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

by Stuart Winchester, Viacom

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

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

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

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

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

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

A cornerstone strategy drives growth internationally

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

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“2018 Is About Reinvention” – CEO Bob Bakish on Viacom’s Growth Initiatives

by Stuart Winchester, Viacom

Viacom CEO Bob Bakish sat down with Morgan Stanley media analyst Ben Swinburne at the Morgan Stanley Technology, Media & Telecom Conference last week. On a San Francisco stage in front of hundreds of members of the investment community, Bakish outlined how various growth initiatives in the international, mobile, direct-to-consumer, short-form video and live event spaces will complement Viacom’s existing business lines.

“So, if you think of 2017 really as a period of stabilization, revitalization in the company, as we look forward and we’re already hard at work at this and putting points on the board, 2018 is really more about reinvention and driving the company forward as a growth company in the future,” Bakish said.

Here are a few highlights from Bakish’s talk with Swinburne. Listen to the full conversation here. 

Viacom’s future is mobile

“And then the thing that’s really exciting really longer term, but not much longer term is the mobile space, and that’s the incremental category that will invert the whole argument. In the last quarter, we did a first of its kind deal with Telefónica in Latin America where we licensed all of our flagship brands that are in Latin America to their Movistar Play, the first-of-its-kind deal for them too, so that those services will be available to all their mobile television subscribers. … We’re also in a very interesting conversation in the U.S. right now about bringing our brands to mobile and I believe that will happen in fiscal 2018 as well. And if you can think about all the time spent on mobile and all those devices out there, I think you quickly realize what a powerful growth engine that will be for our business.”

Viacom’s content library is coming directly to consumers

“… later in the year, you’ll hear about the products we’re going to launch that leverages those assets … which we’re going to implement on direct-to-consumer basis in a differentiated way that we believe leverages not only our library assets, but also our ad sales capabilities and its complementary to what we’re doing in MVPD [Multichannel Video Program Distributors] space.”

Viacom’s growth initiatives could generate hundreds of millions of dollars in near-term value

“… we’re actively growing our participation in … the digital-native side, the Consumer Products side and the live events side, think of those as three different tracks, all complementary to the brand and to our financials. We think that is hundreds of millions of dollars of near-term value.”

Every flagship brand will have a live U.S. event

“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. 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.”

Viacom’s relationship with distributors continues to improve

“We’ve got this Advanced Ad product we can bring to the table to increase the value of some of your local avails, and we really did turn a new page,” Bakish said of settling on a deal to return Viacom to Altice. “So, we’re sitting here today in a much better place vis-à-vis distribution. We don’t have any large near-term – any large MVPD deal up in fiscal 2018. And by the way, we’ve been improving our product. … I think people are starting to understand that it’s differentiated and that it is valuable. … And you put those things together both in the U.S. and certainly globally, that will be a growth platform.”

International continues to grow rapidly

“[Viacom International Media Networks] is a business that in the last quarter grew ad sales, affiliate sales, ancillary sales, double-digits. It’s a business that grew the bottom line strong double-digits. And it’s not weighted to any one particular thing, it’s driven by our, let’s call it global or in this case ex-U.S. portfolio of brands, MTV, Comedy Central, Nickelodeon, Paramount Network and it’s driven by our local cornerstones, which include Channel 5 in the UK, which is an acquisition we did a couple of years ago, which transformed our business there. … That includes our other local cornerstone which we acquired. Last thing I did in International, Telefe, which is the number one broadcaster in Argentina, which is a story in its own way, which maybe we will come back to, but that’s an incredible asset and really makes us – positions us to be a major player in Spanish language content which we have not historically been, but we are quickly becoming. And so, the combination of those global brands and the local cornerstones is what’s driving the growth.”

“This Continues to Be an Extremely Undervalued Company” – Six Highlights from Bob Bakish’s UBS Global Media & Communications Q&A

by Stuart Winchester, Viacom

Viacom CEO Bob Bakish attends the Ribbon Cutting for the new Viacom Building on January 26, 2017 in Los Angeles, California. (Photo by Todd Williamson/Getty Images)

Viacom CEO Bob Bakish appeared onstage at the UBS Global Media and Communications Conference yesterday in New York City, where he spoke to media and telecommunications analyst John C. Hodulik.

Bakish discussed the financial improvements surfaced in Viacom’s recent earnings report, the strength of Paramount’s film and television studios, flagship network highlights, and his optimism about the growth opportunities available through multi-platform distribution, live events, and other streams.

In his remarks, Bakish crystalized several key points about Viacom’s operations. Six of the most important are pulled out below. Click here to listen to the full conversation.

1) Viacom is a global cross-platform content engine

“And as we pivot and look to 2018, what we’re really focused on – and people think about Viacom and they say, ‘you’re a pay-TV company.’ And it’s true that we have a substantial business base in pay television. But what Viacom really is, it’s a global content engine across television, across feature film and increasingly across digital-native.”

2) Partnerships are key to growth

“The interesting thing is outside the U.S., in most markets, still today, Viacom is a relatively small player. And so, how do we get the benefits of being a bigger player? And the route to that was through partnership, whether that was partnering with our distributors, on the advertising side. We participated in a whole set of ad sales houses through that time, some of them we run, some of them other people run, some of them were joint ventures but that was all about getting the benefits of scale.”

3) Viacom’s flagship brands remain the priority

“Well, flagships [Nickelodeon, Nick Jr., MTV, Comedy Central, BET and the soon-to-launch Paramount Network] are certainly Viacom’s priority because again we think there’s significant opportunity particularly to grow share there on the network side, as well as broader awareness. As we begin to implement that strategy we certainly remixed our programming investment and moved it towards the flagships, point one. And point two is within the flagships, a brand like MTV, which I’m continuing to be tremendously excited about, there was a place where we put a new team in place, we put a new strategy in place, that strategy was about shifting the programming mix. MTV had gone to a place where it was very invested in scripted programming, which is quite frankly something you can get from a variety of places and it was not really a core association of the brand, so we’ve moved it to a more of an unscripted place, more of a live place.”

4) Viacom is the market leader in advanced advertising

“And by the way, on the advanced advertising space, Viacom is clearly the market leader. We partnered with Fox and Turner to set up OpenAP and we did that so the category can continue to scale, which is a very important thing for us. But we were the leader and we, as far as I know, are the only people doing these type of multi-faceted distribution deals and you’ll see the benefit of those start to come online as we get into 2018 too, and we’re able to unlock some more of this addressable inventory. So I think that is a very exciting road ahead. And again, sets the stage for a much more productive partnership with the MVPDs here in the U.S. and frankly around the world.”

5) 2017 was about stabilization, 2018 is about acceleration

“But as we accomplished really the stabilization of the company and I think that’s the best word, 2017 was about stabilization, 2018 is about acceleration particularly in these newer areas.”

6) Viacom is an undervalued cash machine

“Well, Viacom if you look at 2017, $1.5 billion to $1.7 billion in cash flow, durable cash flow, it’s about a 15 percent yield. So, this thing is a significant cash machine. You look at 2017 and we eliminated the big overhang on the business, quite frankly, which was the uncertainty around distribution. We have distribution deals with mid-single digit annual escalators locked in through well past 2020. So we have a secured distribution base and we have these incremental opportunities that are not only ideas on the next-generation platforms and solutions, on incremental revenues beyond the core, they’re not only ideas, they’re businesses we are already in, in 2017 that we are, therefore, know how to operate and can accelerate. So there is a tremendous opportunity ahead. This continues to be an extremely undervalued company.”

Bakish also appeared on CNBC last week. Watch his conversation with Julia Boorstin here.