Viacom Reports 3% Ad Growth Across Cable Nets

Phillipe Dauman

Television advertising is definitely back at Viacom. On Thursday, Viacom said advertising revenue grew 3% in the first quarter across all its cable channels worldwide.

Viacom Chief Executive Officer Philippe Dauman said during a conference call: "The overall mood of our clients is increasingly optimistic, and marketing budgets are beginning to loosen up."

The company also noted that in the U.S., its flagship MTV Network finally witnessed a rise in viewership. This came after several periods of negative results. New programming at Nickelodeon also saw viewer growth.

Advertising revenue climbed 1% for its domestic cable channels, including MTV, Nickelodeon and VH1. The company said this was offset by the weak advertising sales of 2009's upfront selling period.

Overall, its media networks revenues increased 4% to $1.94 billion, driven by growth in affiliate fees and advertising sales. Much of this gain was due to worldwide affiliate revenue, which grew 9%.

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Net income at Viacom overall grew 38% to $245 million from $177 million in the first quarter of 2009. Viacom's revenue sank $2.79 billion in the first quarter of 2010, a 4% drop from $2.91 billion in 2009.

But Viacom's filmed entertainment revenues continue to be troubled -- especially coming from its home entertainment revenues. The division witnessed an 18% decline to $886 million. There was a 34% decline in home-entertainment revenues alone, the result of bad comparisons to big gains in first-quarter 2009, which benefited from DreamWorks Animation's "Madagascar: Escape 2Africa" DVD release.

The positives came from home-entertainment releases of "Up in the Air" and continuing sales of "Star Trek, Transformers: Revenge of the Fallen" and "G.I. Joe: The Rise of Cobra." Theatrical revenues declined 6% because of fewer films from its Paramount Pictures studio.

Worldwide ancillary revenues declined 7% reflecting lower sales of Rock Band music video games.

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