Rather than heading home to relax in air-conditioned apartments or neighborhood bars after work on Wednesday, July 25, a group of Paramount Pictures employees chose to spend the night volunteering outside in the summer heat.
Embracing the Viacommunity spirit of “All good, all around,” Paramount’s volunteers gave back to kids in their local community with an evening of activities and an outdoor screening of Paramount’s animated flick Sherlock Gnomes at Los Angeles’ Lemon Grove Park.
“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-reviewedMission: 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.
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.
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.”
Imagine bringing your childhood obsession or your favorite cartoon to life in pin form, and then having it sold as an exclusive, limited-edition collectible at San Diego Comic-Con (SDCC) to thousands of adoring fans. That’s what happened when Nickelodeon Animation artists based out of the Burbank, California studio competed in the office’s first-ever SDCC Enamel Pin Design Contest.
From art directors to production coordinators to interns, Nickelodeon animation artists created and submitted more than 100 designs for vibrant enamel pins to be sold at Nickelodeon’s popular booth on the SDCC show floor.
Featuring pin designs by Nickelodeon employees Morgan Bell, Cynthia Avila, Rachel Forman, Colton Davis, Kate Coffey and Samantha Armiger.
Here are the six winners whose designs Nick selected for manufacturing:
Bozoma Saint John, self-described “force of nature in fierce stilettos” and newly minted chief marketing officer for entertainment company Endeavor, came to Viacom’s Times Square headquarters in May to share career wisdom and empowering life advice with Viacom employees at an event organized by the company’s Office of Global Inclusion.
Michele Thornton Ghee, BET Her senior vice president of Ad Sales, moderated the discussion with Endeavor’s chief marketing officer Bozoma Saint John at Viacom Headquarters in May 2018.
At Viacom’s employee event, Saint John strutted in wearing six-inch designer heels, looking every bit the #girlboss: poised, commanding and unapologetically stylish. In an ebullient exchange with long-time friend and moderator Michele Thornton Ghee, BET Her senior vice president of Ad Sales, Saint John traced her non-traditional life and explained how the unique worldview that it formed drove her success in a traditional business world.
The numbers speak for themselves – the BET Awards are: the top cable awards show in the key 18-49 demographic for the fourth consecutive year*; the top cable awards among African-Americans 18-49 for the 17th straight year; and the most social cable awards show year-to-date and most social program of the night, sparking 2.1 million interactions (+89 percent total engagements from 2017) across Facebook and Twitter, topping even soccer’s World Cup for online buzz.
LOS ANGELES, CA – JUNE 24: Janelle Monae (C) performs onstage at the 2018 BET Awards at Microsoft Theater on June 24, 2018 in Los Angeles, California. (Photo by Paras Griffin/VMN18/Getty Images for BET)
Strong performances and a broad-based award slate that honors everything from the best in music (Cardi B, Drake, Kendrick Lamar), to industry legends (eight-time Grammy-winner Anita Baker, former BET CEO Debra Lee), and humanitarian achievements (Parkland hero Anthony Borges, 11-year-old March For Our Lives speaker Naomi Wadler), fused to drive the strong ratings and social metrics for the BET Awards. In a lineup that included Janelle Monae’s acrobatic rapping, a surprise appearance by J. Cole, and a multi-genre performance by Snoop Dogg, Meek Mill met universal acclaim for what the Washington Post called, “the night’s most powerful performance,” addressing a matrix of issues from police brutality to mass incarceration on a recreated street corner in his new single Stay Woke:
On Monday, June 11, Viacom interns and employees gathered in a pop music-filled conference room at the company’s Times Square headquarters. They had come to join Viacommunity – Viacom’s social-responsibility arm – to assemble duffle bags full of towels, sheet sets, laundry bags, comforters, backpacks and other items for disadvantaged college-bound students.
The two-hour event was part of Project Move-In Day, a collaboration between the Mayor’s Office of New York City’s NYC Service program, the New York City Department of Homeless Services (DHS), and corporations such as Viacom that aims to provide 150 homeless or disadvantaged students with a packaged bag of dorm necessities at a summer send-off reception honoring their hard work and dedication.
Viacom employee and intern voluneers at the company’s New York City headquarters help fill duffel bags for underprivilged college-bound students as part of a partnership with NYC Service.
