Viacom had a tough third-quarter financial period -- with declining advertising and TV ratings. Much of this was expected, say analysts.
Viacom’s U.S. advertising dropped 8%, with overall
media networks revenue sinking 11% to $2.48. That includes lower affiliate revenues, which dropped 19%.
Total Viacom viewership was down 3% in the period versus the third quarter a year
ago -- and 5% lower when looking at key demographic groups. One of its big networks, Nickelodeon, was down 4% in kid viewer demos -- and 1% higher when looking at all viewers.
Viacom’s
worldwide advertising also lost 8%, with its affiliate revenues 16% lower. Excluding an unfavorable 8% impact of foreign exchange, international affiliate revenues increased 15%.
International
markets benefited from new channel launches, increased subscribers and subscription video on demand and other OTT service deals.
Recently, Sony PlayStation Vue announced that it was dropping
the Viacom networks.
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Viacom’s Filmed Entertainment -- Paramount -- dropped 24% to $774 million. This was due to lower theatrical revenues, given strong gains a year ago -- specifically
the international performance of “Mission: Impossible-Rogue Nation” in the fourth quarter of 2015.
Specifically, theatrical revenues sank 55% to $203 million; with home
entertainment revenues increased 23% to $199 million. Licensing revenues were at $326 million.
Barton Crockett, media analyst for FBR & Co., wrote: “Results could improve prospects
for a merger with CBS, in response to the controlling Redstone family's request to review this possibility.”
He added: “We believe that Viacom content like Nickelodeon could
be very helpful to CBS All Access, as it would add kids' content to a service that right now is mainly targeted at adults.”
Todd Juenger, media analyst at Bernstein Research, said:
“Viacom's key networks serve audiences who are rapidly abandoning linear TV in favor of digital, on-demand options. We believe Viacom will struggle to keep their network brands relevant in
that environment.”
Viacom stock was down 2.2% to $36.51.