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  • Viacom net earnings plummet on restructuring & programming charges

    BENGALURU: Viacom Inc (Viacom) reported a steep decline of 60.1 percent in net earnings for the quarter ended 31 March 2017 (Q2-17, current quarter) as compared to the corresponding year ago quarter – year-on-year (y-o-y). Operating income decreased 43.3 percent y-o-y in the current quarter. The company in its earnings release says that reported operating income reflects restructuring and programming charges of $280 million resulting from the execution of new strategic initiatives, including the prioritization of six flagship brands: BET, Comedy Central, MTV, Nickelodeon, Nick Jr. and Paramount.

    Net earnings attributable to Viacom for Q2-17 were $121 million as compared to $309 million in Q2-16. Operating income for Q2-17 was $332 million as compared to $586 million in the corresponding year ago quarter.

    Viacom reported 8.5 percent y-o-y increase in revenue for Q2-17 at $3,256 million as compared to $3,001 million reported for the corresponding year ago quarter.

    Viacom president and CEO Bob Bakish said, “In the second quarter, Viacom delivered continued top-line improvement, with growth in affiliate revenues, international media networks and across every business segment of Paramount Pictures. Additionally, we executed quickly on our strategic plan, making significant organizational changes to better focus and align Viacom’s brand portfolio and ensure strong leadership, including the appointment of Jim
    Gianopulos to chart a new course at Paramount. We are working diligently to cement Viacom as a partner of choice in the industry, presenting new and reinvigorated brand strategies for our advertisers, producing creative and flexible new opportunities with our distributors and recommitting ourselves to be the home for the world’s best talent.”

    “Viacom also took significant steps forward on our plan to strengthen our balance sheet, improve our leverage profile and enhance liquidity. Since the end of our first fiscal quarter, we completed a successful hybrid debt offering, redeemed outstanding debt and executed on the sale of non-core assets, including the pending sale of our stake in EPIX. There is a lot of work still to do, but we are making important changes at Viacom, taking substantial strides towards revitalizing our portfolio of brands and returning the company to consistent top-line growth,” Bakish added.

    The company has two major segments – Media Networks and Filmed Entertainment.

    Media Networks

    Media Networks revenue for the current quarter increased y-o-y by a marginal 0.5 percent despite a 1.2 percent decline in advertising sales. The segment reported revenue of $2,394 million for Q2-17 as compared to $2,381 million in Q2-16. Adjusted operating income declined 7.2 percent to $747 million from $845 million in the year ago quarter.

    Media Networks advertising revenue declined 1.2 percent y-o-y in Q2-17 to $1,109 million from $1,123 million. Worldwide advertising revenues increased 1 percent, excluding a 2-percentage point unfavourable impact from foreign exchange. Domestic advertising revenues decreased 4 percent, driven by higher pricing more than offset by lower impressions. International advertising revenues increased 11 percent. Excluding foreign exchange, which had an 11-percentage point unfavourable impact, international advertising revenues grew 22 percent. The gains in international advertising were driven by the acquisition of Telefe, which had a 17- percentage point favourable impact, and continued growth in Europe says Viacom.

    Affiliate revenue in the current quarter increased 2.4 percent y-o-y to $1,156 million from $1,129 million. Domestic and international affiliate revenues increased 1 percent to $975 million and 10 percent to $181 million, respectively. The growth in domestic revenues principally reflects rate increases, partially offset by a modest decline in subscribers and a decline in revenues from SVOD and other OTT agreements. Excluding foreign exchange, which had a 4-percentage point unfavourable impact, international affiliate revenues increased 14 percent. The increase in international revenues reflected the impact of rate increases, subscriber growth and new channel launches, as well as higher revenues from SVOD and other OTT agreements. International affiliate growth included a 4-percentage point favourable impact from the acquisition of Telefe.

    Ancillary revenue was flat y-o-y t $129 million. Domestic ancillary revenues decreased 8 percent to $70 million while international ancillary revenues increased 11 percent to $59 million.

    Filmed Entertainment

    Filmed Entertainment revenues grew 36.6 percent to $895 million in Q2-17 from $655 million, reflecting gains in theatrical, licensing, home entertainment and ancillary revenues. Domestic revenues increased 25 percent to $458 million in the quarter, while international revenues increased 51 percent to $437 million.

    Filmed Entertainment segment’s adjusted operating loss narrowed to less than half $66 million from an operating loss of $136 million in Q2-16. The company says that the improvement principally reflected the various revenue increases, partially offset by higher operating expenses.

    Theatrical revenues rose 10 percent to $238 million, with revenues from current quarter releases up 73 percent compared to releases from Q2-16. Domestic theatrical revenues decreased 45 percent, while international theatrical revenues grew 98 percent, reflecting the strong international performance of xXx: Return of Xander Cage. Foreign exchange had a 3-percentage point favourable impact on international theatrical revenues.

    Licensing revenues increased 45 percent to $347 million in the quarter, primarily driven by Paramount Television production, as well as higher revenues from licensing arrangements with pay television and SVOD distributors. Domestic licensing revenues grew 85 percent, while international licensing revenues increased 24 percent.

