Viacom Sees Future Growth, Wary Of Ad Prospects
Almost a week after Viacom announced that a suffering ad market would hurt its 2008 revenues, the company's CEO said the sky is not falling--even if the Dow is--and a growth path remains. Still, Philippe Dauman said predicting the ad market's prospects for next year is difficult, especially with the unsteady macroeconomic environment.
"Clearly, in the advertising marketplace, there is softness out there," he said at a New York industry event Wednesday.
Viacom said last week that U.S. ad revenues were down some 3% in the recently ended third quarter.
But going forward, he said Viacom is "well-positioned as compared to many of the other players out there." Dauman was referring to the much-chronicled uphill battles that local broadcasters are facing. Even with its troubles, Dauman said Viacom--with its fleet of cable networks--is fortunate that it's in the national ad business.
Some 30% of Viacom's revenues come from ad dollars; the remainder come from network affiliate fees and its Paramount film studio, among other streams.
On Friday, in addition to word that third-quarter ad dollars were down, Viacom adjusted downward its expected earnings performance for the year.
Other comments Dauman offered Wednesday:
*Kids' network Nickelodeon has significant growth opportunities ahead of it, particularly in the licensing area. Viacom is exploring a kids-oriented version of its Rock Band video game. And it's expanding its Nick-branded cruise business.
*Viacom is focusing on growing organically, and has no plans to make major acquisitions.
*The planned 2009 launch of a pay-cable channel with partners MGM and Lionsgate is on pace. Dauman said the company has "made great progress" in negotiating carriage deals with distributors, but declined to provide any details.
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