Ad Growth Continues At Viacom

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New York--Coming off strong third-quarter domestic growth, Viacom CEO Philippe Dauman said that ad sales, up 8% in the period, should rise even higher in the fourth quarter.
Dauman, speaking here at the UBS Global Media & Communications Conference on Dec. 6, wouldn't say how much sales will rise, but added it would be an improvement over the previous quarter. Ad revenue also rose 4% in the second quarter and 1% in the first quarter.
Dauman said strong ratings are helping to drive results.
He added Viacom is gearing up for the next upfront ad presentations, adding that the media giant is gaining share in sectors that haven't been strong for it in the past - like automotive and financial services. Traditionally strong areas for Viacom networks - technology, media, toys and games - are all performing well, which fueled his optimism.
"I'm looking forward to the next upfront," Dauman said.
Dauman said that in addition to ad sales, affiliate fee revenue is expected to rise in the high single or low double digits for the foreseeable future. Viacom recently extended its carriage agreements with several distributors.
"Because of the brands we represent we are in a very strong position, Dauman said. "We've successfully negotiated extensions of our affiliate deals over the last two-to two-and-a-half years at a very difficult time in the economy, and we have been very successful in maintaining the double-digit rates of increase, because we provide great value, "...We are not the big part of their content costs - the sports part of their portfolio is much more expensive to them than we are... We think by being focused we can enter a lot more relationships without having a conflict."
Dauman also offered updates on Viacom' Epix premium channel partnership, adding that it was profitable in its first year. He added that the network has already served its first purpose -- providing a means to monetize the pay window for its Paramount Studios output.
Dauman added that while several other studios have explored accelerated pay-per-view windows, Viacom will not.
Several distributors - including Time Warner Cable and DirecTV - have said they are talking to studios to offer certain films as soon as four weeks after their box office runs for retail prices of between $20 and $30 per title. While no studio has actually done a deal yet, some distributors believe there is a strong enough demand for the service. Theater owners have predictably come out against the practice.
"We're currently not working on an earlier premium window," Dauman said. "Some studios are looking at it. Right now we want to satisfy our theater distributors. Obviously there has been some movement in DVD windows and the like, but right now we are not looking at a premium window."

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