Viacom Narrows its Cable Focus as Profit Declines

Feb 12, 2017, 00:52
Viacom Narrows its Cable Focus as Profit Declines

The owner of Nickelodeon, MTV, Comedy Central and Paramount Pictures posted revenue of $3.32 billion in the period, which also beat Street forecasts. The company's top line growth was driven by an increase in affiliate revenue and strength in the company's worldwide operations in Media Networks, along with a stronger film slate at Paramount studio.

Now, years after young men began wandering away to other media, Viacom is giving up on the men's network. Earnings, adjusted for one-time gains and costs, came to $1.04 per share. This improvement in free cash flow was principally due to lower working capital utilization, reflecting the timing of film and programming spend. Viacom has Paramount-branded channels around the world, so the shift for Spike TV is in keeping with Bakish's vow to bring a more globally cohesive strategy to a company that has previously been run as film, TV and global fiefdoms.

"A big part of our future is better integrating Paramount into the company and connecting it more to the work we do across media brands", Viacom CEO Robert Bakish told employees last month.

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Outlined in today's first quarter 2017 earnings report, the new strategy will focus on significant and increased resource investment for BET, Comedy Central, MTV, Nickelodeon, Nick Jr. and Paramount.

Revenue gains were attributed to a return to growth in domestic affiliate fees as well as continuing worldwide strength and ancillary revenues. Among films, theatrical revenues rose 104% and ancillary revenues rose 86%. Viacom plans for that cable channel to become its "premier general entertainment brand", utilizing both original and third-party programming. In fact, Paramount Pictures collected $267 million at the USA box office during the December quarter.

Revenue from Viacom's film business, which includes theater and licensing, increased 24 percent to $758 million from a year earlier.