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Viacom Q1 revenue down 6% at $3.1 bn

MUMBAI: US media conglomerate Viacom has announced that revenues for a difficult first quarter have fallen by six per cent to $3.1 billion.

Operating income fell by a steeper 10 per cent to $839 million. Adjusted operating income saw an even further fall to the tune of 13 per cent.

Net earnings also fell by 10 per cent to $449 million. Similarly adjusted net earnings attributable to Viacom fell by 13 per cent to $470 million. The film business saw a revenue fall of 15 per cent.

Viacom executive chairman, president, CEO Philippe Dauman said, “As the media industry continues to evolve quickly, Viacom is generating sustainable opportunities using great new content, innovative technology, marketing and data applications, along with the benefits of our substantial footprint in key international growth markets. Our investments in new content have led to higher ratings at most of our networks, including VH1, Spike, Bet, TV Land, CMT and Nick at Nite, as well as Nickelodeon, which recaptured its lead as the top network for kids 2 to 11. In addition, we saw significant sequential improvement in domestic advertising sales, due to the success of our new programming and our highly-desirable new advertising products. Paramount is off to a strong start in 2016, with a promising and diverse film lineup throughout the year, and our Paramount Television unit is also thriving.

“2015 was a challenging year operationally as we redesigned ourselves and adapted to significant industry disruption. Our first fiscal quarter of 2016 reflected these challenges. However, our revitalized organization and our investments in content, technology and strategic innovation are now beginning to bear fruit. Although our industry continues to face headwinds, we expect our positive momentum to continue and build throughout the year.”

Media Networks: Media networks revenues declined by three per cent to $2.57 billion. Absent an unfavourable one per cent impact of foreign exchange, media networks revenues decreased by two per cent. US ad revenues declined by four per cent, as pricing increases were more than offset by a decline in traditional ratings at some of the networks. Worldwide ad revenues decreased by three per cent, reflecting an unfavourable one per cent impact of foreign exchange. International advertising revenues declined by two per cent, driven by an eight per cent adverse effect of foreign exchange. Absent the impact of foreign exchange, international ad revenues increased by six per cent, driven principally by growth in Europe.

US affiliate revenues were substantially flat due to the impact from the timing of product available under certain distribution agreements. International affiliate revenues decreased by six per cent, driven by a nine per cent unfavourable impact of foreign exchange. Absent the impact of foreign exchange, international affiliate revenues increased by three per cent.

Film: Film revenues decreased by 15 per cent to $612 million, as an increase in license fees was more than offset by declines in theatrical and home entertainment revenues.

Excluding foreign exchange, which had a three per cent unfavourable impact, worldwide revenues declined by 12 per cent. Worldwide theatrical revenues decreased $75 million in the quarter, as carryover revenues decreased $46 million, principally due to an unfavourable comparison with the strong performance of ‘Teenage Mutant Ninja Turtles’ in the first fiscal quarter of 2015. Worldwide home entertainment revenues decreased $77 million in the quarter, primarily reflecting a comparison with carryover revenues from ‘Transformers: Age of Extinction’ in the first quarter of 2015.

License fees increased by 25 per cent, to $237 million in the quarter, primarily driven by the licensing of certain titles for subscription video-on-demand services and television. Its movie ‘The Big Short’ might win the best picture Oscar.