Viacom Inc. the New York entertainment company that has struggled while its youthful audiences migrate to non-traditional forms of media, suggested it may have found a way to push back.
The owner of MTV, Nickelodeon, Comedy Central and the Paramount movie studio saw a rise in its fiscal third-quarter profit, the company said Thursday, notching increases in advertising and distribution revenue at its cable networks and better performance at its film operations due to the performance of the recent release of “Transformers: The Last Knight.”
Net income attributable to Viacom rose to $680 million, or $1.69 per share, compared with $432 million, or $1.09 per share – marking a rise of 58% compared with the year-earlier period if including $285 million from the sale of the company’s interest in the Epix pay-cable service. Excluding one-time items, profit rose 12% to $471 million. Revenue rose 8.3%, to $3.36 billion.
Revenue at the company’s media networks rose 2% to $2.56 billion. Affiliate revenues increased 4% to $1.19 billion, while and advertising revenues rose 2% to $1.24 billion. The company said domestic revenues were substantially flat at $2.04 billion, while international revenues increased 8% to $522 million.e.
Affiliate revenues in the U.S. increased 4% to $1.01 billion, due largely to higher revenues from SVOD and other OTT agreements, as well as rate increases. Those were partially offset by a decline in subscribers. International affiliate revenues increased 1% to $178 million.
U.S. advertising revenues fell 2% to $955 million, despite price increases, which were offset by lower impressions. International advertising revenues grew 14% to $280 million in the quarter. Wade Davis, Viacom’s chief financial officer said during a conference call Thursday that Viacom had cut back on the number of ads it ran at some of its networks. Excluding results from that decision, domestic ad sales, he said, would have increased 1% during the quarter.
At Viacom’s filmed-entertainment operations, revenue grew 36% to $847 million. U.S. revenues rose 19% to $388 million in the quarter, while international revenues increased 56% to $459 million. Theatrical revenue rose $189 million to $263 million, driven largely by the latest chapter in the “Transformers” saga.
Viacom CEO Bob Bakish said the company was monitoring consumer behavior around subscriptions to cable and satellite providers, and was eager to stay current with consumers who sought other choices. “The ship has sailed on everyone having a $100 bundle,” Bakish said, noting that many consumers wanted a lower price options – maybe even under $40. “Low-priced entertainment packets will become a reality.”
Bakish also said Viacom was continuing to negotiate with Charter Communications, which earlier this year placed Viacom’s networks on a higher-priced tier of programming. When asked if Viacom might sue Charter over the matter, Bakish said “I really don’t fundamentally believe suing a big customer is the way to solve problems. A better way to solve is through engagement and exploring ways we can create value together. That’s what we are focused on.”