Viacom’s Q3 2018 Earnings Demonstrate Turnaround, Evolution Into Global Multi-Platform Entertainment Company

by Stuart Winchester, Viacom

Viacom released its third quarter 2018 financial results today, articulating progress on its turnaround and detailing Viacom’s evolution beyond its linear roots and into a global multiplatform company.

“Viacom produced another quarter of strong progress, with clear evidence that our turnaround is delivering results and that our evolution into a truly global, multiplatform, brand- and IP-driven entertainment company is well underway,” said Viacom President and Chief Executive Officer Bob Bakish.

Viacom’s core media networks business continues to increase share, Paramount Pictures is surging and profitable, domestic affiliate revenues are up sequentially, and new initiatives are helping to build ad sales strength. Even as these traditional business drivers stabilize, Viacom continues to transform itself by feeding booming digital consumption, growing its Advanced Marketing Solutions (AMS) portfolio, increasing its number of live events, and establishing a burgeoning cross-portfolio studio model that opens significant opportunities for third-party production.

A RESURGENT BUSINESS

Over the past several quarters, Viacom has revitalized four core elements of its business – Paramount Pictures, media networks’ audience share, ad sales, and its domestic affiliate business – while continuing to strengthen its balance sheet and improve its credit rating.

“This improvement in operating performance – combined with meaningful actions over the past 18 months to de-lever our balance sheet – have resulted in a stronger credit profile to help support Viacom’s return to long-term sustainable growth,” said Bakish. “We remain focused on building this momentum with an even stronger September quarter as we continue to position Viacom for the future.”

Here’s a look at how Viacom’s core business elements demonstrated a resurgence in the latest quarter:

Paramount Pictures continues profitability on theatrical hits, television production strength

Paramount’s new management team kicked off their slate with a pair of hits: A Quiet Place brought in $188 million domestically (and another $144 million internationally), on a $20 million budget, while Book Club, acquired for $10 million, raked in $68 million. After growing operating income for six consecutive quarters, Paramount Pictures reached profitability over the past two, with domestic revenue surging 58 percent year-over-year (YOY) in Q3. This trend is expected to continue during the fourth quarter on the strength of the well-reviewed Mission: Impossible – Fallout, which has earned more than $330 million globally – a record open for the franchise – since its July 27 debut.

The studio’s Paramount Television production arm continued to show strong growth, and is aiming for $400 million in revenues for fiscal 2018 behind licensing income from acclaimed series such as the second season of Netflix’s 13 Reasons Why and The Alienist, which earned six Emmy nominations.

With deepened and expanded distribution deals, affiliate revenue is headed back toward growth

As Viacom has renewed or closed major affiliate renewals, the company has often broadened the agreements’ scope to include advanced advertising and co-production elements. Viacom has also captured new distribution, returning in full to Charter and Suddenlink and establishing carriage on vMVPD bundles, such as AT&T Watch. Domestic affiliate revenue has improved sequentially throughout fiscal 2018, and Viacom anticipates growth of one percent in the fourth quarter.

Viacom’s flagship media networks continue to grow audience share behind ratings strength

For the fifth consecutive quarter, Viacom’s flagship brands achieved YOY share growth as a unit. MTV is the fastest-growing network in primetime among the top 50 cable and broadcast channels in its target demo of adults 18 to 34, and the network has recorded YOY primetime ratings gains for four consecutive quarters. Combined, VH1 and MTV own nine of the quarter’s top 10 unscripted cable series. BET (up 23 percent in live-plus same day ratings among adults 18 to 49), and Comedy Central (recording its largest YOY primetime quarterly ratings gain since 2014), also delivered strong quarters.

Viacom’s move into premium content with the Paramount Network also showed momentum, with Western drama Yellowstone compiling an average of approximately 4.4 million live-plus-three-day viewers, good for the year’s most-watched scripted cable series after The Walking Dead.

Advertising Sales are gaining momentum behind Viacom’s Advanced Marketing Solutions portfolio

Strengthened brands and Viacom’s AMS portfolio – which includes branded content, advanced advertising technologies, and experiential offerings – helped drive the company’s best Upfront pricing in five years. AMS revenue grew 33 percent for the quarter, driving projections of a $300 million haul for the year and a return to growth for ad sales in fiscal 2019. Fox is also licensing Viacom’s ad-targeting Vantage product, an additional incremental revenue stream that validates AMS’ sophistication and value.  

