Commentary

Is Viacom's Talk Of 'Non-Core' Networks A Slight?

Viacom says a number of its networks are “non-core” --  which doesn’t seem so good for smaller TV channels.

Now to be fair, Viacom's total stable of 25 networks have always had a hierarchy. The same goes for NBCUniversal, 21st Century Fox, and Discovery Communications -- all have anywhere from 15 to 20 channels.

Key networks with higher viewership, yield bigger revenue and bigger brand value overall. That’s what gets pushed to the top of the heap -- without necessarily tagging those networks with a particular moniker.

Viacom has identified six “core” networks as MTV, Nickelodeon, Nick Jr., Comedy Central, BET, and now Paramount (so to be shifting from the Spike brand). That leaves VH1, TV Land, CMT, MTV2 and Logo out of the loop.

But Todd Juenger, media analyst of Bernstein Research, says those 19 networks still provide some punch for Viacom in terms of revenue -- about 29% of Viacom’s domestic network revenue.

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The positive for Viacom is it isn’t thinking about stopping any of its linear cable networks -- as NBCUniversal is doing with Esquire and Cloo.

That said, in the long term, all major media companies will increasingly need to make some hard decisions, like Viacom, especially, when it comes to the rise of “skinny” TV bundles from new digital providers of TV networks.

Viewers don’t want to pay for scores of networks -- up to 200 on many traditional pay TV providers -- that they don’t watch. Research has shown, viewers regularly watch at most 15 networks.

All this means many TV network groups need to scrutinize which networks are more important than others.

What happens then? It could mean lessor channels might be better as more internationally-distributed networks, supplemented perhaps by U.S. deals with smaller digital service network providers that can take on those channels.

In part, small TV networks at big TV network groups take advantage of cross company-wide TV efforts -- sharing programming, TV development and other functions. In regards to those 19 non-core Viacom networks, Juenger says: “There is very little content investment, which means very high incremental margins.                                   

For many, that’s a solid core.

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