Viacom

Posted on February 18, 2016 by Zaynah Anderson

About the Company

Viacom is an American global mass media company. The company and its content reach audiences in over 160 countries with content produced nationally and internationally [2]. It is the sixth largest broadcast and cable company as far as revenue but has the largest portfolio of ad-supported cable networks in the United States. Viacom’s cable networks are among some of the most popular and most watched channels by families across the world. This includes BET, VH1, MTV, TV Land, Comedy Central, Spike TV, Nickelodeon including all of its spin-offs, amongst many others [3]. In fact,Viacom has been rated the number one family cable network for numerous years.

Key Executives

Phillippe Dauman serves as President, CEO, and the Executive Chairman [4].

Wade Davis serves as Executive Vice President and CFO.

Thomas E. Dooley serves as Chief Operating Officer.

Sumner M. Redstone [5], is a majority owner of the company and also serves as Chairman Emeritus of the Board of Directors. However, his unstable health conditions [6] have decreased his ability to be present in the flesh during meetings as he is currently struggling with physical and speech mobility [7].

The Deal on Dish

Tensions between Viacom and Dish, a satellite-TV provider, had been brewing for quite a while before the issue was publicized nearing the Wednesday, April 20, 2016, deadline for a new carriage contract [8]. The root of the problem was a supplier-distributor disagreement in which Dish felt the carrier fees being charged by Viacom was unreasonable and overpriced. They stated that they only wanted to sign a contract that took into account the significant changes in the TV landscape and the way media is consumed. The company threatened to drop Viacom’s channels if Viacom didn’t compromise on the new deal [9].

Viacom however, suggested that they had offered Dish a best-of-its-kind deal for its very popular channels and explained that they have extended the deadline multiple times for Dish [10]. Refusal to come to an agreement would have resulted in a blackout of Viacom channels at midnight-eastern standard time. This would have been bad news for Viacom who has suffered low viewership with media being consumed in non-linear ways and would certainly impact ad revenue if it lost Dish’s 14 million viewers. The situation caused Viacom stock to drop nearly 10% on Tuesday with the fate of Viacom and Dish’s partnership still in the air [11]. However, the share prices increased the next day after CEO Charlie Ergen hinted in a conference call on Wednesday, that he would be interested in pursuing a new deal with Viacom should the company adhere to their conditions [13].

KEEPVIACOM.COM

In efforts to boost awareness on this issue, Viacom launched a website under the name www.keepviacom.com. The site broadcasted Dish’s plan to get rid of a total of 18 Viacom channels and allowed concerned visitors to learn more about the situation under a tab called “Get The Facts.” Other important tabs featured on the web page included “Shows You Will Miss” outlining viewer favorites and other shows that would have been gone forever.

One of the most important features on the site was a link titled “What People Are Saying” which provided a live feed from a discussion board of distressed Dish users and other Viacom supporters that spoke out against Dish threatening to drop the channels. Many Dish users openly expressed willingness to leave the cable provider should they drop the Viacom channels. The website also provided direct access to Dish’s Facebook page encouraging viewers to “make their voice heard” by posting on the page and urging them to join in the conversation on both Facebook and Twitter in which the hashtag #KeepViacom was trending. People of all ages used the hashtag to support Viacom and prevent Dish network from dropping the channels. The site made sure users of Dish network were able to voice their opinions by including Dish’s phone number on the digital protest site along with tips on how to get through to the company via phone [14].

Aftermath

Within the 24 hours leading up to the fate of Viacom and Dish’s relationship, hundreds of thousands passionate consumers reached out to Dish. Their voices proved to have been heard as the network did not drop the channels. Instead, Dish rose to the occasion meeting the deadline and renewing a multiyear deal with Viacom. The “keep Viacom” site has since been taken down, replaced by a message expressing gratitude and assuring users that an agreement with Dish had been met [15].

Fortunately, an agreement was reached putting both Viacom and Dish in a better position. The renewed multi-year deal includes plans for bringing select Viacom content onto Sling TV, Dish’s single and multi-stream service, as well as keeping all Viacom channels available for Dish subscribers [17].

