• by David Goetzl  @dgoetzl, June 4, 2007

While acknowledging that commercial ratings will inevitably become the standard, Viacom has no plans to make upfront deals based on them this summer, the company's CEO said Friday.

"We think it needs another year of fine-tuning for cable networks," Philippe Dauman told a group of investors. If Viacom holds to that pledge, it could have a ripple effect on what happens in the cable market, given that the company's networks, from MTV to Comedy Central, account for so much of it.

But Viacom isn't the only cable programmer to express concerns that the new commercial ratings have accuracy issues. Many prefer to wait before using them in deal-making, despite some buyers' eagerness to use them posthaste.

Dauman did add that commercial ratings will ultimately emerge as the dominant currency.

Still, Viacom's revenues won't be affected, and he says "we can adapt easily," suggesting that its networks would look to use more pods of shorter lengths. Also, the nets will continue the industry trend of finding ways to meld programming and advertising to hold viewers--such as a coming MTV series of 12 three-minute clips plugging American Eagle and other innovations--rather than running traditional commercial breaks.

Separately, Dauman said Viacom had multiple conversations with News Corp.'s Peter Chernin and NBC Universal's Jeff Zucker about joining their co-venture to compete with YouTube in online video before eventually declining.

Viacom could profit more by going it alone, without the expenses that would be involved and by maintaining full control over its content. "We can adapt the terms of distribution to our advantage," he said. Instead, Viacom has a deal with fledgling video site Joost to offer its programming, which gives it an undisclosed minority stake in the company.

Dauman also reiterated Viacom's commitment to growing its business online--launching several hundred new Web sites over the next year. The new sites would be focused on communities--discussion groups, message boards, etc.--built around existing and debuting brands within the MTV Networks portfolio.

The Internet is headed toward "more fragmentation of communities," he said, much like cable's effect on television nearly three decades ago. Regarding the health of Internet advertising at Viacom, Dauman said the company has added more than 50 new advertisers in the first quarter, while multi-platform sales are prospering, with its top-15 Internet advertisers also running spots on-air.

Another growth area Dauman identified was MTV Networks abroad. The company derives 24% of revenues outside the U.S. ($1 billion-plus for the cable channels), but with unimpressive profit margins. In 2008, the margins for the networks will grow by 10% to 15%. Viacom will work to "unlock the value of our international operations."