Viacom Reports Strong 4Q

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Viacom reported strong revenue and operating income growth for the fourth quarter, primarily driven by gains at its cable networks like MTV, Comedy Central and Nickelodeon.

Revenue increased 19% in the quarter to $4.5 billion while adjusted operating income rose 18% in the period to $978 million. At its Media Networks division, which includes the MTV Networks and BET Networks cable channels, revenue rose 18% to $2.4 billion and adjusted operating income increased 15% to $915.5 million.

Viacom said worldwide advertising revenue for the unit was up 9% to $1.39 billion. Domestic advertising revenue rose 5% in the period.

On a conference call with analysts, Viacom CEO Philippe Dauman said that the advertising market has been strong, adding that fourth quarter scatter pricing for Viacom networks is averaging double-digit pricing increases over the upfronts.

Dauman hinted that strong ratings at several networks will lead to higher affiliate fees from cable, satellite TV and telephone companies as carriage deals come up for renewal, and singled out one network in particular – Comedy Central.

“Comedy Central is a much more powerful brand and a much more successful network with a lot of great franchises than it was many years ago when many of the current affiliation agreements were entered into,” Dauman said. “As we go forward we expect to have a constructive dialog with our partners – both cable, satellite and telcos – about the value that we bring to them and their consumers and we expect to get nice rate increases. That’s true of our overall portfolio brands. We have 25% of ad-supported cable viewing and a much lower percentage of affiliate revenues. We expect to see that grow and at the same time we will be providing good value through cooperation with VOD, on broadband and other initiatives, high-definition, with our customers.”

Dauman did not elaborate on the timing of when those deals may be up for renewal. However, the media giant last renewed deals for MTV Networks – which includes Comedy Central – in 2003 and 2004 with several multichannel operators, including Comcast, DirecTV and Mediacom Communications.

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