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Viacom: Nick Issue ‘Complicated,’ but We’ll Do Better

5/07/2012 12:01 AM Eastern

Viacom CEO Philippe Dauman
tried to put a better face on passable first-quarter
results, reiterating that the media giant is
determined to regain its position among the
elite cable programmers.

Viacom has taken it on the chin for the past
several quarters as Nickelodeon, its flagship
kids’ network, has lost viewership to the Disney
Channel. Its MTV network has also been
hit hard, with ratings declining about 19% in
the first quarter.

While Dauman has in the past blamed
the drop off in Nick viewers to a Nielsen ratings
glitch, he admitted in an earnings call
with analysts last week that more compelling
shows from the competition could have also
played a role.

Dauman said Viacom will correct its ratings
issues as it has in the past, by stepping up audience
research to determine viewers’ tastes,
creating new programming to meet those audience
needs and tastes, and effectively marketing
and promoting its shows.

“We’ve seen this level of ratings impact on
some other major networks in the past, and
we’ve overcome it,” Dauman said. “The Nick
issue is complicated. There are some measurement
issues; there certainly has been some
compelling programming which exists on
some of our competitors, which we can clearly
address.”

“Nickelodeon is stepping up to the plate in a
major way with the creative community, with
its own programming teams,” Dauman added.
“Our marketing partners are very pleased
with what they’re seeing.

While it continues to address the ratings
issues, Viacom struggled with a sluggish ad
market. Ad sales at the media giant rose just
1% for the period. That was considerably less
than for its peers — Scripps Networks grew ad
sales 10% in the period, and Time Warner Inc.
increased advertising revenue by 6%. Even
tiny Crown Media, parent of Hallmark Channel,
boosted ad revenue by 15% in the March
quarter.

Dauman also fought off speculation that
the main culprit in Viacom’s Nickelodeon
woes is its streaming agreement with Netflix.
An April 30 report by Sanford Bernstein analyst
Todd Juenger claimed that Netflix has
eroded Nick’s viewership (“Netflix Puts Skids
on Kids’ Nets: Analyst,” April 30, 2012).

Dauman said on a conference call with analysts
to discuss quarterly results last Thursday
(May 3) that Netflix represents less than
one-fourth of total television households, and
that time spent streaming Nickelodeon content
via Netflix is about 2% of the time spent
watching the Nick linear channel.

September