EVOLVING INTO A MULTI-PLATFORM, GLOBAL, BRAND- AND IP-DRIVEN ENTERTAINMENT COMPANY

As Viacom transforms elements of its core business, the company has also been evolving to thrive in a digital and mobile landscape. Here’s a closer look at the three key initiatives – expanding the digital footprint, establishing a broader studio production business, and growing live events and adjacent businesses – that are driving the company’s evolution:

Digital consumption explodes under the Viacom Digital Studios umbrella

Behind the fast-growing Viacom Digital Studios, Viacom tripled its total digital streams since Q3 2016 to approximately 7 billion in this quarter, while recording YOY jumps in video views and watch time of 112 and 104 percent, respectively. The acquisition of Gen Z-focused digital video producer Awesomeness should further drive Viacom’s momentum in this space.

Viacom is building a cross-portfolio studio production operation that is aiming to be a $1 billion global, episodic content production business by 2020

From its launch in 2013, Paramount Television grew into a $400 million business, and Viacom is now expanding this studio production model across its portfolio. With deep vaults of intellectual property to feed the insatiable global demand for content, Viacom’s brands are ideally situated to feed this pipeline: Nickelodeon has already forged a deal to produce two seasons of Pinky Malinky for Netflix, while MTV Studios will leverage assets like The Real World, Daria, Made and others from its enormous and largely untapped youth-focused IP library. More deals are on the way, and other Viacom brands will soon launch their own studio models. Meanwhile, the newly formed Viacom International Studios is already producing Spanish- and Portuguese-language shows for Netflix, Amazon, Telemundo, Fox and others.

Live events attendance is becoming a substantial business driver

Demonstrating the power of its brands to transcend screens and translate across a variety of experiences, Viacom drew millions of fans to 65 branded live events – including Comedy Central Clusterfest, the BET Experience and Viacom’s first Vidcon – in the first three quarters of fiscal 2018. At the cross-section of live events and digital platforms, Bellator inked a nine-figure, multi-year distribution deal with global sports streaming service DAZN that will double Bellator’s revenue and make the organization profitable. Live events helped Viacom drive ancillary domestic revenues up 31 percent YOY during the quarter, to $93 million.

Viacom will wrap up its fourth quarter and full fiscal year in September. To see what Viacom will debut in the months ahead, scroll through the timeline below, or click here to view the full-screen version.




Paramount’s “Crown Jewel” Mission: Impossible – Fallout Rides Rave Reviews to Record Opening

by Stuart Winchester, Viacom

Like Ethan Hunt prevailing in a helicopter chase through a mountain obstacle course, Mission: Impossible – Fallout won the weekend box office with a franchise-record $61.5 million debut in the U.S. and Canada. An additional 36 international markets added $92 million, bringing the well-reviewed sixth installment of Paramount Pictures’ action institution to a $153.5 million worldwide total – also a record – in its opening weekend.

Featuring a dazzling array of HALO-jumping, motorcycle-crashing, bathroom-smashing stunts in a round-the-world freefall of unrelenting action, the sixth entry in the Mission: Impossible series drew raving critical reaction from its first premiere earlier this month. Fans of the series clearly noticed, chasing the action into theaters.

“The Mission: Impossible franchise is a crown jewel for Paramount Pictures,” box office analyst Paul Dergarabedian told Variety. “There is a long track record that shows that they can rely on Cruise and his creative partners to deliver time after time. As long as Cruise can keep delivering the goods, Mission: Impossible is an annuity that will keep paying dividends for both Cruise and Paramount for years to come.”

Viacom Gets All Kinds of Awesomeness

by Stuart Winchester, Viacom

AwesomenessTV Holdings, LLC (aka Awesomeness), a media company and leading digital-first destination for original programming, has established an unparalleled connection to GenZ – that coveted up-and-coming cohort born along with the tech revolution of the mid-1990s. Fed by strong relationships with top digital talent and influencers, Awesomeness has accumulated 6.4 million YouTube subscribers and another 158 million subscribers on its Awesomeness Network, becoming the premiere digital media network for the most digitally savvy cohort in history.

And now Viacom is acquiring Awesomeness, which will live under Viacom Digital Studios (VDS) and play an important role in Viacom’s robust and growing premium content production ecosystem, drive additional growth at VDS, and strengthen Viacom’s established digital and social relationships and dominance in youth culture.

“Awesomeness has done an incredible job building their brand into a digital media powerhouse for today’s most sought-after and hard-to-reach youth audiences,” said Kelly Day, President of Viacom Digital Studios and former Chief Business Officer of Awesomeness. “The team brings strong digital expertise, deep connections with top talent and influencers, and a robust branded content studio and creative agency that will accelerate the growth and scale of Viacom Digital Studios.”

Andie is on a mission to shake her stigma with the help of her three best friends in “Foursome,” which airs on YouTube Premium. Starring Jenn McAllister, Rickey Thompson and more.