Viacom in International Markets

Viacom has made an imprint in international markets through both acquisitions and expansions. Viacom’s acquisition of channel 5 in the United Kingdom has contributed to the company’s continued growth with a 20% growth in operating income in the country. With the acquisition of channel 5, Viacom was able to garner 23 others crucial networks allowing the company to gain access to 100% of the UK’s television audience. Viacom also has assets in India’s television market [18]. With a recent launch of VOD digital streaming service VOOT that gives India exclusive rights to consume over 17,000 hours of content through the service that is available on Android, and iOS devices for free with lots of kid-friendly content from Nickelodeon and MTV readily accessible [20].

Financial Plans

Despite ratings revealing that Viacom may be experiencing trouble with viewership, considering the decrease in ad revenue by 1% year over year and a decrease in overall revenue by 6% year over year, the CEO Phillippe Dauman assures everyone that Viacom will bounce back soon and see a growth in both ad revenue and overall ratings. They are making strides to accomplish this by using other tools of measurement aside from Nielsen in order to get advertisers acclimated with new ad formats. In addition to allowing them to make use of other platforms more frequently used to consume Viacom content such as laptops and tablets. One such tool is a service called Vantage which allows advertisers to place their ads more accurately along a variety of different platforms using varied consumer data as a catalyst [22].

Social Media

Viacom maintains communication with fans and investors via social media outlets such as Facebook in which the overall company has close to 150,000 likes and Twitter where it has over 23,000 followers. These numbers do not include the subscriber base for Viacom’s individual channel networks such as MTV and Nick for example, in which the numbers would soar much higher.

Forecast

Looking ahead Viacom’s future looks promising [23]. Many of its networks have plans for renewing shows for additional seasons after audience viewership numbers soared. The networks have also green-lighted lots of original content that will be introduced that should certainly garner some positive feedback. As of Friday, April 22, 2016, Viacom’s share price is $43.78, an increase of 2.87% [24]. Leading into May, the stock is now at the highest it’s ever been since the beginning of February.

Viacom’s 2nd Quarter Earnings Conference call is set to release on April 28, 2016, which will provide additional information into the company’s future and finances [25].

Sources

[2] “ABOUT VIACOM.” Viacom. N.p., n.d. Web. 15 Apr. 2016. http://www.viacom.com/about/pages/default.aspx.

[3] “Viacom Brands.” Viacom. N.p., n.d. Web. 15 Apr. 2016. https://www.viacom.com/brands/pages/default.aspx.

[4]”SENIOR MANAGEMENT.” Viacom. N.p., n.d. Web. 15 Apr. 2016. http://www.viacom.com/about/pages/seniormanagement.aspx#.

[5] “BOARD OF DIRECTORS.” Viacom. N.p., n.d. Web. 15 Apr. 2016. http://www.viacom.com/about/pages/boardofdirectors.aspx?bioid=1.

[6] Ackner, Daniel. “Inside the Viacom “Brain Drain”” Vanity Fair. N.p., n.d. Web. 13 Apr. 2016. http://www.vanityfair.com/news/2016/04/inside-the-viacom-brain-drain.

[7] Person, and Vanity Fair Magazine. “Read Sumner Redstone’s E-mails About His Succession Plans.” Vanity Fair. N.p., n.d. Web. 3 Feb. 2015. http://www.vanityfair.com/news/2015/05/sumner-redstone-retirement-health-viacom-future.

[8] Ingram, Mathew. “Dish vs. Viacom Fight Is All About the Shifting Balance of Power in TV.” Fortune Dish vs Viacom Fight Is All About the Shifting Balance of Power in TV Comments. N.p., 19 Apr. 2016. Web. 20 Apr. 2016. http://fortune.com/2016/04/20/dish-vs-viacom/.

[9] James, Meg. “Dish Network CEO Charlie Ergen Threatens to Permanently Drop Viacom Channels.” Los Angeles Times. Los Angeles Times, 20 Apr. 2016. Web. 20 Apr. 2016. http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-dish-charlie-ergen-viacom-dispute-20160420-story.html.

