Softer sales of signature videogame 'Rock Band' socked Viacom.
Dauman
Viacom’s profit tumbled 34% last quarter, but chief executive Philippe Dauman sees some light on the horizon for one of the nation’s worst-ever economic downturns.
“We have seen signs in the last several weeks that the economy might be stabilizing,” he said on a conference call Thursday. “We’re feeling considerably better than we felt two to three months ago as we enter this important upfront season.”
Also on the call, chairman Sumner Redstone noted “substantial preliminary interest” in a group of movie theaters his family holding company National Amusements has put up for sale. He said he’s pleased by the number of bidders and the prices being discussed.
Viacom’s net income fell to $177 million from $270 million in the quarter.
Revenue dipped 7% to $2.9 billion, hit in part by unfavorable foreign exchange rates as the dollar strengthened against European currencies.
At Paramount, filmed entertainment losses widened sharply to $123 million from $63 million. Revenue fell 5% to about $1.1 billion.
Folks flocking to movie theaters in record numbers led a 15% jump in theatrical revenue, offset by a 9% decline in home entertainment sales. Dips in homevid revenue are bedeviling much of Hollywood.
The studio also had higher P&A costs in the first quarter from a year ago ahead of the March 27 release of DreamWorks Animation’s “Monsters vs. Aliens.”
Par is gearing up for two tentpole releases in the current quarter, “Lost” creator J.J. Abrams’ “Star Trek” and Michael Bay’s “Transformers: Revenge of the Fallen.”
Media networks profit dropped 9% to $629 million. Revenue fell 8% at $1.9 billion.
The advertising market remained rocky. And, with Americans strapped for cash, sales of consumer products plunged 37%, led by softer sales of videogame “Rock Band.”
Domestic ad revenue fell 9%. Worldwide revenue was down 11%.
Affiliate revenue rose 13% worldwide.
Television license fees fell 9% on the number and mix of available titles.
Viacom said foreign exchange had a 2 percentage point negative impact on media networks revenue and a 7 percentage point impact on filmed entertainment.
Viacom’s cable networks include MTV, VH1, Nickelodeon, Comedy Central, BET and Spike TV. Several have been struggling but are looking up.
“MTV is reinventing itself this time to speak to and connect with the millennial generation,” Dauman said. And “VH1 is back.”
He said ratings are also up at BET, which is launching a spinoff channel called Centric in the fourth quarter.
Dauman said advertisers, with little visibility on their own businesses, are still wary. But certain categories remain healthy, like wireless, fast food restaurants and budget retailers.
In automotive, “We are seeing some of the foreign automakers and lately one domestic company coming back pretty strongly.”
He said the company is getting strong commitments from the kids upfront that started several weeks ago. “We’re seeing advertisers increase their spending in a few important cases.”
Epix, a movie channel created by Viacom, MGM and Lionsgate, is on track to launch in October, he said.
Costs fell by $87 million, including $50 million in savings from a restructuring late last year. The company expects to realize $200 million in cost savings throughout the year.
Contact Jill Goldsmith at
jill.goldsmith@variety.com