Kylie Balogh and Gina Yoo from NYC Service led off the event by screening an inspirational video featuring a permanently wheelchair-bound girl expecting to attend college. She lives with her brother and grandmother in a shelter. In spite of all these challenges, she spoke in the most optimistic and engaging way, praising this organization and its support for her aspirations. She was certain that she would succeed. She is just one of hundreds of young individuals striving for greatness through DHS’ Future Leader Program. These teens may need assistance in getting from point A to point B, but, from the way this young woman spoke there seemed to be little doubt that once they arrived, they will achieve something special.
The volunteers, who came from two of Viacom’s New York City offices, worked with speed and efficiency, some focusing solely on packing or card writing, and others creating their own package from start to finish. The handwritten cards included supportive notes of praise and advice, emphasizing that these teens deserved this chance and predicting that they will do great things. A pizza party followed.
One of the many things that makes Viacom stand out as an employer is that it continually supports those in need while creating enjoyable experiences for volunteers who want to be part of those efforts. This bag-assembly event – part of Viacommunity’s year-round All Good, All Year initiative, which provides monthly employee volunteer opportunities – was a huge success. All participants seemed genuinely thrilled to be there and it generated the perfect opportunity for new hires and interns to get acquainted with one another and with Viacom’s philanthropic efforts.
VidCon, the world’s biggest conference for online video, was held from June 22 – 24, and Viacom showed up in a big way. Paramount Network hosted a panel on the power of storytelling. Nickelodeon held activations around Double Dare and Rise of the Teenage Mutant Ninja Turtles, plus a special appearance by JoJo Siwa. MTV, BET, Comedy Central and Velocity were also represented. Additionally, Viacom held a panel on the power of youth to create change to debut Viacom’s new global pro-social initiative, Generation Change. For this 5 Questions, we spoke to VidCon co-founder and chairman Hank Green to hear about the vision behind the event and where it’s headed next.
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.
More than 2 million fans dialed up the CMT Awards earlier this month, watching across three Viacom networks (CMT, Paramount Network and TV Land), as Blake Shelton took Video of the Year and Male Video of the Year for I’ll Name the Dogs, and Carrie Underwood carried Female Video of the Year for The Champion, featuring Ludacris. Little Big Town hosted. Dan + Shay scored an upset Duo Video of the Year win for Tequila. Luke Bryan, Dierks Bentley and Florida Georgia Line debuted energetic new singles. Even the Backstreet Boys picked up an award.
And don’t forget about the Royal Family spoof:
CMT Music Awards
But for some fans, that parade of star power across their screens just isn’t enough. For the second consecutive year, thousands of the most dedicated descended upon Nashville for the CMT Summer of Music Festival, which this year sprawled across three days and five events and drew an estimated 25,000 fans.
“Last year, we evolved the CMT Music Awards from a one-night-only-TV event into a multi-day festival spread across the city,” CMT General Manager Frank Tanki told Billboard. “It was a huge success with fans and advertiser partners alike, allowing everyone involved to experience CMT is an entirely new and powerful way.”
This multiday meeting of high-powered sponsors (Ram Trucks, Boston Beer, Kind Bar, Pedigree pet food), with rollicking events (a puppy festival, an emerging-artists concert, a taping of Crossroads, a block party), injects a multidimensional element into CMT’s marquee event.
Fans in Nashville for the awards would usually just “end up at the honky tonks on lower Broadway,” CMT Senior Vice President of Partnerships Adam Steingart told Variety. “But there’s so much more to provide to them that enhances the overall experience.”
NASHVILLE, TN – JUNE 06: Little Big Town performs onstage at the 2018 CMT Music Awards at Bridgestone Arena on June 6, 2018 in Nashville, Tennessee. (Photo by Jason Kempin/Getty Images for CMT)
This broadening of an annual awards show into an immersive fan adventure is a strategy long used by CMT’s fellow Viacom network BET, which hosts the four-day BET Experience (which is ongoing now through June 24 in Los Angeles), leading up to its annual BET Awards (this Sunday, June 24). This increasing focus on live events is in fact proliferating across Viacom, as the company increasingly diversifies outside of its core business under President and CEO Bob Bakish.
“Again, the events space in this fiscal year, every flagship brand [Nickelodeon, Nick Jr., MTV, BET, Comedy Central, Paramount Network], will have an events in the U.S.,” Bakish told a gathering of investors at the Morgan Stanley Technology, Media & Telecom Conference in March. “That is something that was not true before. So, that’s Nickelodeon, that’s Comedy Central … So, that’s an important incremental activity and one that consumers and advertisers and for that matter, talent, like.”