[11 ]Lieberman, David. “Viacom Warns That Its Networks May Go Dark On Dish Network.” Deadline. N.p., 19 Apr. 2016. Web. 20 Apr. 2016. http://deadline.com/2016/04/viacom-dish-contract-negotiations-impasse-1201740218/.

[12] “Charlie Ergen.” About DISH. N.p., n.d. Web. 20 Apr. 2016. http://about.dish.com/leadership/executive-leadership/charlie-ergen.

[13] Littleton, Cynthia. “Viacom Stock Plunges as Dish Renewal Fight Heats Up.” Variety. N.p., 19 Apr. 2016. Web. 20 Apr. 2016. http://variety.com/2016/tv/news/viacom-dish-stock-drop-renewal-deadline-1201756655/

[14] “Viacom and DISH Agree to Multi-Year Renewal.” Viacom. N.p., 21 Apr. 2016. Web. 22 Apr. 2016. http://news.viacom.com/press-release/viacom/viacom-and-dish-agree-multi-year-renewal.

[15] Frankel, Daniel. “Dish Deal Shows Viacom Channels Haven’t Lost Their Value, Analysts Say.” FierceCable. N.p., 22 Apr. 2016. Web. 22 Apr. 2016. http://www.fiercecable.com/story/dish-deal-shows-viacom-channels-havent-lost-their-value-analysts-say/2016-04-22.

[21] “1st Quarter ’16 Earnings Presentation.” (n.d.): n. pag. Viacom. 9 Feb. 2016. Web. 1 Mar. 2016.

[17] Perez, Sarah. “Streaming Service Sling TV Will Add MTV, Comedy Central, Nick Jr & More, following Viacom deal.” TechCrunch. N.p., 22 Apr. 2016. Web. 23 Apr. 2016. http://techcrunch.com/2016/04/22/streaming-service-sling-tv-will-add-mtv-comedy-central-nick-jr-more-following-viacom-deal/.

[18] Pelts, Shirley. “Welcome to Market Realist.” India: Why Is It Viacom’s Valuable Asset? N.p., 24 Mar. 2016. Web. 1 Apr. 2016. http://marketrealist.com/2016/03/india-viacoms-valuable-asset/?utm_source=yahoo&utm_medium=feed&utm_content=read-next-a&utm_campaign=viacoms-acquisition-channel-5-stronghold-uk.

[20] “Voot Video-on-Demand Service Launched in India.” NDTV Gadgets360.com. N.p., 30 Mar. 2016. Web. 1 Apr. 2016. http://gadgets.ndtv.com/tv/news/voot-video-on-demand-service-launched-in-india-819555.

[21] “1st Quarter ’16 Earnings Presentation.” (n.d.): n. pag. Viacom. 9 Feb. 2016. Web. 1 Mar. 2016.

[23] Lazaroff, Leon. “Viacom Could Go Higher Even after Dish Deal Removes Overhang.” TheStreet. N.p., 22 Apr. 2016. Web. 24 Apr. 2016. http://www.thestreet.com/story/13541284/1/viacom-could-go-higher-even-after-dish-deal-removes-overhang.html

[24] “Viacom, Inc.” Yahoo! Finance. N.p., n.d. Web. 22 Apr. 2016. http://finance.yahoo.com/q?uhb=uh3_finance_vert&fr=&type=2button&s=viab.

[25] “Events & Presentations.” Viacom Inc. -. N.p., n.d. Web. 23 Apr. 2016. http://ir.viacom.com/eventdetail.cfm?eventid=170845.

Pictures (not cited above):

[1] “Voot Image Logo.” Viacom18. N.p., n.d. Web. 24 Apr. 2016. http://www.viacom18.com/viabuzz/viacom18-digital-ventures-voot/.
[2] “Viacom Brands Logo. “Whoever Controls the Media, Controls the Mind.” N.p., 25 Dec. 2014. Web. 24 Apr. 2016. http://annesmedia.blogspot.com/.