Viacom is already a top player in youth culture, having curated strong audience connections with kids via Nickelodeon and young adults via MTV. The addition of Awesomeness’ young teen fan base further strengthens this broad demographic reach, while Awesomeness’ strong existing relationships with digital platforms, talent and influencers complements VDS’ existing efforts to reach these GenZ consumers on the mobile, social and digital platforms they call home.

While VDS has been growing briskly – more than tripling digital streams since 2016 and doubling YouTube subscribers over the past year, as total social views and watch time soared by 112 and 104 percent, respectively – Awesomeness’ dedicated sales force, branded content studio, and existing relationships with brands such as Hollister, Gatorade and Invisalign will further drive VDS’ growth and profitability. Awesomeness’ expertise across digital programming and distribution, production, talent management and audience development will also help fill out VDS’ still-growing staff.

With distribution deals with major SVOD players and its own Emmy-winning, youth-focused studios that have produced 200 hours of long-form television and feature film content, Awesomeness’ proven content development and production abilities are an especially good fit for Viacom, which has moved deliberately to ramp up its capabilities in this area recently: consolidating several operations across the Americas into Viacom International Studios to service global markets; moving to a studio model under which Nickelodeon, MTV and other brands will license and produce shows based on intellectual property for third-party platforms; and building Paramount Pictures’ Paramount Television production arm from scratch into a $400-million-and-growing annual business.

During an all-night, lock-in graduation party, a group of new grads will do whatever it takes to make their remaining high school dreams come true in “All Night,” which airs on Hulu. Starring Jenn McAllister, Eva Gutowski, Teala Dunn, Jake Short, Brec Bassinger and more.

Awesomeness alumni have already been helping to power Viacom’s transformation in this increasingly digital and mobile age: VDS President Kelly Day, VDS Executive Vice President of Talent and Development Paula Kaplan, and Paramount Players President Brian Robbins – who co-founded Awesomeness in 2012 with Joe Davola – each joined Viacom directly from Awesomeness, a testament to that entity’s penchant for producing top-grade talent.

Bakish: Today’s Viacom, Focused on Execution, Delivering Progress

by Stuart Winchester, Viacom

On Tuesday, Viacom President and CEO Bob Bakish sat down with Activision Blizzard Studios Co-President Stacey Sher for a panel moderated by Fortune’s Andrew Nusca at the Fortune Brainstorm Tech Conference in Aspen, Colorado. The topic was “the future of entertainment,” and Bakish delivered a broad overview of how Viacom not only fit into that future, but was actively shaping it with a focused strategy, an invigorated leadership team, and a series of initiatives to broaden and modernize its business.

Here are a few highlights from Bakish’s remarks, emphasizing how Viacom is repositioning itself to thrive as an independent company within a rapidly changing and consolidating industry. You can watch the full remarks below.

Step 1: have a plan

“I was given the opportunity to run Viacom roughly a year and a half ago. I’m a big believer in you have to have a plan. … We rolled out a plan. Plan had number of elements to it, probably central to it, which will relate to our conversation, was this notion of flagship brands. That had to do with prioritization and true multi-platform expression. … The other thing was you need to have a killer management team. It’s another place where the company hadn’t changed much. Made significant changes on the network side of the business, really completely overhauled the Paramount team from the top down, and then we got to work executing. If you look at what’s happened in the quarters since, I describe Viacom as not a light switch, but a story of incremental progress against a destination.”

Step 2: execute

“If you look at our U.S. networks and audience share, you’ll see that we’ve consistently grown audience share. You look at a brand like MTV, which had a ratings decline in the ten percent for five years running. Now, five quarters in, we’ve consistently grown ratings every quarter. That’s a function of a different strategy and a different team and focusing on execution.”

As competition grows, Viacom benefits by building upon its content production expertise – and profiting off this competition by producing their content

Again, with what we call the tech companies coming in, do you have some incremental competition? Yes, you do. But at the same time you have a series of demand that needs to be filmed. Take Paramount Television, which is the television production side of Paramount. It didn’t exist four years ago. Today, or this fiscal year, it’ll do $400 million of revenue and it’s producing hits. It’s producing hits like 13 Reasons Why for Netflix, like The Alienist for the Turner networks, like the upcoming Jack Ryan series for Amazon, which will drop at the end of August. There’s fantastic opportunity to feed that ecosystem. At the same time, we look at our IP that we’re developing in house and we do think about, “Is this better as a linear network show on an owned and operated network, i.e., I don’t know, Nickelodeon, or is it better as a studio production, branded studio production for a third-party platform?”

