Viacom, Inc. (NASDAQ:VIA) (NASDAQ:VIAB) reported a 7 percent drop in earnings for the third quarter, with disappointing performance from the media networks and filmed entertainment divisions.
It reported a profit of $534 million against $574 million a year earlier. Revenue for the period dropped 14% to $3.24 billion. Revenue for TV-networks division fell 5% to $2.27 billion, while Advertising revenue reported a 7 percent decline domestically and 9 percent world-wide. The company’s affiliate fees from cable and satellite operators reduced by 1 percent, and were inflated due to digital licensing deal in the quarter.
Fewer films released by company’s Paramount studio last quarter contributed immensely to 29% fall in revenues to $1.01 billion for Filmed-entertainment division. Despite fall in revenues, Viacom said it will continue with its plan of share buybacks and expects to buyback $2.8 billion shares till September this year.
Viacom, Inc. (NASDAQ:VIA) (NASDAQ:VIAB) is not the only company in the industry with problems of slow growth; the same case is for entire media-industry, struggling to remain relevant in the 21st century as it was in the late 20th century.
Viacom’s signature channel MTV, no longer holds the command it had, when it was launched in 1980. The same case is for its once-popular Nickelodeon channel, which is also experiencing steep decline in viewership. According to analysts, lack of new programs and moving some of the channel’s shows on Netflix, Inc. (NASDAQ:NFLX) digital service, could have been the reasons for the decline in ratings for Nickelodeon. It’s not that the company is not trying; numerous new programs have been introduced in recent months with 14 projects more in pipeline. Forecasting on the improvement of the Nickelodeon’s rating, Chief Executive Philippe Dauman said, “The network is beginning to show momentum,” he said. “I certainly expect to see year-on-year ratings improve.” He was also hopeful that recent improvement in advertising market would help Nickelodeon to improve on ratings.
Just last month only, ending the blackout, Viacom and DIRECTV (NASDAQ:DTV) settled their dispute over affiliate fee increases. According to Viacom, Inc. (NASDAQ:VIA) (NASDAQ:VIAB) the blackout would hurt its domestic advertising revenue growth by 1.5 percentage points.