Viacom Ad Revs Drop 4%, Global Ads Up 11%

Viacom posted lower advertising results for its domestic networks for its most recent quarterly earning period.

U.S. domestic advertising revenue fell 4% in the company’s fiscal second quarter -- a bit more than many analysts estimates. Lower viewer impressions was the main reason, although there was higher ad pricing. This followed a previous 2016 quarter period where advertising revenue sank 3%.

Some analysts are concerned, especially amidst a modestly good U.S. TV advertising market. Todd Juenger, media analyst at Bernstein Research, writes: “If a company produces -4% [advertising growth] when demand is strong, what should we expect as demand weakens?”

International advertising sales helped offset some of this; it was up 11%. Total worldwide advertising for the company was down 1% to $1.1 billion.

Viacom’s cable networks also had a small gain from U.S. affiliate fees -- up 1% -- with total worldwide affiliate revenues 2% higher to $1.2 billion. While there were some scheduled rate increases in the period, this was offset by what the company says is a “modest decline” in subscribers.

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Bernstein Research notes total Viacom viewers ratings during the period was down 6% with key demographic ratings off 8%, according to Nielsen C3 ratings, average commercial minute ratings plus three days of time shifting.

Plus, there were declines in affiliate fees from subscription video on demand and OTT platforms.

Overall, Viacom witnessed revenue 8% higher to $3.3 billion during the period, with net income attributable to Viacom dropping 60% to $121 million from $303 million in the comparable quarter period of a year ago.

Virtually all of the positive revenue news came from a big 37% gain in filmed entertainment revenues to $895 million. Theatrical revenues were up 10% to $238 million; home entertainment revenues were up 29% to $198 million; and licensing revenues gaining 45% to $347 million.

Viacom stock price in mid-Thursday was down 3% to $38.75.

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