Use access key #2 to skip to page content.
$15.94 -0.07 (-0.44%)
12/4/2008 11:13 AM

Viacom, Inc. (VIA)

CAPS Rating:
***

A global entertainment content company with operation in Media Networks, which includes MTV Networks and BET Networks; and Filmed Entertainment, which includes Paramount Pictures Corporation and Famous Music.

View All Commentary (VIA)

Recs

3

Avatar NetscribeMedia (22.29) Submitted: 1/15/07 7:19 AM : Outperform Start Price: $41.80 VIA Score: -23.07

Viacom, operates in two segments namely Cable Networks and Entertainment. Its leading brands are MTV Networks: MTV: Music Television, VH1, Nickelodeon, Nick at Nite, Comedy Central, Country Music Television, Spike TV, TV Land, Logo, Paramount and Famous Music. Cable networks segment accounts for around 66% to 70% of revenues.

Revenues have witnessed a 14% increase in the first nine months of 2006 due to increase in advertising revenues and affiliate fees. Despite a soft advertising environment domestic advertising revenues were up 7%. Digital advertising revenues have also increased and the company has appointed a new Head of Digital at MTV Networks which means that they are eyeing the online advertising market which is slated to reach $51.6 billion by 2010.

Viacom joins an array of other companies which has beefed up its online operations. The Viacom portfolio was accessed by 37 million visitors in September alone. Viacom has also acquired Quizilla, an online community which could well be their answer to News Corp’s MySpace and Google’s Youtube.com. The acquisitions of Atom Entertainment and Harmonix will also help spruce up the online operations. Nickelodeon has TurboNick 2.0 and Parents Connect an online community targeted at parents while Initiatives are being undertaken at Paramount to put up its film libraries online.

In the entertainment segment the acquisition of Dreamworks has contributed significantly to revenues. The releases of Shrek 3 and Beowulf will improve theatrical revenues in 2007 while in the home entertainment section, the DVD releases of South Park will boost revenues. With the number of DVD households in USA expected to reach 94% by 2010, the home entertainment segment which contributes around 40 to 45% of revenues in the entertainment segment, will have a good year ahead. The company is also looking at adding television production back at Paramount, all of which means that it will have a smooth ride this year.

Report this Post Replies: 1 | Reply | Permalink

Avatar NetscribeMedia (22.29) Submitted: 4/20/07 6:32 AM

Recs: 0 | Rec This

The internet advertising market is expected to reach $51.6 billion by 2010. Large diversified media companies are well positioned to take full advantage of this lucrative market. Recently, Viacom entered into a multi year deal with Yahoo which gives the latter exclusive rights to display search and content- related text ads on 33 Viacom web sites. MTV.com, VH1.com, Nickelodeon.com, Comedycentral.com and BET.com are some of the popular brands among these web sites. Viacom is targeting 2007 digital revenues of $500 million. This deal will help them near that target.

Viacom’s 2006 revenues increased 19% year-over-year to $11.4 billion. Viacom’s goal is to realize low double-digit annual growth in earnings per share over the next three years. Viacom has also announced a restructuring program at Viacom International, which is projected to help them realize a margin improvement in their international operations of between 1,000 to 1,500 basis points by 2008.

Dreamworks April theatrical release, Disturbia raked in $23 million in its first weekend at the box office. This was after Blades of Glory spent two weeks in the number one slot. Shrek the Third, Hot Rod, The Transformers, Beowulf and Stardust are some of the exciting movies lined up for the summer. The DVD release of Dreamgirls will bolster revenues in the second half of the year.

Viacom has beefed up its internet activities by building a stable of digital properties. The company is also acquiring small companies and entering into new partnerships. Viacom has launched Nicktropolis, a new multimedia community for kids. Viacom’s relationship with iTunes has been extremely fruitful. Customers downloaded 11 million episodes of MTV programming in 2006 alone. Viacom had earlier filed a $1 billion lawsuit against Google for copyright infringement. Consequently, Viacom’s partnership with Yahoo is a direct challenge to Google. This indicates that Viacom will not shy away from the competition, making it a healthy investment.

Report this Post Reply

Featured Broker Partners

Sponsored Links