Continue to drive growth through great content – both with new ideas and iconic IP

… we are mining franchises. Part of it is, sure, we’re creating new product that didn’t exist before. If you look at Paramount as an example, you have a film like A Quiet Place. Different idea, great characters in it, great storytelling, great execution, including focusing on how much it cost to make, and a great result. You also have a film like Mission: Impossible, which premiered in Paris last week, will open in the U.S. in two weeks. It is really an extraordinary film. … Yesterday, we announced that we’re taking the Rugrats franchise. It’s probably a franchise most of you have heard about. Nickelodeon franchise. We’re bringing that back in a new iteration, both for feature film and for episodic video, i.e. television, and we’ll do a whole bunch of digital native stuff. It no doubt will show up in our experiential space as it comes to life. It’s really mining those opportunities, pursuing some different business models, but making sure consumers have access and using that combination to ultimately drive growth, which is at the end of the day what I’m focused on, which is making Viacom once again grow.

Embrace technology to drive growth

At the same time, we’re using an extraordinary amount of technology in the, I’ll call it, monetization space. For example, when you look at advertising sales or what we’ve historically called advertising sales, Viacom is at the forefront of data-driven advertising in television. … Starting a year and a half ago, in every affiliate renewal we did, and we’ve renewed or extended well over half the sub-base in the U.S. by now, we incorporated the provision for dynamic ad insertion. We’re now able to insert dynamically in 90 percent of [video-on-demand] homes in the U.S. and in the two largest cable operators in the U.S. in a portion of the national avails.

Operate at (the appropriate) scale

[In answer to a question from Fortune’s Adam Lashinksky: The conventional wisdom is that Netflix, Apple, Amazon, are spending billions and billions of dollars, and therefore you and others your size can’t compete. Do you think that conventional wisdom is wrong? If so, why or how?]: “Yeah, I think it is wrong. The reason I’ll say that is it’s overly simplistic. Because if you think of scale, which is at the root of a lot of these arguments, there’s plenty of examples of scale where there’s actually no value to the combination. We see that today in some assets that own both media assets and distribution, but there isn’t really a lot of crossover. Look, I’d say is there scale or is there relevant scale. The other thing is, and I learned this because I ran our business outside the U.S. for 10 years … Those are places where we had a one percent share, so we didn’t have scale. We had to figure out how could we act like we had more scale? Those were doing things like partnering and creating ad sales, houses, and the like. That’s creating virtual scale. In a world where, yes, people are spending extraordinary amounts of money … By the way, we spent about five billion dollars on content, so we’re not exactly irrelevant in that regard, and we have relationships with leading creatives in front of the screen, behind the screen, in feature film, in episodic television, and, yes, in digital native. … I think there is an opportunity to be more nimble in this regard and not be vertically integrate and, frankly, serve a lot of different demand.

In an unpredictable, changing landscape, the only thing you can do is execute

[Answering the moderator’s question of whether Viacom would be independent a year from now]: “Who knows what the future will bring? My guess is, yes, we will be independent a year from now. We’re certainly executing in that regard. We definitely have the full support of our board. We’re talking about a number of interesting ideas, both organic and inorganic, but we’ll just have to see how the whole ecosystem plays out.”

After Hot U.S. Start, Paramount Network Launches in UK

by Stuart Winchester, Viacom

Since its U.S. debut in January, Paramount Network has quickly bolstered Viacom’s position in the premium content space, with its first three originals – Waco, American Woman, and Yellowstone – drawing strong ratings by fusing quality storytelling with top talent.

Tomorrow, Viacom will launch a free-to-air Paramount Network in the UK, bringing the blend of premium content, unscripted fare, movies and more to one of its top European markets.

“Launching on TV screens in the U.K. is another critical milestone for the Paramount Network brand, which we’re convinced will resonate strongly with British viewers, given Paramount’s distinguished and successful history of epic, cinematic storytelling for global audiences,” said Jill Offman, executive vice president of Comedy Central and Paramount Network International. “Delivering free-to-air content to millions of U.K. households underlines our belief that, despite the growing popularity of on-demand, viewers continue to value highly TV channels that offer an intelligently scheduled linear lineup of quality entertainment.”

The channel will build on the company’s considerable past success in the UK, plugging in the editorial team of Viacom-owned Channel 5 to schedule and program the new Paramount Network.

“Paramount Network is set to deliver high-end Hollywood entertainment with blockbuster movies, scripted drama and critically acclaimed comedy featuring some of the biggest names on the planet,” said Channel 5 Director of Programs Ben Frow. “Supported by Channel 5’s creative scheduling and audience insight and underpinned by Viacom’s brand-building expertise, Paramount Network is a popular premium content destination in a free-to-air world.”

