Earnings: Viacom Call: Ad Revs Up 8 Percent; $100 Million Max Investment In JV; Social Media Deals?

Quarters like this only increase Sumner Redstone’s love for Viacom (NYSE: VIA) CEO Philippe Dauman: “It’s always great to start the day off with great news… I constantly think what a wise decision it was to ask Philippe to join Viacom as CEO and Tom as CFO.” Meanwhile, Dauman must’ve figured that he couldn’t spend the whole call talking about video games, so after a quick run down of the numbers, he’s talking up strong ratings across the company’s cable business: record ratings for shows like The Hills, as well as networks like VH1, Comedy Central, and Spike. He’s also talking up how Viacom’s parlayed its hit brands into strong digital traffic. Overall, ad revenue was up 8 percent at the media business, although for the most part, he’s just talking about ratings rather than dollars. Later, CFO Tom Dooley said that ex-currency effects, ad growth came to 7 percent, the same growth rate as its domestic ads.

Rock Band: “This is a major new brand and we have to nurture it and grow it the same way we do our television franchises.” The game will be launching in Europe this month and for the Wii this summer.

New pay TV network: “We will control our own destiny… we are exploring multiple distribution platforms and partnerships that also contemplate emerging content delivery.” Dauman promised that the network would have fresh announcements in the coming weeks. As for how much cash the company expects to pay out for this venture, Dooley: “Over the life of the venture, we don’t expect it to be more then $100 million.”

Q&A:

Digital: Dauman was asked whether he could break out overall digital revenue, and give some suggestion of what margins could be expected from them. He didn’t take the bait and responded with what might be called corporate speak: “Really, we create a virtuous cycle effect in what we do… it’s becoming increasingly difficult to separate the digital component from the on-air component, in that a high percentage of our ad sales are integrated… it would be somewhat misleading to break it out.”

Pay TV: “We are the lead investor, but we will not be the majority owner. The JV was established to better serve consumers and better monetize the pay window.”

Next quarter: Ad revs expected to be about 7 percent up in the second quarter, equivalent to what it was in Q1.

Music social networking: An analyst asked how Viacom was playing in the music social networking space, against companies like Last.fm and MySpace Music. Dauman denied that the company is behind in this area: “You’re quite right, it is a core part of our content. We have made tremendous strides, about which we are very pleased” He mentioned the Flux platform and various virtual worlds, and said there were online plans for the Rock Band franchise. “We have the opportunity to reinvent how music is enjoyed, and you will see us grow form there… We enjoy higher CPMs, by far, than some of the other entities that you mentioned in your questioned.” In a follow up, he was asked about deals, whether Viacom would rather grow organically, or buy out a site like iMeem: “Our primary focus, throughout our company, because we have so much to do, is organic growth.”

Ad networks: Would Viacom get into the ad network game? It already is dabbling there, such as initiatives from BET and other things, but it’s not a big priority, as the big money comes from the network’s owned and operated sites.