Updated to include earnings call: Given the spate of reports, we may have to declare this Viacom Tuesday. In what likely will be the last earnings report before the company splits, Viacom turned in $1.4 billion in operating income, up five percent over 3Q04, on $5.9 billion in revenue, up 10 percent, aided by revenue growth in nearly every major segment. The company earned 47 cents a share on continuing operations, up 12 percent from 42 cents per share the previous year.
Despite the emphasis on broadband and the like at MTV and the creation of CBS Digital, Viacom still doesn’t break out any numbers about new media operations, suggesting the operations aren’t yet brining enough to the bottom line to be considered material. At least, online is now included in the boilerplate description. More after I listen to the call.
From the earnings call: Co-president Tom Freston’s presentation about multiplatform strategy starts about 15 minutes in. Already this year MTV Networks has launched broadband channels for nearly every one of its major networks. “All these broadband networks will be great businesses for us going forward as the web continues to move from text to video … they are high CPM businesses and they allow us to really leverage our video production skills and our libraries online.” Freston said the broadband nets are a “three-part success story” with “great reviews,” an advertising “home run” with business three times the TV CPMs and consistently growing usage.
– Freston says by the end of ’05, MTVN expects to have 50 wireless deals covering 750 million users worldwide.
Co-President Leslie Moonves calls it “digital strategy” … “Our ability to continue to add revenue streams is a significant and underappreciated
opportunity for us. CBSNews.com is a perfect example — by using our existing news staff to manage our online news flow… minimizing additional costs while maximizing new dollars. CBS SportsLine is another model we want to replicate, creating new revenue streams by dominating emerging categories.
Moonves spoke of the CBS Digital push to tap “every single new area of revenue potential from our our brands, from blogging to Apple iTunes (and) podcasting.”
– Sure to be seen as telegraphing a deal like the $500 million acquisition of CSTV reportedly in the works, Moonves promised “important deals … in the near future.”
– During Q-and-A, Freston said, “the lion’s share of our incremental spending is going into these digital businesses and these are businesses where we see huge growth rates.” MTVN’s digital advertising revenue is up more than 50 percent year to year. He also said the digital businesses have “very small margins.”
You can download the audio here. (9.7 Megs, 50 56 min.)
Earnings release Webcast | WSJ (sub. req.) | Transcript (sub. req.) TheStreet.com
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