Chicago— Viacom Inc. chairman and CEO Sumner Redstone reiterated that his company has no desire to buy distribution, and added that the strength of its brands prohibit any need for it to own DirecTV Inc. or other additional outlets, à la AOL Time Warner Inc.
Redstone, speaking at the Multichannel News International
Summit here June 10, said that although distribution is important — Viacom owns No. 1 broadcast-TV network CBS and the largest video-rental outlet in Blockbuster Entertainment Inc. — he doesn't feel the need to own additional channels to protect his programming assets.
"When push comes to shove, people watch what's on it [distribution]," Redstone said in a brief interview after his acceptance speech. "While there is a potential for an adversarial relationship between distributors and programmers, our brands are so powerful, nobody [can] afford to ignore the consumer that wants to see MTV."
For his contributions to the international-television industry, Redstone received MNI's Grand Prix Ground Breaker Award at the luncheon.
Although analysts have praised AOL Time Warner for its powerful mix of content and distribution assets, Redstone squashed any speculation that Viacom may try to do the same in cable distribution or satellite.
"We're not going to go back into the cable [distribution] business," Redstone said. "And we're not interested in buying anything we can only buy 30 [percent] to 40 percent of. We will not do a deal, unless it is immediately accretive."
Redstone was referring to News Corp.'s attempt to buy General Motors Corp.'s 30 percent stake in Hughes Electronics Corp., the parent of DirecTV.
Redstone said that Viacom will increase its focus on the international market, hoping to expand international sales from the current 18 percent of total revenue to 40 percent. Although he said that international revenue is still small compared to the United States — MTV: Music Television, for example, has about $1 billion in U.S. revenue, but only $70 million overseas — that could soon change dramatically.
"We are just beginning to realize the rewards of 14 years of work," Redstone said. "We grew 60 percent last year. The growth opportunities are unlimited overseas."
Redstone said that Viacom properties in Asia, Europe and Japan have all experienced exponential growth, most notably with MTV, which offers Western music videos along with a large portion of home-grown talent.