Launch content will include the hit unscripted Lip Sync Battle, the seventh season of the popular Suits, Kaitlin Olsen’s The Mick, action drama Six and fantasy drama Heroes Reborn. Classic movies, some from Paramount Pictures’ 106-year-old library, will also air on the network, which will be available on Sky, BT and Freeview.

The Paramount Network in the UK is the second to launch outside of the United States. Last month, Spain rebranded its existing Paramount Channel, which was one of Viacom’s highest-rated networks outside of the U.S. Content includes a blend of movies and television series, including the locally popular reality show Alaska & Mario: El Huracan Mexicano.

“Paramount Network has great positioning and fits perfectly with our strategy in Spain,” Raffaele Annecchino, president and managing director of Viacom International Media Networks Southern and Western Europe, Middle East and Africa, said when announcing the network’s arrival. “Paramount Channel has achieved great results in Spain, but it’s time to evolve the brand even further, making the channel increasingly contemporary and relevant for the Spanish market.”

Bellator Takes the Fight Online in Nine-Figure Deal with DAZN

by Stuart Winchester, Viacom

NEW YORK, NY – JUNE 26: (L-R) Quinton “Rampage” Jackson, Gegard Mousasi, Scott Coker, James Rushton, Rory MacDonald, Wanderlei Silva and Lyoto Machida attend the Bellator-DAZN announcement press conference on June 26, 2018 at Viacom in New York City. (Photo by Dave Kotinsky/Getty Images for Bellator MMA)

In recent months, Bellator MMA has crisscrossed the globe, hosting fights for its international fan base in such diverse locations as London (Bellator 200), California (199), Budapest (196) and Israel (188), among others.

Now, the Viacom-owned global combat sports franchise is queueing up fight cards for a totally new destination – online, via a nine-figure deal with international live sports streamer DAZN.

The streaming deal plants an important digital component into Viacom’s ever-expanding live-events business while expanding Bellator’s global footprint and injecting the league with the additional financial resources it needs to expand its roster.

Noting that Bellator had become a “significant revenue generator” since Viacom acquired the property eight years ago, Viacom CFO Wade Davis underscored the importance of live events to the company’s growth strategy.

“Viacom has led the industry in creating iconic, fan-centered events through MTV’s VMAs, the BET Experience that happened in L.A. last weekend, the CMT Music Awards, and Comedy Central’s Clusterfest,” Davis said, speaking at a press conference at Viacom’s Times Square headquarters announcing the DAZN partnership. “Nobody does live events the way we do, with the combination of a focus on brand, talent and sponsors, all expressed across multiple platforms.”

Bellator intends to invest at least some of the proceeds from this streaming agreement into its roster, enhancing the live experience with a dynamic group of fighters.

“This deal will allow the roster to continue to expand, and an expanded roster means bigger fights,” Paramount Network, TV Land and CMT President Kevin Kay said at the press conference. “It means we’ll be able to give our best fighters more opportunities to do what they do best. So more fights that the fans want to see. Everybody wins.”

While MMA fans in 162 countries can already view Bellator events through local television partners, this streaming agreement will add a popular online platform to the mix. DAZN has spent several years steadily building itself into an online destination for sports fans in Canada, Germany, Austria, Switzerland and Japan. With the Bellator deal – and a recent agreement that granted DAZN U.S. streaming rights to the World Boxing Super Series – the streamer is set to enter the United States in September. DAZN will also soon expand into Italy.

“On DAZN’s worldwide platform, our fights will be seen live for the first time to new audiences around the globe,” said Bellator President Scott Coker.

Under the agreement, Perform Group-owned DAZN will exclusively stream seven annual fight cards, and will simulcast another 15 that air on Paramount Network. All fights will stream in all DAZN markets.

“It’s simple; fans want to see great fighters in competitive fights so we’ve handed the keys to Scott Coker and his venerable team to go out and recruit even more top-level talent to further stack Bellator fight cards and build on their success,” said DAZN CEO James Rushton.  “With the combination of this investment and our recent announcement to bring more than 30 nights of boxing to the platform annually, DAZN will be a must-have for fight fans in the U.S.”

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Yes, Women Can Have It All: Viacom and The Girls Lounge on Thriving in the Workplace

On a recent Friday, more than 600 Viacom employees, clients, and partners joined Viacom executives, as well as speakers from JP Morgan Chase, ColorComm, Refinery29 and WIE Network for The Girls’ Lounge. Co-hosted by Viacom and The Female Quotient, the event included a full day of panel discussions and professional coaching focused on work-life balance, leadership and diversity. Plus, attendees could schedule professional styling and headshots.

Viacom EVP and Chief People Officer Fukiko Ogisu (L) and Nickelodeon EVP and Chief Creative Officer Kim Rosenblum discuss the keys to leadership at Viacom’s The Girls’ Lounge panel event.

