Dauman Sees Q3 Ad Sales Rise For Viacom9/23/2010 3:52 PM Eastern
Viacom CEO Philippe Dauman said that domestic advertising sales are expected to rise more than 4% in the third quarter and that the momentum should continue into the rest of the year.
Viacom had lagged behind its cable network peers regarding domestic ad sales growth in the past two quarters - U.S. ad sales rose 1% in the first quarter and 4% in the second quarter, compared to 13% second quarter growth at Discovery Communications.
While he wouldn't pinpoint just how much ad sales will rise, Dauman, speaking at the Goldman Sachs Communacopia conference in New York, said that the third quarter will be better.
Viacom's cable networks include MTV, BET, Comedy Central, TV Land and Nickelodeon.
"The third quarter will be higher than 4%," Dauman said referring to domestic ad sales growth. He added that the following three-month period is expected to be even higher than that.
Fueling that growth is greater demand for advertising, a strong scatter market and new advertisers coming into the Viacom fold. For example, Dauman said at MTV's recent Video Music Awards programs, companies like American Express and several automakers bought ad time for the show that have never advertised on MTV before.
"The demand is out there," Dauman said.
Dauman was also encouraged by Viacom's Epix premium channel partnership, adding that its recent Netflix agreement follows its strategy of seeking new profitable distribution paths for its content. While Dauman wouldn't reveal how much Netflix will pay for Epix output - the five-year deal has been reported to be worth nearly $1 billion - he said it is a material amount that compares very favorably to traditional services.
Dauman said that it is unlikely that Viacom networks will contribute content to Apple TV, adding that the 99-cent price point does not reflect the value of his content. He added that Viacom is following developments at Hulu and is in tests with several distributors (cable, satellite and telco) with TV Everywhere. With TV Everywhere, Dauman said that questions remain regarding the user interface and whether the service will be measured by a ratings company like Nielsen to allow the networks to monetize the content.
"We're working with the players there. Once all those things get figured out, it can be a valuable service for consumers and should be good for us," Dauman said.