Viacom

by  JACKIE PERRELLI
Earns Viacom

Viacom Logo [1]

Company 

Viacom is an entertainment powerhouse responsible for connecting with audiences through a variety of platforms.  With approximately 700 million global subscribers [2], Viacom distributes their content across television, and more importantly, online. Lately, Viacom has been focused on restructuring the company and finding new ways to reach audiences.  With his recent two-year contract extension, Philippe Dauman, [3] both CEO and President, is believed to be the right man in charge to handle the Viacom reboot.

Dauman’s leadership is especially important in a time when Sumner Redstone, founder of Viacom, is in questionable health.  Redstone was not able to attend the last shareholder meeting held in early March [4]. The company is prepared; however, for a post-Sumner world.  A board of trustees is in place consisting of current CEOs and family members, ready to protect the Viacom empire. It has even been rumored that Viacom will merge with another media conglomerate, but told not during Redstone’s reign [5].

Background

viacom-networks

Viacom TV Channels [23]

MTV, VH1, CMT, Logo, BET, Nickelodeon, Comedy Central, and TV Land are a few channels inclusive to the Viacom brand. In 1987 Redstone, controlling shareholder, bought the company for $3.4 billion dollars [6]. Today, Viacom’s share price is 69.77 [7]. This number is the result of a 14 percent decline last year and already another 8.8 percent downfall in 2015 [8]. Within the past 52 week period the Viacom share price has been as high as 89.76 [7]. One source of the drop in stock price can be attributed to poor ratings.

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Stock Price [9]

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Viacom Ratings [11]

Viacom pinpoints Nielsen ratings and their inability to calculate views from online sources [10].  Due to the fact that most traditional viewers are switching to some sort of online viewing, ratings from online sources are imperative to Viacom.  Since last year, most Viacom channels have declined greatly and are down 30 percent ratings wise [11].  For this reason and many more is why Viacom is in the middle of a reconstruction period.

 Online Content

Noggin is a new mobile subscription service for preschoolers.

Noggin Streaming Service [13]

With the goal of staying relevant in a world that skews online, Viacom created a streaming service outside their traditional cable package.  This streaming service, Noggin, is through Nickelodeon and aimed at a younger demographic.  Due to an 18 percent tumble in audience viewership last quarter, Viacom introduced the service in order to compete with other companies.  However, known for their television bundle, Viacom has to be careful not to turn viewers completely online, resulting in subscription cancellation. The livelihood of other channels like VH1, MTV, and TV Land, are at risk if viewers abandon their subscriptions [12].  Viacom is already in risky territory with Suddenlink, the seventh-largest cable operator in the U.S, having recently discontinued their services with Viacom [14].

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Viacom VS Suddenlink [22]

Not wanting to pay significant increases for channels, Suddenlink got rid of the bundle completely.  Although Suddenlink lost significant viewers from the Viacom split, 99.7 percent of their customers continued to pay for Internet services [14].  At a time with such a strong online presence,  Viacom fears that other cable companies could follow in Suddenlink’s footsteps and drop the channel lineup; resulting in solely online streaming.  In preparation for the future of television, Viacom has planned to reorganize their company.  This has resulted in the favoring of employees with technical capabilities rather than traditional workers as content continues to move online [12].

Viacom Restructuring

Along with a changing platform for providing content, Viacom is experiencing changes throughout the entire company.  Most of the changes occurring in the company today stem from both low ratings and advertisement sales. To ameliorate the ad sales, Viacom is going into upfront season with a new strategy to boost advertisers participation within the network.  With the Nielsen ratings not sustaining the amount of klout they once had, Viacom has chosen to guarantee success for the advertiser’s ads by broadcasting to very niche audiences [15].   

[16] 

That in mind, the company outlined a plan that would restructure the Viacom brand moving forward.  This business plan included the layoff of 400 jobs across the company ranging from New York to Los Angeles, and encompassing some highly ranked positions.  With the elimination of some jobs and cancellation of underperforming shows, Viacom aims to save $350 million dollars annually once the restructuring is complete.  But before this can happen, Viacom put a halt on their share buyback program, which aims to shrink the number of outstanding shares, and recorded a $785 million in pre-tax charge for the compensation of laid off workers, abandonment of ineffective programming, and declining ratings due to online competition [17].

To learn more about the Viacom reboot period and which shows are getting cut from the Viacom lineup: click here [18].

Another part of the Viacom restructure deals with the consolidation from three television network groups into two.  The first group includes: Comedy Central, MTV, Spike, Logo, and VH1, while TV Land and CMT are now placed with Nickelodeon.  The first group will focus towards general content, while the second network group will have a more family-entertainment aspect to it [19]. The Viacom reboot has a significant focus on a shift from traditional TV to more digital content, having a more niche staff, and investing in areas that progress Viacom as a company.