‘Having it all’ on your terms

The first panel, “Career on Fire: Engineering an Integrated, Rewarding Lifestyle,” focused on living mindfully as a professional with responsibilities outside the workplace.

The panelists: Viacom International Media Networks (VIMN) Senior Vice President Kate Laverge, Drop the Ball author Tiffany Dufu, Viacom Catalyst Senior Vice President Cheryl Family, and Human Resources Vice President Lisa Sipress. Brooke Ozaydinli, senior manager Viacom Marketing Strategy, moderated.

“How do you define having it all?” asked Ozaydinli to kick off the panel. “Do you think it’s even possible to have it all?”

Viacom hosted The Girls’ Lounge, a pop-up empowerment seminar, at Viacom Headquarters in May.

Laverge offered her opinion: having it all depends on individual objectives, values and ambitions.

“The question of ‘having it all’ usually speaks to the idea of wealth and riches, romance and family, and spiritual fulfillment, all at the same time,” said Laverge. “If that’s what ‘having it all’ means to you, that’s fine – but it should be an individual question versus a generalized notion.”

Sipress shared her views as a working mother.

“I struggle to have it all,” said Sipress. She discussed feeling guilty, and how she combats this guilt. Her resolution is to have a constant internal conversation around balancing work and personal responsibilities. Some days, Sipress said, work must come first. Other days, parenthood is the priority.

Dufu has evolved to believe this is an important question, especially for women. After connecting with women one-on-one, the author (who is passionate about helping women and girls advance into different levels of leadership) realized how much time women spend juggling different, unrelated tasks.

“Women are managing a lot of different things,” said Dufu. “Women are constantly negotiating between their ambition, their desire to get to the highest level of leadership and achieve mastery of their craft…I think it’s important to define ‘having it all.’ For me, it means having a career driven by my passion and purpose, having a healthy relationship with my partner, raising children who are conscious, global citizens, and being joyful and fit.

“I want all of those things at the same time; I feel I am entitled to all these things at the same time. But I can’t do it all in order to have all of that. I think it’s important to us to get really clear on what matters most.”

The takeaway: There are only 24 hours in a day so prioritize what matters most. Learn how to outsource the lower priorities. Avoid self-imposed perfection.

Drop the Ball author Tiffany Dufu speaks at Viacom Headquarters for a lifestyle panel at an employee event co-hosted with The Girls’ Lounge.

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Viacom Wins 90 Awards at PromaxBDA 2018

Viacom brands totalled 90 North America PromaxBDA Promotion, Marketing and Design Awards at a gala in New York on June 14.

Nickelodeon (21 awards), Comedy Central (27), the Paramount Network (7), Paramount Channel (6), BET (2), MTV (4), Viacom Velocity (6), Viacom Catalyst (1), Viacom18 (10) and VIMN (5) were widely represented across the Gold, Silver and Bronze awards in various categories for domestic and international productions.

Additionally, PromaxBDA honored Debra Lee, BET’s long-time former CEO, with its Lifetime Achievement Award for “her decades of achievement in our entertainment and media industry.”

Congratulations to Lee and to all of Viacom’s PromaxBDA winners and shortlist honorees. Take a look at the full list of winners for each division below:

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Viacom Activates Powerful Studio Model Growth Driver As MTV, Nick Move Into Third-Party Production

by Stuart Winchester, Viacom

Pinky Malinky is an upbeat teenager who has a lot in common with his peers: he posts rabidly on social media, he hangs out nonstop with his two best pals, and he constantly must navigate the social pressures of school and life. But there’s one very important thing that will make Pinky unique among Nickelodeon characters (besides the fact that he’s a talking hotdog): when his show debuts later this year, fans will find him exclusively on Netflix.

But Pinky won’t likely be alone for long – across Viacom’s ecosystem, brands are digging into their vaults to identify intellectual property that could be an ideal fit for a digital or linear programmer outside of Viacom. MTV, under the banner of MTV Studios, is for the first time cracking open its rich, 35-year archive to offer its iconic, youth-centric content – Real World, Daria, Aeon Flux, the Emmy Award-winning Made, just to start – in new or reimagined form on non-Viacom platforms. In addition to strategically tapping the 200 titles in its massive library, MTV Studios will churn out new ones, including, to start, The Valley (working title), about a group of friends growing up in the U.S.-Mexico border town of Nogales, and MTV’s Straight Up Ghosted, in which victims of this mobile-age abandonment will confront their disappearing former intimates.

Similar efforts will follow at other Viacom networks.

