Viacom Tanks 3% In 3Q Ad Dollars

Phillipe Dauman of Viacom Viacom reported a 3% drop in third-quarter U.S. ad dollars Monday, but did not place all the blame on the macroeconomic situation, attributing some of the slowdown to ratings issues at several of its networks.

Company CEO Philippe Dauman said on a conference call that ratings softness at MTV, BET and VH1 "compounded" pullbacks by marketers. Separately, Dauman said that the outlook for the ad market through the end of the year does not appear to be any rosier.

Viacom does not break out ad dollars for its MTV Networks/BET group's domestic performance, but on a worldwide basis the figure came in at $1.16 billion.

Dauman said the company is taking "all appropriate steps to prepare" for what hurdles may come in 2009. He cited the announcement last week that the sales leaders of three groups--one includes MTV and VH1, another Comedy Central and Spike, and the third the Nickelodeon brands--would now report directly to the overall chiefs of the clusters.



"This will enhance the linkage between programming and advertising strategies," Dauman said.

Dauman also said the company is looking to invest more in developing original programming to drive ratings (and will look to cut costs elsewhere to allow it). He declined to cite a figure, except to say that the percentage increase would be in the high single digits.

Overall in the third quarter, Viacom revenues were up 4% to $3.41 billion. Revenues for the networks were actually up 6% on the backs of non-ad-supported operations like sales for the "Rock Band" video game and subscription fees.

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