Below are my key takeaways from the Viacom Q3 2016 Earnings Call on Aug 4:
Summary:
Philippe Dauman, CEO, said “Viacom continues to focus on making progress against our strategic plan.”
Revenue for the third quarter of fiscal 2016 was up 1.6% to $3,107MM, but Operating Income fell 29.1% to $769, due to programming costs and declines in ad revenues.
Signed long term carriage agreements with Cox and Dish , both with solid rate increases. The deal with Dish will see various Viacom channels, such as MTV, Comedy Central and BET, appear on Dish’s Sling TV streaming service.
Unveiled Viacom Vantage, a data-driven ad product that enables advertisers to reach their custom targets at the program level across the Viacom Media Networks portfolio. Will triple the number of Vantage deals to 35-40.
In Film, Teenage Mutant Ninja Turtles: Out of the Shadows underperformed with a $236MM global take on a $135MM budget. (Source: BoxOfficeMojo) Star Trek Beyond has already brought in $172MM globally, on a $185 budget, with more territory launches coming (Source: BoxOfficeMojo).
In Home Entertainment releases, Zoolander 2, and 10 Cloverfield Lane were made available in the quarter. Michael Bay’s 13 Hours: The Secret Soldiers of Benghazi is seeing a huge spike in sales, up to an astonishing $40MM so far (seeing it only grossed $70MM WW in theaters), thanks in part to the upcoming presidential election.
| Financials (In millions) | Q3 2016 | Q3 2015 | % Diff |
| Total Revenue | $3,107 | $3,058 | 1.6% |
| – Media Networks | $2,513 | $2,597 | -3.2% |
| —Advertising | $1,216 | $1,223 | -0.6% |
| —Affiliate Fees | $1,148 | $1,244 | -7.7% |
| —Ancillary | $149 | $130 | 14.6% |
| – Filmed Entertainment | $621 | $479 | 29.6% |
| —Theatrical | $91 | $20 | 355.0% |
| —Home Entertainment | $192 | $199 | -3.5% |
| —License Fees | $297 | $214 | 38.8% |
| —Ancillary | $41 | $46 | -10.9% |
| Total Operating Income | $769 | $1,084 | -29.1% |
| Total Net Earnings | $432 | $591 | -26.9% |
| Diluted EPS | $1.09 | $1.47 | -25.9% |
Viewer Metrics:
- Worldwide Cumulative: 3,800MM
- US and Canada: 1,500MM
- Europe: 1,200MM
- Middle East, Africa, Asia Pacific: 832MM
- Latin America: 228MM
- VH1: among viewers 2+ had the biggest gains, +33%, among the top 30 non-news networks in the quarter
- Love and Hip Hop Atlanta was #1 reality show on cable
- Hip Hop Honors premiered in July to 3MM viewers
- Nick Jr.: had the largest YoY gain of any network
- Nickelodeon: ratings increased 6% in quarter and extended lead among kids 2-11 for 52 straight weeks, +20% over #2 ranked network,
- Henry Danger is tops for kids 2-11 and 6-11, avg. 2.4MM total viewers per episode
- Comedy Central: up YoY in ratings
- BET: BET Awards show was top awards show on cable for A18-49, 2nd year in a row
List of Key Properties:
Forward Thinking:
- In August, Paramount will premiere the Meryl Streep film Florence Foster Jenkins and the big budget Ben-Hur, which is tracking poorly, but then hopefully Jack Reacher: Never Go Back will right the ship in October
- On Aug 1, will re-launch VH1 Classic as MTV Classic
- Comedy Central will premiere a new season of Drunk History and Roast of Rob Lowe, along with the 20th season of South Park
Links to Company Website:
- Q3 2016 Earnings Call Webcast
- Q3 2016 Press Release
- Q3 2016 Earnings Presentation
- Q3 2015 Trending Schedules
Please comment below if there are data points from Viacom you’d like me to include in their next Earnings Call Summary.
