Earnings: VIA: Digital Revenue Up 85 Percent


Viacom is well on its way to beating plans for $500 million in digital ad revenue within three years, CEO Tom Freston told analysts on the 1Q06 earnings call. More from the call (transcript):
Digital Revenues: CFO Mike Dolan: “Digital ad revenues, which are still small as a percentage of total domestic ad sales, grew rapidly, up 109% quarter over quarter. Total digital revenues including transactional revenues were up 85%.” Later in the call, CEO Tom Freston said the company is getting “two to three times” the TV CPM for its broadband video ads.
Europe: MTV Overdrive wil launch in Germany “in coming weeks” and there’s been “strong advertising interest” in the recently launched UK version. Freston: “These launches make possible a multi-platform advertising offering in these countries and mark an important step in executing our digital strategy in our top two markets outside the U.S.”
MTV Networks: More than 33 million digital streams delivered in March on MTV Overdrive and 33 million unique visitors at MTV.com. Freston: “Online ad revenue more than doubled from Q1 ’05. The user base across almost all of our sites have increased at double-digit rates over the last quarter and users are becoming much more engaged with streaming growth outpacing user growth. In the quarter our cable branded broadband site served over 180 million video streams just in the United States.”
Wireless broadband: Freston: “There’s a potential for added distribution revenue through broadband wireless channels, some of which we’re already capitalizing on and others we’re only now starting to think about. The revenue models we’re exploring include both affiliate fees as well as download fees.”
: Freston: “… there’s virtually now almost no advertising proposition that goes out there without the integration of some type of multi-platform opportunity for our advertisers.” Asked if there was concern over cannabilzation ad dollars from TV for broadband, Freston said they aren’t seeing that. “We’ve seen big increases in our digital revenue commensurate with increases in our television revenue as well.” He expects digital to be about 5-8 percent of the upfront.
Xfire: Freston said the company is looking at the recent acquisition as “a great growth vehicle.” It’s current growth rate is 8-10 percent a month. A quarter of its 4 million users are on Xfire 91 hours a month.
iTunes: More than 4 million downloads since January launch.
: Freston avoided a direct question about why Viacom passed on Facebook. He reiterated, as we’ve written here before, that the company expects to use several diferent social network platforms, including Xfire.

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