How Soft Film Impacts Viacom Earnings


Viacom-logoViacom just told Wall Street its earnings for the current fiscal quarter will be lower than expected, partially due to poor performance of one of Paramount’s summer movies and due to a drop in advertising dollars at its U.S. networks. A delay in a completing a subscription-on-demand is adding to the financial outlook as well.

Media companies have been challenged to adapt their businesses to shifts in younger viewer’s behavior; Viacom has been harder hit compared to other television owners because its Nickelodeon, MTV and Comedy Central networks target youth who’ve embraced digital formats quickly.

Film misses are typically one-off events and the delay in SVOD revenue just means there will likely be a shift of money into another quarter, notes Wells Fargo.

Viacom’s domestic ad sales are tracking in-line with the analysts -4% estimate. While not good news, it’s not exactly bad either, according to analyst Marci Ryvicker.

The next “catalyst” for Viacom will likely be when the board announces CEO’s Philippe Dauman’s replacement, she notes adding Wells Fargo prefers Viacom and CBS to remain separate; Speculation has it they may recombine after Sumner Redstone’s visit to CBS this week.

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