This studio model – under which Viacom will license and produce new episodes of fully owned content for third parties – will present an enormous growth opportunity, as the company’s brands increasingly feed the insatiable global demand for premium content.

Viacom is uniquely positioned to do this. The company’s voluminous original content libraries house an enormous number of beloved properties that speak deeply to their fans. Its archives stretch back decades – and, in the case of Paramount Pictures, more than a century. Its properties resonate deeply with high-value audiences: kids (Nickelodeon), African-Americans (BET), youth (MTV), the LGBTQ community (Logo), and more. Viacom’s global footprint means that those audiences stretch across cultures and borders. As the first port-of-call for creatives pitching shows tailor-made for these audiences, Viacom’s brands are keenly aware of what is in the market. Its production expertise is second to none.

And even as these sorts of deals multiply, Viacom will retain all consumer products rights for all properties, fueling the company’s increasingly robust consumer products operation.

The possibilities for third-party licensing and production are practically limitless. Pinky Malinky – which will feature Nick branding at the show open and embodies Nickelodeon’s patented spirit of fun and surprising stories and characters – is just the first of up to a dozen properties that the brand is positioning for reboots or co-productions this year alone.

Valen-time to hang out with my best friends! ❤️❤️ @babs_buttman @jj_james0n

A post shared by Pinky Malinky (@pinky_malinky) on

“Proliferating distribution platforms create incremental demand for VIAB’s [Viacom’s] content because high-quality branded content is one of the most valuable forms of differentiation for competing distribution platforms,” Needham declared in a bullish March analysis of the company’s stock. “VIAB’s film and television libraries represent differentiated, globally scalable, long-lived content.”

Take, for example, Jack Ryan, the Tom Clancy action hero who fought his way through five Paramount Pictures films, starting with 1990’s The Hunt for Red October. The quintuplet of movies grossed hundreds of millions of dollars and still carries strong brand recognition and a built-in fanbase. But while there is no obvious basecamp for Ryan within Viacom’s current brand archipelago, his bulletproof vest is a perfect fit for Amazon Video, which will debut the 10-part Jack Ryan series in August.

This branching out into third-party content production has been subtly underway for some time, both in the United States and abroad. Paramount Television, the production arm of Paramount Pictures that is producing Jack Ryan, has quietly built a $400 million-per-year business from scratch by producing premium content like Netflix’s 13 Reasons Why and USA Network’s Shooter.

In May, Viacom International Studios (VIS) united the extensive production capabilities of wholly Viacom-owned Argentinian broadcaster Telefe and majority-owned Brazilian comedy brand Porta dos Fundos with Viacom’s Miami-based production operations, creating a multi-lingual machine that will develop, produce and distribute original content around the world. A matrix of SVOD, pay TV and free-to-air distribution deals will place VIS-produced long-form series (Borges on Netflix in Latin America), cinematic adaptations (Telefe’s Animal on Fox Networks’ platforms in Latin America), telenovelas (Vikki RPM on Caracol Televisión in Colombia), and co-productions (Club 57 on Rainbow Group in Italy and Nickelodeon elsewhere) in diverse markets and maximize the potential of formerly regional or local properties.

These licensing deals will therefore sprinkle tastes of Nickelodeon and MTV and Telefe and other Viacom properties throughout the global content ecosystem, while segmenting the full brand experience for consumers who subscribe to a Viacom linear or digital distributor. Even so, this nascent third-party production is already acting as a powerful growth driver as Viacom diversifies outside of its core television business under President and CEO Bob Bakish.

“Building on the success of Paramount Television and Telefe’s quickly growing production business, we’re going to much more aggressively tap into the huge demand for content and unlock more of our IP and production and creative capabilities to drive incremental revenues from third-party platforms,” Bakish said on Viacom’s second-quarter 2018 earnings call in April. “This isn’t just an idea. … there is a lot of interest from SVOD partners in licensing library properties from MTV and Nickelodeon IP for brand-new interpretations. At the same time, we’re also developing new IP for the sector and have already closed deals for brand-new original Nick IP and animation with third parties and we see more in the pipeline.”

“We Feel Great About Where Viacom Is Today,” CFO Wade Davis Tells Gabelli Conference

by Stuart Winchester, Viacom

NEW YORK, NY – APRIL 08: Viacom CFO Wade Davis attends the 2014 UJA-Federation of New York’s Leadership Awards Dinner at Pier Sixty at Chelsea Piers on April 8, 2014 in New York City. (Photo by Taylor Hill/FilmMagic)

“We feel great about where Viacom is today,” Viacom Executive Vice President and Chief Financial Officer Wade Davis told an audience of investors at the recent Gabelli Movie & Entertainment Conference. “From a fundamental standpoint, we think a lot of the strategies that we’ve been focused on and putting in place are paying off. … the first half of 2018, our fiscal 2018 is really a transition into delivering growth in the second half of 2018 and beyond, and we feel really good about that, focus 100 percent on delivering that.”

