return after that. While "European conditions remain weak," trends overseas have become more stable. This means that international ad momentum should return to growth this quarter, Dauman said, highlighting that the Comedy Central channels saw ratings rise 14 percent internationally in the latest quarter.

Dauman cited a greater emphasis on events, such as specials, stunts and new episodes of hit shows, as one driver of recent success. He also said that Nickelodeon is looking to refine its programming filter for the post-millennial generation and launch a new live afternoon block in about a month.

And he said that Nickelodeon -- given that its target audience tends to watch a lot of content on digital platforms -- will in the near future launch an authenticated app that he described as very innovative, without providing further details. Signaling that it will include streaming video for current pay TV subscribers, he said it “will allow us to grow in the future and will be different from anything you’ve seen."

Meanwhile, MTV is focusing on building out more nights as ratings and ad revenue drivers after Jersey Shore overemphasized one night on the schedule, according to Dauman. He cited the Monday night relationship block of Teen Mom and Catfish and Tuesday's block that includes such female-targeted shows as Snooki & JWoww and Awkward.

He said the network has several other shows in development that touch on the new ways millennials navigate relationships in an effort to double-down on themes featured in Monday's hit shows.

Dauman also said that MTV has seen success with attempts to "eventize" weekends with such offers as Jackass marathons.

Addressing the need for new cross-platform measurement data, the Viacom CEO said that this continues to be a focus internally and with partners. New measurement systems "will be a particular boost for us" given that the firm's young-skewing audiences tend to watch more content on digital platforms, Dauman said.

Also on the call, executive chairman and controlling shareholder Sumner Redstone said: "The media business is evolving at an accelerating rate," and Viacom is adapting to the digital age and "leading the way" by looking to distribute content "in innovative ways."

As he typically does on earnings calls, Redstone concluded with comments lauding Dauman. "I have unwavering confidence in my good friend Philippe, the wisest man I have ever met in my life," he said.


Twitter: @georgszalai