Viacom CEO Says Originals, Positioning Will Boost VH1, Spike TV

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Philippe Dauman also predicts over $200 million in annual revenue from online distributors and signals that Paramount will be in good shape even without distribution deals with the likes of DreamWorks Animation.

NEW YORK - Viacom president and CEO Philippe Dauman on Monday predicted that branding tweaks and a slew of upcoming original programming will help elevate his company's VH1 and Spike TV cable networks.

Speaking at the Deutsche Bank Media & Telecom Conference in Palm Beach, Fla. in a session that was available via Webcast, he was also asked about online distribution opportunities for Viacom cable networks. Dauman replied that there is "a lot more that we can do with [Netflix] and others."

He also shared with conference attendees that incremental annual revenue from deals so far this calendar year and upcoming deals will amount to more than $200 million - at margins that exceed 75 percent. That revenue should grow over time, he said. Dauman emphasized that such deals add incremental benefits, because they can happen without jeopardizing the traditional affiliate fee revenue from pay TV operators.

Dauman also touted the outlook for his company's networks in the upfront advertising market and said he expects that his team will recommend a dividend increase to Viacom's board starting with the July dividend.

Talking about Viacom's channels, Dauman cited the broad strength of MTV, BET, Nickelodeon and other core networks. Asked about Spike TV and VH1, whose ratings have been weaker, he said he was optimistic that both would soon see improvements thanks to a focus on their positioning and new original fare, which helps sharpen the brand and also has longer-term finanial benefits in after-markets, including in the digital space.

VH1, which is focusing on the 18-34 demo, with the late 20s being the sweet spot, is going after "the adultsters, not the youngsters," Dauman said, saying they are people looking to find their way in the world. While the focus is primarily on women, men are also part of the target audience as the network rolls out programming in the next few months, he said.

Meanwhile, Spike has done well with UFC at its core, but it has had a smaller percentage of original content than other Viacom networks, Dauman emphasized. It has been a guys-centric brand, but is now evolving to be "a brand for men, not just guys," he explained, citing the second season of Auction Hunters and such new shows as Repo Games and Coal as moves that will allow Spike to wean itself off the drug of third party programming, as Dauman put it.

Asked about advertising trends as the cable upfront ad season is in its early stages, Dauman said Viacom's cable networks continue to see double-digit ad growth in the current quarter.

Given strong brands and  shows, it is a "story, which tells itself" in many cases, according to Dauman. Citing strong pricing in the scatter market, he predicted a "very strong" upfront for the Viacom networks. Asked if he foresees double digit upfront pricing growth like Leslie Moonves, CEO of sibling firm CBS Corp., who had spoken at the company earlier in the day, Dauman said: "I think that will be the playing field."

Dauman once again also touted the creative renaissance of Paramount Pictures. Turning around a "battleship" takes a long time, he said in promising that Paramount's financials will see continued benefits amid a recent franchise film focus and a reduced film slate.

Dauman didn't share specific thoughts on the future of a distribution deal with DreamWorks Animation that runs through the end of 2012 and what its possible end would mean for Paramount. But he said that with a solid film release strategy and lineup, the company is "in a good position no matter what" happens to distribution relationships such as the one with DWA.

Dauman on Monday also said that he recently had talks about launching a possible film library cable channel in an unidentified foreign country  where there is 80 percent unaided brand recognition for Paramount.