New Audiences

funny_or_die_4

Funny or Die Logo [20]

As Viacom attempts to save money and explore new options, the company has two audience-building transactions in the works.  The first transaction deals with the acquisition of three comedy websites.  The Onion, Funny or Die, and CollegeHumor, give Viacom more ways to tap into digital and online audiences. [12]

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International Revenue [21]

The second transaction involves new audiences and opportunities for Viacom in India.  With a very saturated, highly online, U.S. market, Viacom is looking to places overseas worth investing in. While U.S. viewers tend to get most of their content in ways other than the traditional TV, India offers more pay-for-tv customers.  Viacom already owns Channel18 in India and is now vying for five more local entertainment channels.  The company sees India as a place to invest with over 250 million households with pay-TV service and subscriptions. A benefit of investing in areas overseas are the low-budget production costs and the ability to expand Viacom’s American channels to new countries.  Foreign markets allow Viacom to tap into potential audiences outside The United States [21].  India is a popular market not only for Viacom, but also other television companies that are beginning to see the potential in investing overseas.

Overview

It is apparent that many changes are taking place at Viacom, and will continue to take place until the company feels ready and back on its feet.  The reorganization of the company, streaming service, and plans for the future are all positive ways in which Viacom can grow and prosper.

Sources

[1]  Stempel, Jonathan (March 12 2015). Viacom Agrees To $7.21 Million Settlement To End Interns Wage LawsuitHuffington Post. Retrieved: April 9 2015.

[2] About ViacomViacom. Retrieved: April 9 2015.

[3] Hagey, Keach and Stynes, Tess (January 15 2015). Viacom Extends CEO’s Contract by Two Years.  The Wall Street Journal. Retrieved: April 2 2015.

[4] Szalai, George (March 12 2015). Sumner Redstone to Miss Viacom Shareholder MeetingThe Hollywood Reporter. Retrieved: April 2 2015.

[5] Atkinson, Claire (March 14 2015).  Post-Sumner CBS-Viacom power a mixed bagNew York Post. Retrieved: April 9 2015.

[6] The Autumn of SumnerThe Economist. Retrieved: April 9 2015.

[7] Viacom Stock PriceGoogle Finance. Retrieved: April 10 2015.

[8] Sakoui, Anousha (April 6 2015). Viacom Halts Buybacks, Sees $785 Million Restructuring CostsBloomberg Business. Retrieved: April 9 2015.

[9] Viacom Stock PriceYahoo Finance. Retrieved: April 9 2015.

[10] Hagey, Keach and Ramachandran, Shalini (February 11 2015). The Picture Gets Fuzzy at Viacom.  The Wall Street Journal.  Retrieved: April 9 2015.

[11] Layoffs, restructuring leads to chaos at ViacomFox Business. Retrieved: April 14 2015.

[12] Steel, Emily (January 29 2015). Nickelodeon to Offer a Streaming Service as Viacom Steps Up Digital EffortsThe New York Times.  Retrieved: April 9 2015.

[13] Perez, Sarah (February 25 2015). Nickelodeon Unveils “Noggin,” A Mobile Subscription Service For Preschoolers Arriving In March. Tech Crunch. Retrieved: April 13 2015.

[14] Steel, Emily (March 8 2015). Provider’s Dispute With Viacom Highlights Skirmish Over the Cable Bundle. New York Times.  Retrieved: April 6 2015.

[15] Steinberg, Brian (April 13 2015). Time Warner, Viacom Back Away From Nielsen Guarantees For Ads. Variety. Retrieved: April 15 2015.

[16] Ryssdal, Kai (April 14 2015). Make more upfront: Viacom, Turner discuss new ad modelMarketplace. Retrieved: April 14 2015.

[17] Gottfried, Miriam (April 7 2015). Viacom: Buyback Step Back Isn’t a Setback. The Wall Street Journal.  Retrieved: April 9 2015.

[18] Viacom faces behemoth $785M charge. Youtube. Retrieved: April 15 2015.

[19] Viacom restructures to take $785 mn charge, brings TV networks into two unitsTelevision Post. Retrieved April 10 2015.

[20] Hunsucker, Andy (November 10 2011). A Place For Film Interviews – Funny Or Die ProducersIndiana Public Media. Retrieved: April 14 2015.

[21] Sharma, Amol (January 19 2015). Why Viacom Is Looking to India for a New TV AudienceThe Wall Street Journal. Retrieved: April 9 2015.

[22] Goff, Andrew (October 2 2014). Ack! The Suddenlink vs. Viacom War Now Hurting Humboldt’s Ability to Watch the Daily Show Online. Lost Coast Outpost. Retrieved: April 13 2015.

[23] Dampier, Phillip (April 1 2015).  Viacom Demands 100% Rate Increases for Hundreds of Small Cable Systems, Military Bases. Stop the Cap!  Retrieved: April 13 2015.

IAC

By Carlos Bonachea
IAC Logo

Courtesy of IAC Press Kit [1]

555 W. 18th St.
New York, NY 10011
Phone: 212-314-7300
Website: www.iac.com

Key Executives

Barry Diller - Chairman and Senior Executive, IAC & Chairman and Senior Executive, Expedia, Inc.Chairman and Senior Executive, IAC - Chairman and Senior Executive, Expedia, Inc.

