“We’re Focused on a Return to Growth,” Bob Bakish Tells Deutsche Bank Conference

by Stuart Winchester, Viacom

Viacom President and CEO Bob Bakish sat with analyst Bryan Kraft at the Deutsche Bank Media, Telecom and Business Services Conference in Palm Beach, Florida last week. In an extended Q&A session, Bakish outlined Viacom’s wide-ranging growth initiatives, from sophisticated advanced advertising products, to the opportunities in mobile distribution, to the company’s strength outside of the United States.

“We spent 2017 really stabilizing the business, and now we’re focused on a return to growth,” Bakish said. “… We articulated a three-part plan associated with that, growing share and margins in our core business, accelerating our participation in next-generation platforms and solutions, and unlocking opportunities with synergies to the core that are outside of traditional media revenue streams.”

While Bakish looked firmly toward the future, he also summarized a few of Viacom’s many recent successes: MTV is in its 10th consecutive month of growth; BET’s ratings streak stands at three straight quarters; Paramount Network launched to both critical acclaim and ratings success in January; ratings at CMT, TV Land and VH1 continue to be strong.

Here are a few more highlights from Bakish’s conversation. You can listen to the full Q&A session here.

Viacom’s diverse demographics + diverse ad products = enormous opportunity

“… all our constituencies have embraced the flagship strategy and certainly that’s true in the ad community. We’re in a very enviable position in that we serve the full spectrum of demographics, really from preschoolers all the way up to, as I said, 25-54s. … But importantly, what you have to realize about our ad business is, yes, it’s partially ads or majority ads on linear television networks … but it’s also our advanced advertising business. And that’s around instilling data-driven approaches and alternate kind of orbits versus [potential] truck [purchasers] versus men 18 to 34 in a television-centric environment, and then all the way up through actual dynamic ad insertion, which is another element we’ve added as we’ve redone our MVPD deals this year [so that] we have access to insert at the consumer level.”

A cornerstone strategy drives growth internationally

“… [Viacom’s international cornerstone strategy] started with our creation of our joint venture in India, which we did in 2007, where we went on to launch a brand called Colors and sitting here today, it’s the number one. … We then went on to acquire Channel 5 in the UK about five years ago. That’s been a homerun and we acquired Telefe in Argentina, which is number one broadcaster in Argentina about a year ago and that’s been a homerun. So, you put that all together and you have a company that grew – our international division that grew, earnings, double digits ad revenue, double-digit affiliate revenue, double-digit ancillary revenue in the last quarter and earnings, let’s say very, very strong double digits in the last quarter and continues to be on a … strong track to additional growth.”

Mobile is global

“But the real game-changer is the mobile space. … in Latin America, where we’re bringing our brands to Telefónica’s mobile service, effectively our channels to that in a way that’s consistent with pay TV i.e. on an affiliate fee basis … Today I can tell you that we bought a new product to market. … Paramount+ is a combination of Paramount’s first-window movie product from pay TV with Viacom’s Network television product. That’s a product we brought to the set-top box space in Europe last year and we’ve just done a deal with Telenor in the Nordics, where we’re bringing that product to mobile, which is another example of the potential for these businesses’ IP and video assets to move to the mobile space. And remember, the mobile distribution is the most ubiquitous distribution on the planet by far.”

Paramount is becoming a TV production powerhouse

“… the part of Paramount that nobody really was paying attention to, but actually was doing well in ramping was the TV production side. … if you look at the hits people are talking about, 13 Reasons Why, that’s a Paramount production for Netflix … The Alienist for the Turner Networks, number one drama, in broadcast season to date for 2018. That’s a Paramount Network Television production. Upcoming, we have a fabulous Clancy Jack Ryan series that we’re doing for … Amazon, and so you really see and we have 14 projects overall. You really see the resurgence of Paramount as a major television producer. That business did about $400 million in revenue this year.”

Paramount Pictures is set up for a resurgence

“The new slate for 2019, which is really the first slate that new management has put together because there is a bit of pipeline you have to work through. We are – the good news is we’re virtually fully through that pipeline. We do have a Mission: Impossible film coming this summer that we are excited about. But the new slate for 2019, which again is half-branded films, which are very attractive, economic characteristics, lower-cost films, you can look at examples like Get Out as one – that was one of the films that really we looked at and we said, we got to do stuff like that, but we’re going to do it in this case with the BET brand, and so that’s one of the new Tyler Perry films that we’re excited about.”

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