Viacom Sends Another Upfront Signal, Tells Wall Street It's Feeling Bullish
"We are absolutely very, very bullish that CBS will pick up significant market share in the upfront," said Mel Karmazin, president and chief executive officer of Viacom, parent company of CBS, UPN, and the MTV cable networks, among others. "We are in the absolute very best competitive position going into the upfront [that] CBS has been in over a decade," he added.
Karmazin spoke during a conference call Thursday morning, discussing Viacom's record first-quarter results--which saw double-digit gains in advertising revenues, among other financial measures. First-quarter advertising revenues totaled $3.2 billion, up 21 percent from the first quarter in 2003. Advertising revenues at CBS and UPN increased 26 percent on the strength of the Super Bowl, NCAA men's basketball championships, and prime time. MTV Networks' advertising revenues were up 35 percent, and up 16 percent at BET.
Even radio--which had been a drag on the company, with only 1 percent gain in 2003--rose 3 percent in the first quarter, and is expected to finish about 5 percent to 7 percent higher in 2004 compared to 2003.
In the first quarter, Karmazin said the scatter market was good for CBS-- selling more units in the high single digits, with price increases in the double digits on first-quarter inventory. The second-quarter scatter market was seen as looking good, with pricing better than the first. Third-quarter options are at "very normal levels" at the networks, he said.
"The scatter market in cable is very, very strong," Karmazin said. Second-quarter options are about 3 percent.
Karmazin didn't seem worried about a reputed shift from broadcast to cable, as he pointed out that Viacom had a big share of the cable market. "We say, 'thank you,'" Karmazin said.
He also didn't seem concerned about the possible changes to the upfront, which are being discussed by advertisers with the networks and agencies.
"We have no reservation about keeping the system the same, or doing it any way the buyers want to do it," Karmazin said. "We're in the business of selling advertising to our clients, and we offer them great value and will do it any way they want to do it."