Viacom CEO: "There Is Never Enough Good Original Content"
At an industry conference, Philippe Dauman discussed FX chief John Landgraf's suggestion that there is too much TV and the role of the BBC.
Viacom CEO Philippe Dauman on Wednesday touted his company's increased spending on original programming, the continued value of the pay TV bundle and his team's success in Britain.
During a keynote appearance at a TV industry convention in Cambridge, England, about a year after Viacom acquired Britain's Channel 5, he said the broadcaster would increase by a double-digit percentage its content spending budget in the 2015/2016 fiscal year, while emphasizing that the number "far exceeded" its news commitment.
Asked about FX Networks CEO John Landgraf's recent suggestion that there was too much TV, Dauman said "there is never enough good original content," saying cultural hits are "a very special thing to accomplish," even though there are more originals. "You have to try a lot of new things," he said. The CEO also emphasized that Viacom likes originals for being "brand-defining" and said "there are always new uses for great content" thanks to new technology and new international markets. Concluded Dauman: There is not too much TV, but companies have to be "smart [about] where to allocate money."
He said he would rather spend money on eight different shows and do a few episodes each and then focus on the one hit and end the others, rather than spending all money on one huge new show.
The Viacom CEO said the company has never spent more on content than now, including its U.K. programming. When he took over as CEO in 2006, the company's annual programming spending was less than $2 billion, compared with more than $4 billion now and growing, he said.
The conference, the biennial Royal Television Society (RTS) Convention in the university town near London, this year explores the topic of "Happy Valley or House of Cards? Television in 2020." Happy Valley is a BBC drama, while House of Cards was originally a BBC drama that Netflix adapted into its first original series.
Asked about changing viewer behavior in the digital age and growing online content usage, Dauman said that while others see these things as an immediate threat, Viacom sees them "as a powerful, long-term opportunity," adding that the future is "far more promising than perilous" even though "transitions can be difficult."
Discussing the state of the pay TV bundle, Dauman said that if pay TV firms offer a rich bundle at a fair price with a lot of VOD capability, it is still "a tremendous" value. While more people are nowadays buying "skinny bundles," he said disaggregating the bundle "would make it more expensive."
Dauman also said that skinny bundles can get people into pay TV, with the potential to later upgrade them. "We really don't care how our content is distributed as long as there is sufficient monetization," he said.
Asked about his company's stock price decline amid recent cord-cutting concerns, Dauman said investors have assumed that the company won't adapt as it has done in the past, adding that the stock market doesn't always see how companies will end up doing longer-term amid a short-term focus. Does it frustrate him? "It frustrates me," he replied.
Comparing the U.S. and U.K. markets, Dauman said that revenue models are challenged in the U.S., but will also come "under increasing pressure here" in Britain as the digital revolution continues to change viewer behavior.
Viacom last year made headlines in Britain by acquiring Channel 5 for $725 million. The deal marked the company's largest since 2006's CBS Corp. split and the first time a U.S. company agreed to buy a British free-to-air TV provider. Dauman, at the time, said his team would use the channel's momentum and elevate it further.
On Wednesday, he pointed out the special relationship between the U.S. and U.K., saying that "Viacom has certainly been a beneficiary" since it launched in Britain in 1987 when MTV first set up shop here. He said the company employs about 1,000 people in the U.K., or 10 percent of its global employee base.
"We're particularly pleased that it has actually worked out so well," Dauman said about the Channel 5 deal. "And we see a lot of room for growth here in the U.K."
In his opening remarks, he also said: "A year into Viacom’s expanded presence in the U.K., I am happy to report that there has been relatively little in the way of intrigue or drama. The BBC has really taken the spotlight in that regard."
He also said: "Including Channel 5, Viacom is today the third-largest commercial broadcaster in terms of ratings, with a balanced portfolio of free-to-air and pay TV programming that appeals to all British audiences — whatever their age, gender or background."
Is public broadcast giant BBC a help or hindrance in Britain? "We have a lot of respect for the BBC," Dauman said. "They produce great programming and have a very important function in the U.K. and around the world." He said he only has an issue with it when it launches new ventures in areas where commercial companies have invested a lot. The Viacom CEO said it should be scrutinized in those instances.
Other speakers set for the RTS event, which runs through Friday, are Discovery Communications CEO David Zaslav, AMC Networks CEO Josh Sapan, Michael Edelstein, president of NBCUniversal International Studios, Wayne Garvie, chief creative officer at Sony Pictures Television, BBC director general Tony Hall, ITV CEO Adam Crozier and ITV Studios managing director Kevin Lygo, among others.
Among the panels will be one entitled "Working for the Yankee Dollar? Consolidation and Creativity." It will feature Garvie, Endemol Shine Group president Tim Hincks and others.