Viacom CEO: Crowded Summer Tentpole Schedule Hurting Film Profits
Viacom is seeing a ratings and creative rebound, CEO Philippe Dauman and chairman Sumner Redstone said Friday, but Dauman also signaled that the crowded field of summer tentpoles is affecting the box-office performance of movies, including from his company.
And faced with a question if Viacom could one day decide to go private amid an increased stock buyback program, Dauman said: "I'm not a long-term prognosticator that way, but here and now we believe our stock is a great value." He added that the company is also mostly focused on returning value to shareholders via the stock buyback.
Discussing the performance of summer tentpoles, Dauman cited the big number of such films from various studios and argued that this has hurt box office revenue for such titles. He said the total revenue for Viacom releases would be affected as would other studios'.
"Paramount Pictures launched two strong tentpoles in Star Trek Into Darkness and World War Z, which are on their way to nearly a billion dollars combined at the worldwide box office," he said. "The next quarter will show significant profitability for Paramount, including from these two films, but it will likely be moderately less than we anticipated due to the crowded tentpole schedule this summer and the delay of certain film licensing deals into next fiscal year."
He later added: "This summer had a particularly high volume of tentpole pictures from all the studios combined." Viacom hopes to drive tentpoles' success for a longer period of time, but the crowded release schedule "limited a lot of pictures, ours included," he added.
The key theme of the call was Viacom's creative strength though. "The winds of change are all around us," but "the value of content…has never, never been greater," Redstone said at the start of the entertainment company's quarterly earnings call. He added that Viacom's content is in demand everywhere amid what he called a "creative resurgence at Viacom."
Dauman also focused his remarks on the success of Viacom content, particularly TV programs boosting ratings at the likes of Nickelodeon, MTV, Comedy Central and other networks. "Nickelodeon is clearly on the way back," Dauman said, touting the kids network's "sustained investment in new programming," such as Sam and Kat. That boosted ratings in its core demographic 11 percent in the latest quarter.
Dauman mentioned that the company has had success with moving pre-school programming from Nick Jr. to Nick. Dauman said he was "very optimistic" that this upward trajectory will continue.
Meanwhile, CMT is one of the five fastest-growing entertainment networks in cable with ratings for the most recent quarter up 29 percent, Dauman said.
And BET continues to do well, including with its first-ever three-day interactive music festival BET Experience. That will return next year, he said.
MTV also saw the successful return of hits such as Catfish and Teen Wolf, he added.
Asked about past Viacom complaints about the shortcomings of Nielsen ratings, Dauman said he had no visibility into what the media measurement company may do next to improve its data and when. But he said his team was comfortable with its own increased focus on developing hit content, with more in development.
Asked about the mix of original programming and acquired shows, Dauman said the company will continue to acquire attractive shows when it makes sense, but hopes to increase the overall percentage of originals.
He also touted the company's "very successful" upfront advertising market performance, highlighting "significant" volume increases in a "difficult market."
Adult upfront sales saw mid-single digit volume growth for Viacom, while kids volume was maintained, with Viacom's share increased in what was "an overall down market," Dauman said.
Continuing to discuss the ad market, he said international ad revenue should return to growth in the current quarter after recent weakness amid "softness in Europe."
Dauman on Friday also touted the outlook for Viacom's film unit, citing upcoming releases such as Transformers 4 and a new Jackass movie in the next fiscal year. Also coming then are films with new franchise possibilities, such as Jack Ryan and Teenage Mutant Ninja Turtles, he said.
At the beginning of Friday's earnings call, Redstone also lauded the "truly extraordinary" executive team of Viacom and once again called Dauman
an "outstanding leader," "my friend" and "the wisest man I have ever known."