Here are a few more highlights from Davis’ remarks at the event. You can listen to the full event here.

Advanced Marketing Solutions and strong linear pricing are driving ad sales growth

“Pricing is incredibly strong right now in the linear market … So the growth is coming from what we call our Advanced Marketing Solutions portfolio or AMS [advanced addressable inventory and brand solutions]. So between those two areas – advanced addressable inventory where we’re activating new pools generally of non-linear inventory that are addressable in nature, and brand solutions – we have a portfolio business that as we’ve said publicly is going to approach $300 million this year. It’s really — it’s growing 40-plus-or-minus percent quarter-over-quarter, and we think that rate of growth will carry into 2019, and actually in the first part of 2019 accelerate.”

Growth comes over the top  

“So when you think about where Viacom is, we’re extremely well represented in the traditional distributor-led virtual MVPDs [multichannel video programming distributor]. That’s Sling, that’s DIRECTV NOW, and those are really the virtual MVPDs that matter. … We’d love to be on [Hulu and YouTube], we’re in discussions with those guys all the time. … And as we’ve gone through and stabilized our relationships with the traditional distributors, we’ve had a lot of success in getting ourselves very well positioned with respect to any virtual or OTT product that any of those traditional distributors will launch.”

Mobile is a global growth engine

“Mobile is a place where we’re significantly benefited by our global business. We made a lot of investments in bringing mobile bundles to market internationally. I guess we’ve announced at the moment five different partnerships that we have with mobile distributors around the world in which we’re licensing some form of bundle of our content into the mobile distributors. … And we’re in very advanced discussions with the three biggest operators in the United States, feel very good about where we’re positioned with them.”

Cornerstone networks in major international markets and mobile are driving growth outside the U.S.

“The [international] business is growing double digits, both top line and bottom line. … We operate in 180 countries. We have cornerstones in the biggest, most important markets, India and Asia, UK, which is the most attractive largest media market outside of the United States, and we’re the number one broadcaster in Argentina … And then there are some underlying trends that we think are different than the domestic market. … You do have a much more progressive mobile infrastructure [internationally]. As we said, a lot of these international markets, their principal Internet access is mobile and consequently their mobile offerings are a lot more mature. … And there’s also some of the same trends and tailwinds that we’re seeing in the SVOD [subscription video on demand] marketplace, domestically are starting to play themselves out globally.”

A “world-class team of operators” is transforming Paramount Pictures

“Every member of [Paramount Pictures’] senior management team except for the CFO is new. … We’ve completely overhauled all of the processes, the green light process, development process, global marketing, et cetera. So the business is running much more efficiently. We have a world class team of operators who bring new energy to the studio. … [and Paramount Television] should do about $400 million of revenue this year, and should, for the first time, be a contributor to operating income. It’s important to keep in mind that this is really still a startup. … it’s still in a growth phase, and we expect very, very strong double-digit growth on the revenue base above and beyond the $400 million that we expect this year.”

A “forever effort” transformation will save Viacom hundreds of millions of dollars

“…  when you think about our focus on margin enhancement, it really relates to efficiencies outside of content investment. So we’ve announced that we’ve undertaken a cost transformation effort. And for us, that’s not just a onetime restructuring. I think a lot of media companies and even Viacom historically would, from time to time, announce a restructuring in which they would write off some content, let some people go. But this is an effort that we view as a forever effort and something that’s part of the new culture that we’re trying to build. We have a team that’s a full-time team staffed focused on this. We’ve been very public about the amount of savings that we’re going to be able to deliver out of the current efforts being more than $100 million in the current year and in excess of $300 million in 2019 and beyond.”

A comprehensive reimagining of the content pipeline is connecting Viacom networks with their natural audiences

“The big issue for us and the big opportunity for us is bringing the focus that we’ve cited around our flagship six networks, being able to concentrate the spend where it matters most and being very precise about what the programming strategy and the brand promises for each of those brands. … So a good example of that is MTV which had historically been dabbling in very expensive scripted programming. That scripted programming is not programming that worked particularly well on MTV for MTV’s audience, and it consumed a ton of dollars for a very small amount of hours. Not enough hours to actually have MTV be a destination for high-end scripted dramas. So what we’ve done is we’ve concentrated our efforts around high-end scripted on the Paramount Network. As it relates to MTV it’s allowed us for really in some cases less money dramatically increased the amount of original programming that we have on the network, but most importantly, it’s programming that’s aligned with a vision that’s important to MTV’s audience.”