Dauman touts growth; sez DWA relations 'very good'
Viacom CEO Philippe Dauman is the latest showbiz CEO to paint a rosy picture of how Hollywood is benefitting from the vigorous competition for digital content rights among Netflix, Amazon and other emerging players.Viacom’s third-quarter earnings report cited a big gain in digital revenues. Pressed for details during the Friday conference call with Wall Streeters, Dauman and chief operating officer Thomas Dooley asserted that the digital coin was not a one-time influx but the fruits of a growing market fueled by demand for content from well-heeled Netcos. In the earnings report that generally exceeded the Street’s expectations, Viacom logged a $26 million year-over-year gain in ancillary revenue, rising to $72 million, which the company said “principally reflect(s) higher digital revenues.” “It is a significant amount of money that will come in over the next several years,” Dooley said. “And this is not the only part of it. It will be significant in every year and into the future.” Viacom’s digital haul echoed the emphasis on digital licensing opportunities emphasized last week by CBS Corp., the other half of Sumner Redstone’s empire (Daily Variety, Aug. 3). Dauman noted that the demand for content rights was accelerating not only in the U.S. but also in Europe and Latin America and, to a lesser extent, Asia. He caught investors’ attention by noting that the deals Viacom has recently inked offer profit margins “in excess of 75%.” And there are more pacts to come. “We are in a number of discussions right now,” Dauman said. “So that gives us the runway to be able to say that we expect, on this higher pace we set this year, to continue to grow in high single-digits, if not double-digit rates, every year for the foreseeable future.” Overall for the quarter ended June 30, Viacom registered year-over-year gains with revenue climbing 15% to $3.77 billion and net earnings up 37% to $574 million. Much of the gains came from a 14% worldwide increase in ad sales for MTV Networks’ cablers and a strong perf in home entertainment from such releases as “True Grit,” “Justin Bieber: Never Say Never” and “No Strings Attached.” Paramount Pictures faced tough comparisons to the year-ago period that included the releases of “Iron Man 2” and “Shrek Forever After.” This summer, “Transformers: Dark Side of the Moon” has been a worldwide B.O. juggernaut but was not released until the last week of Viacom’s fiscal Q3. Dauman tried to dampen the hubbub in recent weeks about the probable end of its distribution partnership with DreamWorks Animation next year. Talk of a big rift between the companies was spurred by Par’s announcement last month that it would launch its own feature animation unit to leverage the value of Nickelodeon’s kidvid properties, with the first release targeted for 2014. Dauman also noted that Par has three more DWA pics to release under its existing pact, including “Puss in Boots” this year. “The notion (that) there’s been any kind of friction in connection with distribution of the films under this arrangement is fantasy because the relationship is very good,” Dauman said. “The only issue is what DreamWorks Animation wants to do strategically … and how that fits in with our own strategic objectives.” Viacom’s solid earnings helped the stock recover a little of the ground lost in Thursday’s market slide. Shares were up 83¢ at the close of trading Friday to $44.93, after dropping 6% the previous day.