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.
This time we have an update on the “Hierarchy of Screens,” a video about global social media use, American kids’ role in household purchases, and new research on Saudi teens. As always, on our blog you can find these and all our stories in English, Latin American Spanish and Brazilian Portuguese.
As Viacom’s branded content studio, Velocity is a driving force in developing custom marketing solutions for partners. For this edition of “5 Questions,” we asked Tom De Napoli, Velocity’s Senior Director for Business Strategy & Innovation, to share his thoughts about how his team is building partnerships that align with and enhance Viacom’s cultural impact, and what new collaborations Velocity is currently developing.
Liza’s secret is out on Younger — but that hasn’t stopped fans from tuning in. In fact, more fans watched last week’s episode than any others this season.
The Season 5 episode, A Christmas Miracle, which aired on TV Land last Tuesday, hit a season high of 1.3 million total viewers (L+3), according to the network. Its ratings peaked in the key 24-54 demographic, particularly among women, with double-digit increases from the previous week. Season 5 of Younger is on pace to score its highest-rated season among both adults 18-49 and women 18-49.
The episode sent Christmas to July, where Liza’s long-time off-and-on love interest Charles declares his commitment to her in a swirling snowstorm following an unplanned encounter at a holiday party.
The popular series, starring Sutton Foster, Hilary Duff, Peter Hermann, Nico Tortorella and Miriam Shor, was the No. 1 original ad-supported cable sitcom reaching the key women’s demographics of 18-49 and 25-54 (Nielsen, L+3) in 2017 — and it looks like things are only heating up this season.
A new episode of Younger airs on TV Land tonight at 10 p.m. ET.
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.”
In the latest installment of Going Places, we get to know Paramount Pictures employee Erika Sanchez, who works as an executive assistant to Liz West, executive vice president of International Marketing, Communications, & Home Media, Paramount Pictures. Prior to starting in her current role, Sanchez interned for Paramount Pictures, at its International Publicity department.
Prior to starting in her current role as an executive assistant, Erika Sanchez interned for Paramount Pictures at its International Publicity department.
Campus to Career: Hi Erika, we’re so excited to hear your story! Can you share a bit about your background?
ES: Sure! I am originally from Los Angeles and graduated California State Fullerton with a major in communications, and minors in cinema and television arts. Since graduation, I have been working as an executive assistant to Liz West at Paramount Pictures.
What are some of your favorite aspects of working at Paramount?
Paramount was the first studio that I gravitated towards. I appreciate the connection Paramount shares with Viacom, and the closeness it has to the television side of the entertainment business.
At first, I was unsure whether I wanted to go into film or television, and Paramount’s relationship to Viacom let me to see how synergistic both worlds can be. The culture at this company is amazing.
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.
An artist’s impression of the Nickelodeon theme park that will open in the massive Mall of China.
SpongeBob SquarePants, Dora the Explorer, the PAW Patrol gang, and the Teenage Mutant Ninja Turtles are teaming up for a new adventure: Nick’s iconic crew is headed for Chongqing, China, where they will headline attractions at the largest indoor Nickelodeon theme park in the world.
The 28,000-square-meter entertainment zone, which will live at the heart of the massive Mall of China complex when it opens in 2020, is a vital part of Viacom’s global efforts to seed its popular brands across a range of live events and experiences.
“Creating immersive on-the-ground consumer experiences remains an important part of our business. As we continue to grow the footprint of Nickelodeon theme parks, I am confident this will also open up new opportunities for the Nickelodeon brand and for our partners across multiple platforms in this important Chinese market,” said Viacom International Media Networks (VIMN) Managing Director of Asia Pacific Mark Whitehead.
The park – which VIMN will co-develop with the Mall of China, Jiayuan Group, China Creation Group and Triple Five Group – will showcase 14 Nick properties across 29 attractions, including Asia’s first tilting drop tower and the TMNT launch coaster, which will be the highest, fastest and longest indoor rollercoaster in the world.
“This is testament to the power of Nickelodeon and our iconic characters that fans, kids and families have come to love, which in turn, enables our ability to further boost the Nickelodeon entertainment experience for them,” said VIMN Senior Vice President of Location Based Experiences Gerald Raines.
Shuga, which first aired in 2009 and starred Oscar-winning actress Lupita Nyong’o, blends in-depth stories about students across English and, for the first time, French-speaking Africa with informative sexual health information, including how to stay protected from HIV and how to seek out treatment. The latest multimedia “edutainment” campaign is intended to reach previously untapped populations between the ages of 15 to 24 as AIDS remains the leading cause of death among ages 10 to 24 in Africa.
“Millions of people in Africa watch MTV Shuga,” said Lelio Marmora, executive director of Unitaid. “Our partnership with MTV Staying Alive gives us a terrific opportunity to reach young people who don’t have reliable health information and empower them to take charge of their health — including testing themselves for HIV.”
The series is set to debut in South Africa and Côte d’Ivoire between 2018 and 2020.