DirecTV

Posted on October 5, 2014 by mjnixon

by Marla Nixon

DIRECTV logo, Photo courtesy of: [1] www.slashgear.com

CONTACT INFORMATION [2]

2260 E Imperial Hwy

El Segundo, CA 90245 United States

(310) 964-5000

www.directv.com [3]

COMPANY OVERVIEW

DIRECTV was founded in 1990 and is currently one of the world’s largest digital television services. The company provides services to over 32 million customers in the United States and Latin America (20 million in the United States and 18 million in Latin America). These services include HD, 3D and Video-On-Demand programming. DIRECTV is known for their #1 ranking in customer service as well as their sports programming which includes the NFL Sunday Ticket (see below “Deals and Acquisitions” for more details) [4].

ELECTED OFFICERS [5]

Michael White, Chairman, President & CEO, Photo courtesy of: [5] www.directv.com

Chairman, President & CEO: Michael White

Chief Human Resources Officer: Joseph Bosch

President, DIRECTV Latin America: Bruce Churchill

Chief Financial Officer: Patrick Doyle

General Counsel: Larry Hunter

Chief Technology Officer: Romulo Pontual

Chief Accounting Officer: Steve Adams

FINANCIAL SNAPSHOT

DIRECTV announced their 2014 3rd Quarter results on November 6th, 2014 [6]. The results showed a revenue growth of 6%, making their total revenue $8.4 billion. This revenue growth was due to an increase in U.S. ARPU (Average Revenue Per User) and DIRECTV Latin America (DTVLA) subscriber growth. However, this increase in revenue was offset by a lower ARPU at DTVLA. The lower ARPU at DTVLA was due to unfavorable changes in exchange rates.

DIRECTV stock quotes from June 2014 to present (6 months), Photo courtesy of: [7] www.money.cnn.com

Their current stock price (as of December 1st, 2014) is at $87.37 per share. This price has a year-to-date increase of 26.51% and a three-year increase of 89.69% [7]. Although financials have shown an increase it is important to note that DIRECTV has sustained subscriber loss in both the United States and Latin America units. This subscriber loss has been attributed to their credit policies and a rise in competition [6] [8].

MAIN COMPETITORS

DIRECTV has three main competitors: Comcast, Dish Network and Time Warner Cable [9]. Comcast is their biggest competitor ranking number one in the pay-TV market with 22.5 million video subscribers (DIRECTV holds about 20 million video subscribers) [10]. There is currently a proposed merger between Comcast and Time Warner Cable (see Tuned In [15] and The Eyes Have It [16] graphics under “Deals and Acquisitions). This merger is still under consideration by the FCC, but if approved will put Comcast even further in the lead of the pay-TV market [11].

DEALS AND ACQUISITIONS

On September 1st, 2014, a negotiation dispute between Raycom Media and DIRECTV caused a 7-day standoff that resulted in a blackout for some DIRECTV subscribers. 43 Raycom stations, including channels with NFL programming, went dark on DIRECTV. The dispute was resolved before the Sunday NFL game and all channels were restored [12].

Displays percentage of the market Comcast and DIRECTV will have if both mergers are approved, Photo courtesy of:[15] www.wsj.com

In May of 2014 AT&T announced that it planned on acquiring DIRECTV with a $48.5 billion merger. If combined, DIRECTV and AT&T will have more than 26 million subscribers in the United States. This would put DIRECTV ahead of Comcast (22.5 million subscribers as of Fall 2014) in the market for pay-TV. However, if the Comcast and Time Warner Cable merger occurs, DIRECTV would still remain second-largest. Looking at the graphic “The Eyes Have It [16],” if the DIRECTV and AT&T merger is made they will have a total of 25.8 million subscribers, unfortunately that number will remain dwarfed by Comcast if the Comcast-Time Warner Cable merger occurs bringing them up to 33.1 million subscribers (note that The Eyes Have It graphic only shows data up to 2013, data not referencing The Eyes Have It are current). However, both mergers have yet to be approved by the Federal Communications Commission (FCC) [13]. Both mergers have been under heavy consideration by the FCC because of the massive amount of subscribers each merger affects. If either or both merger are approved the pay-TV market competition will rise dramatically. On September 25th, 2014, DIRECTV stockholders approved the merger with AT&T in a vote that represented 77% of all outstanding shares. The voting results showed that more than 99% of votes casted were in favor of the merger agreement [14].

