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.