    Home entertainment revenues increased 29 percent to $198 million in the quarter, reflecting the number and mix of current quarter releases. Domestic and international home entertainment revenues increased 23 percent and 49 percent respectively. Foreign exchange had a 5-percentage point unfavourable impact on international home entertainment revenues.

    Ancillary revenues increased 149 percent to $112 million, primarily driven by the sale of a partial copyright interest in certain current year releases related to a film slate financing arrangement. Domestic ancillary revenues increased 158 percent to $93 million while international ancillary revenues increased 111 percent to $19 million.

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  • Disney Media Distribution & Lionsgate join first pre-LA screening

    MUMBAI: MIPTV has announced that, for the first time, Hollywood studios will give a sneak peek in Cannes of the new shows to bow ahead of this year’s May Screenings. Disney Media Distribution and Lionsgate will join as first presenting partners of the inaugural MIPDrama Pre-LA Screenings Showcase on Tuesday, 4 April, from 08.45-10.00am in the Grand Auditorium of the Palais des Festivals in Cannes.

    MIPTV, the world’s leading entertainment content market takes place in Cannes, France, 3-6 April 2017.

    The focus on new American series rounds out the second annual MIPDrama Screenings at MIPTV 2017. A spotlight on Latin America will take place on Monday April 3 and will include a first-look at top new dramas from Telefe, Azteca, Caracol, Telemundo, RCN and TV Record, among others.

    Together, these screening blocks offer more than 1,700 drama buyers attending MIPTV the opportunity to prepare their spring acquisition slate ahead of the LA Screenings.

    “We are delighted to showcase for the first time at MIPTV a sneak preview of dramas from the US studios prior to the LA Screenings. This will follow the MIPDrama Screenings Official Selection featuring new dramas from around the world, which will be viewed by top buyers on the Sunday before MIPTV,” commented MIPTV organiser Reed MIDEM director – TV division Laurine Garaude.

    Reed MIDEM is an organiser of professional, international markets that are essential business platforms for key players in the sectors concerned. Reed MIDEM is a division of Reed Exhibitions, the world’s leading event organiser, with over 500 events in 43 countries.

  • Viacom buys Telefe for US$ 345 million

    Viacom buys Telefe for US$ 345 million

    MUMBAI: Viacom Inc, the owner of Nickelodeon, MTV and Comedy Central, in an attempt to expand its Latin America footprint, has signed a deal to buy Argentina’s largest broadcast network Telefe from the telecom carrier Telefonica SA for US$ 345 million (Rs 2336 crore) in cash.Through a network of channels, Telefe reaches 95 per cent of Argentina’s households.

    The deal to purchase the Spanish-language content producer, that commands 33% Argentina’s TV audience share, is part of Viacom’s plan to upgrade its market in Argentina and Latin America.

    It is the first major announcement after Viacom’s new acting president and CEO Bob Bakish joined and it comes on Day 1 of his being elevated from his international distribution position. Viacom owns Cartoon Network and MTV among other channels.

    The buy, funded with cash from international operations, not adding to Viacom debt load, will be accretive to Viacom’s 2017 earnings.

    Operating eight regional channels throughout Argentina and streaming services , Telefe International, a pay TV service that is functional in 17 countries, also owns 12 production studios. Its content is distributed in 35 languages in 100 nations. It has close to 33,000 hours of content in its library, while churning out around 3,000 hours annually.

    Bakish said that Telefe was an outstanding broadcast and production business, and the acquisition would give a fillip to their growth strategy in Argentina. The buy brings Viacom significant resources that spread beyond the core broadcast network and beyond Argentina’s borders.

    In around 50 years, Viacom would become the first American company to operate a FTA (free-to-air) channel in Argentina.

    Sources indicate that some of the shows from its Spanish language could find traction on Viacom18’s English language Colors Infinity and as fiction and non-fiction formats on the local language channels it runs jointly with Reliance Industries in India.

  • Viacom buys Telefe for US$ 345 million

    Viacom buys Telefe for US$ 345 million

    MUMBAI: Viacom Inc, the owner of Nickelodeon, MTV and Comedy Central, in an attempt to expand its Latin America footprint, has signed a deal to buy Argentina’s largest broadcast network Telefe from the telecom carrier Telefonica SA for US$ 345 million (Rs 2336 crore) in cash.Through a network of channels, Telefe reaches 95 per cent of Argentina’s households.

    The deal to purchase the Spanish-language content producer, that commands 33% Argentina’s TV audience share, is part of Viacom’s plan to upgrade its market in Argentina and Latin America.

    It is the first major announcement after Viacom’s new acting president and CEO Bob Bakish joined and it comes on Day 1 of his being elevated from his international distribution position. Viacom owns Cartoon Network and MTV among other channels.

    The buy, funded with cash from international operations, not adding to Viacom debt load, will be accretive to Viacom’s 2017 earnings.