Current subscribers to DIRECTV, AT&T, Comcast and Time Warner Cable, Photo courtesy of: [16] www.wsj.com

To learn more about the AT&T and DIRECTV merger watch a news broadcast here. Video courtesy of: [17] www.wsj.com.

On October 1st, 2014, DIRECTV renewed it’s deal with the National Football League (NFL) for the NFL Sunday Ticket. The NFL Sunday Ticket includes the showing of all out-of market games (regular season games outside of their local markets) as well as real time stats [18]. The NFL Sunday Ticket has been given exclusive rights to DIRECTV and is being extended for 8 years. The price was confirmed at $1.5 billion per season which is a 50% price increase compared to what DIRECTV paid in previous years. DIRECTV produces revenues of about $600 million from the NFL Sunday Ticket with around 2 million subscribers. This revenue is far below what they are now paying for the rights of the NFL Sunday Ticket programming [19]. A possible reason for DIRECTV’S agreeing to a dramatically increased price is their proposed merger with AT&T (see above paragraph). If DIRECTV did not renew it’s deal with the NFL for the Sunday Ticket, AT&T was allowed to walk away from the deal without any penalties [19] [20].

In early November, AMC Networks threatened to go dark on DIRECTV if negotiation standards are not met. With their hit show The Walking Dead halfway through its season a blackout would be dangerous for DIRECTV business. The contract is set to expire in 2015 and there have been warnings aired on the show that DIRECTV subscribers may not continue to receive programming from AMC [21]. However, DIRECTV has stated that subscribers will be able to view every episode of the upcoming season of The Walking Dead in a public promise on their website [22].

DIRECTV and Guest-tek announced a strategic relationship on November 13th. This relationship expands technology and programming for hotels and guests [23].

LOOKING FORWARD

DIRECTV is now offering 4K Television. 4K television, also known as Ultra HD, is the latest HD technology and is called 4K because of the image width (4,000 pixels) [24]. DIRECTV is the first and only multi-channel video provider to offer 4K/Ultra HD TV. To receive DIRECTV 4K programming, subscribers need the DIRECTV Genie HD DVR and a DIRECTV 4K ready television. Currently the only DIRECTV 4K ready TV’s are the 2014 Samsung Ultra HD/4K television models [25]. The DIRECTV 4K programming was released on November 14th and currently has about 20 movie titles to choose from [26].

Photo courtesy of: [27] www.seriable.com

DIRECTV has also been creating some of their own content programming since 2013. Most recently, a new drama called “Kingdom” starring Jonathan Tucker and Nick Jonas has had a 20-episode renewal a week after its premiere. The show is about a mixed Martial Arts group living in Venice, CA. “Kingdom” has been their most-watched series on their Audience Network [28]. The DIRECTV Audience Network is devoted to their original programming [29].

Watch the Kingdom series trailer here. Video courtesy of: [30] www.youtube.com.

SOURCES

1. DIRECTV’s Logo, www.slashgear.com, RT: 11/29/2014

2. Contact Information, www.hoovers.com, RT: 11/29/2014

3. DIRECTTV’s Website, www.directv.com, RT: 11/29/2014

4. “Our Company”, www.directv.com, RT: 11/30/2014

5. Elected Officers, investor.directv.com, RT: 11/28/2014

6. 2014 3rd Quarter Results, investor.directv.com, RT: 11/30/2014

7. DIRECTV Stock Quotes, www.money.cnn.com, RT:11/30/2014

8. “Tighter Credit, Competition Pressure DirecTV,” www.multichannel.com, RT: 11/30/2014

9. Competitors, www.hoovers.com, RT: 11/30/2014

10. Comcast Vs. DIRECTV, www.fool.com/investing, RT: 11/30/2014