Why Viacom Is Betting on SlimeFest, Clusterfest and Other Live Events
The company is expanding new revenue streams, with Comedy Central boss Kent Alterman saying live experiences for consumers help "solidify brand affinity."
Summer is the time for open-air theater, outdoor concerts, and … SlimeFest?!
The Nickelodeon event, which started in international markets in 2012 as a showcase for music acts, stars from the network and the channel's signature green slime, is making its U.S. debut in June, adding to a busy month of live events for Viacom that also includes Comedy Central’s second annual Clusterfest in San Francisco (June 1-3), VidCon in Anaheim (June 20-23) and the BET Experience in L.A. (June 21-23).
“We are ahead of our first-year projections," says Cyma Zarghami, president of Nickelodeon Group, about SlimeFest, which takes place in Chicago on June 9 and June 10 with musical performances from the likes of Liam Payne and Flo Rida. "Tickets are a near sell-out for the whole weekend, and sponsorships are completely sold,”
Viacom is looking to such events, some of them U.S. versions of international staples, to bring new revenue to the company as it looks beyond the subscriber, ratings and advertising challenges of its traditional TV networks business.
Bob Bakish mandated an expansion of live events, which include fan festivals, award shows and such shows as the touring Paw Patrol Live and SpongeBob SquarePants: The Broadway Musical, which is up for 12 Tony Awards, as part of a push for growth in ancillary businesses, which also include recreation and consumer products, when he became Viacom’s permanent CEO in late 2016.
The new live events have added to such Viacom big-event U.S. mainstays as the MTV VMAs and Nick’s Kids’ Choice Awards and such popular international events as Isle of MTV, Nickelodeon's Slime Cup in Singapore and Day of Play Brazil, as well as Comedy Central's FriendsFest in the U.K. and Spain. And in February, Viacom acquired YouTuber convention and festival VidCon, whose first edition under Viacom ownership also takes place this month.
The events bring in revenue from such sources as licensing deals, ticket sales, sponsorships and merchandising. There are already early signs that the strategy is bearing fruit. The company’s total number of live events grew 102 percent in its latest fiscal year ended Sept. 30, with attendance going up 54 percent to about 2 million.
Viacom's ancillary revenue reached $280 million last fiscal year, with management targeting $350 million this year and $500 million-$600 million by 2020. That may only account for 2 percent of Viacom’s $13.3 billion in revenue last year, but it’s a notable growth segment.
Analysts have taken note, with UBS’s John Hodulik after the latest earnings report lauding Viacom’s “accelerating revenues from nontraditional businesses.”
“Not only do these businesses reinforce the brands from a consumer standpoint and create new revenue opportunities, but they also give us unique offerings to advertisers and distribution partners,” Bakish emphasized on Viacom’s most recent earnings call, highlighting that in the first calendar quarter, global events attendance doubled over the same quarter of 2017. “This is an exciting area, and we expect revenue in live events and recreation to nearly double” in the current fiscal year.
But Wall Street still focuses more on the ratings and cord-cutting pressures on Viacom’s traditional networks business. “Management remains focused on key initiatives as they work to dig out of a decade of poor operating performance,” said Guggenheim Securities analyst Michael Morris in a recent note. “While we see meaningful potential, we remain cautious given secular headwinds for ad-supported linear TV.”
Nickelodeon found that research supports the push into in-person experiences. "The majority, 66 percent, of today’s parents say their kids are their best friends and that spending time together and sharing entertainment experiences is a top priority," says Zarghami, highlighting that she wants to make SlimeFest the brand’s signature U.S. event. "Live experiences are a great avenue for feeding that need and helping to bring kids and their families closer together and closer to Nickelodeon."
Quality control of the brand in live experiences is key, she also emphasizes. "Hiring outside vendors and partnering with experts like Live Nation for Slimefest is, for example, important for scale and credibility in a new space," she says. "But we also created a new division at Nick to ensure that the translation of our brand is always done thoughtfully and in a high-quality way. The Nick Experience is our internal team who oversees our moves into live and real-world experiences, and their job is to ensure brand consistency and to make sure everything we do is playful and quality and fun."
BET is another Viacom network that has developed know-how with live events in the U.S. "The BET Experience was created to amplify the BET Awards and deepen the connection between our viewers and the content they love," says Scott Mills, president of BET Networks, ahead of the latest edition of the L.A. mainstay. "Now in its sixth year, the festival has grown in popularity and numbers, with 165,000 people attending each year for the last two years, and has galvanized consumers with the brand in organic ways, providing unbound access to talent, performances and one-of-a-kind activations."
Comedy Central is another Viacom network that has been expanding its live events business. Its second Clusterfest, which will feature Jon Stewart, Amy Schumer, Trevor Noah and the Wu-Tang Clan, among others, kicks off Friday. Among the popular experiental features that will make a comeback is a re-creation of the bar from It’s Always Sunny in Philadelphia.
"Bob made it one of the strategic imperatives that we get more involved in live events and find ways to connect directly with our fans in the real world and bring our brands to live," Comedy Central president Kent Alterman tells THR. "We have increasingly become more savvy digitally. But the ability to connect directly with fans in an immersive experience that they associate with us and our talent is a great thing and helps solidify brand affinity."
Importantly, feedback from last year's debut outing showed that "the experience was universally applauded" by fans and industry folks alike, Alterman emphasizes. "We just felt this ripple of feedback from talent and reps for months, including people who weren’t there."
In year two, he says Comedy Central had an easier planning process for Clusterfest thanks to the success of the first outing. "In year one, you are really asking talent to take a leap of faith with you," he explains. "It's much more of a known thing now, so the booking is easier." And ticket sales have been outpacing trends in the launch year.
With that in mind, Comedy Central plans to develop its live events business further over time. "We look at this as our starting point," says Alterman. "We see opportunity to keep expanding and do more."