    Operating eight regional channels throughout Argentina and streaming services , Telefe International, a pay TV service that is functional in 17 countries, also owns 12 production studios. Its content is distributed in 35 languages in 100 nations. It has close to 33,000 hours of content in its library, while churning out around 3,000 hours annually.

    Bakish said that Telefe was an outstanding broadcast and production business, and the acquisition would give a fillip to their growth strategy in Argentina. The buy brings Viacom significant resources that spread beyond the core broadcast network and beyond Argentina’s borders.

    In around 50 years, Viacom would become the first American company to operate a FTA (free-to-air) channel in Argentina.

    Sources indicate that some of the shows from its Spanish language could find traction on Viacom18’s English language Colors Infinity and as fiction and non-fiction formats on the local language channels it runs jointly with Reliance Industries in India.

  • Mipcom attendance up by 9%

    Mipcom attendance up by 9%

    MUMBAI: The television trade event Mipcom which recently concluded in Cannes, France saw attendance of 15,900 people, about nine per cent more than last year.
    More programme buyers than ever jetted in for the event to take advantage of new media platforms. Reed Midem television director Paul Johnson has been quoted in media reports saying that buyers from China, the Middle East and India, in particular, showed healthy increases.

    There were 519 stands, an eight per cent increase, and 1,643 exhibiting companies, also an 8-percent growth rate. The number of exhibiting countries rose by five per cent, with new participants including Angola, Cambodia, Ghana, Kazakhstan, Macedonia and Sudan.

    A report in Worldscreen states that at Mipcom Junior, registered companies were up three per cent to 529, with 53 countries represented. Sellers were up two per cent to 315, but buyers were down two per cent to 460, because of Reed Midem’s new policy of charging a flat nominal fee for all buyers to participate in the kids’ programming event.

    The number of programmes presented rose by 12 percent to 937, and new programmes were up 22 percent to 562. Screenings on site rose by nine per cent to 42,848. The most screened program at Mipcom Junior was Aardman Animation’s Shaun the Sheep.

    A report put out by Prensario International states that at Mipcom there were attempts to push new ventures in all the regions, in addition to ancillary businesses such as home video, merchandising, mobile telephony and digital platforms. It is noticeable how these last two items are growing, from any given show to the next one. The technology is ready, but the business models are not yet fully developed. Digital transportation of content and High Definition are two more specialties that are gaining force; those who have HD content available were able to close deals that are out of reach for those who don’t. Regarding genres, there was a worldwide search for family and kid product, both live action and animated; programming about paranormal incidents is also intensely sought. At this Mipcom, Asia joined this trend with determination, states the report.

    Markets that were traditionally closed are now opening its doors. This adds investment in structures and alliances that allow farther reach. An example: the deal signed at the show by Korean Broadcasting System (KBS) and Venevision International (covering the US Hispanic market and Latin America) by which each ally will promote its partner’s product in its region.

    Everybody wants Latin content – The report notes that in this emerging landscape, the demand for Latin product is growing. Telenovelas are be the new trend, both in the US based networks and the largest Western Europe networks; this effect is contagious to other territories, even those where the genre was mature, giving it a new life. And the most important thing: both local production and finished product are creating synergy, against what was initially expected to happen. This is key to keeping the Latin industry in upbeat mood.

    That’s why the Mipcom organisation produced, once again, the Telenovela Screenings, on the Saturday and Sunday prior to the official opening of the show. For the first time the genre became the subject of two of the billboards at the Palais des Festivals entrance, taken by Dori Media Distribution. The screening had positive results.

    60 per cent more companies registered, 35 per cent more buyers attended and nine per cent more participating nations. 92 programmes were made available and 2,100 screenings were requested. On an average, the volume grew by 30 per cent compared to 2005. This is a significant increase, although the number of net participants remains focalized: 133 buyers vs. 99 last year.

    RCTV International sales head Jose Escalante, stressed that they helped to have more meetings during Mipcom instead of reducing their number, since buyers requested more information. Tepuy’s Accessory to Love was the most requested novela.

    The production of Latin formats has exploded -from MipTV to this Mipcom- in Romania, Russia and Portugal; each of these territories has currently five or six projects under development. This, on top of what is being seen in Germany, Spain, France and Italy. Televisa -both in entertainment and novelas-, Telefé, TV Azteca, Dori Media, RCN and Tepuy/TVN Chile appear as leaders of this trend; and, there are independent first moves, such as Argentine producer CTV’s, headed by actor Gabriel Corrado, who produces in Romania, and Chilean Feliú Group, which produces in Russia. In Eastern Europe, Romanian Mediapro Distribution is emerging in acquiring formats and producing.

    At the same time, the report notes that US networks are launching their first telenovelas, with promising results. If they become successful, the market will open fully. As a matter of fact, Fox had acquired at first three telenovelas for MyNewtorkTV, and now has rights to seven of them, predominantly from Colombian Caracol TV. Disney meanwhile is selling to the world its version of RCN’s Ugly Betty. Telenovelas are reaching the 18-34 target, which encourages investment.