Barry Diller – Chairman and Senior Executive, IAC & Chairman and Senior Executive, Expedia, Inc.
Courtesy of the official IAC website [2].

Executive Vice President and Chief Financial Officer Courtesy of the official IAC website

Jeff Kip – Executive Vice President and Chief Financial Officer
Courtesy of official IAC website [3].

Victor Kaufman – Vice Chairman, oversees all strategic planning, financial and legal matters.
Courtesy of official IAC website [4].

      IAC remains at the forefront of internet commerce, communication, and media by strategically managing the investment, acquisition, and sale of some of the worlds most innovative companies [5]. IAC began as Silver King Communications Inc., a television company led by Barry Diller, who previously was in charge of Fox Broadcasting as well as Paramount Pictures prior to that. [6]

      IAC now boasts over 1.3 billion total monthly visits amongst it’s network of sites and controls over 150 brands and products all at the cutting edge of web commerce and modern living. IAC has spawned six independent publicly traded companies – Expedia, TripAdvisor, HSN, Tree, Interval, and Live Nation (formerly Ticketmaster). Simply put IAC is the 9th largest network in the world and one of Fortune’s most admired companies in the internet services sector. [5] [7]

About_Overview_Nov2013

Some of the many brands owned by IAC.

Financials

From April 22 2013 to April 17, 2014 stock prices of IAC (IACI) have risen 55.2% from $44.25 a share to $68.67 a share, proving IAC’s value to it’s investors. [8]

2013 Q4 statements show that revenue for IAC is down 5% from 765.3M in Q4 2012, to 724.5M.

IAC Head Quarters in NYC Photo courtesy of Vimeo on Flickr.

IAC Head Quarters in NYC Photo courtesy of Vimeo on Flickr.

IAC saw a 48% adjusted EPS growth from 0.7 in Q4 2012 to 1.04 in Q4 2013.

IAC also has enjoyed and increase in adjusted net income of 38% from 66.2 in Q4 2012 to 91.1 in Q4 2013.

Thus IAC has now entered its 19th consecutive quarter of double-digit operating income before amortization growth.

Financial Statements courtesy of IAC’s public quarterly report [9].

Media

Logo courtesy of IAC official Profile

Logo courtesy of IAC official Profile

      Vimeo is one of IAC’s hottest commodities and a worthy innovator in the realm of web video and user generated content. Vimeo currently has over 100 million unique monthly users and over 22 million register users which provide content. Vimeo is known to be the best video player “in the galaxy” which attracts some of the best independent filmmakers. Though Vimeo is within the media branch of IAC which accounts for a relatively small portion of revenue compared to ‘web search and applications’ or the Match group the media prospects of IAC prove to be some of the most innovative. [11]

      As edea.cameo_transparentof March 18 2014, Vimeo has acquired ‘Cameo‘ a video making app which the leaders at Vimeo say is going to be independently run much like the recent acquisition of Echograph about a year prior. This is very much inline with the philosophy of supporting new ideas which is so close to the core idealsCH-Logo-300x186_black of IAC. [10]
Another company in the Media branch is CollegeHumor which, thought it does not directly create a majority portion of IAC’s revenue, it has a huge impact in pop culture and the multimedia habits of the 18-14 demographic. It draws over 100 million monthly video views and the number 9 most subscribed to channel on youtube. [12]

Match

      The Match group of IAC is comprised of all the the websites and brands which deal Match_logo_300x186with dating and matching people together. Match.com being the primary website but also including many other brands. Meetic, the European leader in online dating, Chemistry.com, okcupid, and tinder. There are also some brands which specialize in helping advertisers find their audience.
Match.com recently made an exclusive MLBpartnership with Major League Baseball to further find matches based on team preferences. This joint effort can mean serious revenue for the Match group in future quarters. [13]
IAC in an effort to restructure some of the company for unknown reasons recognized Greg Blatt as the new Chairman of the newly created Match Group, on the Board of directors as of December 19 2013. This strategic moves serves as an indicator of the companies success in the Match department.

IAC thus far has proven to be a very innovative company which has harnessed the reach of its network to self facilitate more growth across company and brand lines. This innovative approach is reshaping not only pop-culture and the way we access media but the daily lives of the average person. IAC will continue to shape the way the internet does business and the way people interact. With projected financial statement the decrease in operating costs will lead to a great deal of profit in the following quarters which will more than likely prompt another large media acquisition given the highly increased capital which IAC now has.

Sources

[1] IAC Online Press Kit RET: 4/13/2014

[2] Official IAC Website– Bio Page on Barry Diller – Photo credit: Michele Asselin RET: 4/13/2014

[3] Official IAC Website– Bio Page on Jeff Kip RET: 4/13/2014

[4] Official IAC Website– Bio Page on Victor Kaufman RET: 4/13/2014

[5] Official IAC Website– Overview of Brands RET: 4/14/2014

[6] Official IAC Website– Timeline of company progress, acquisitions and sales RET: 4/15/2014

[7] CNN Money– IAC’s ranking as one of the world’s most admired companies by Fortune RET: 4/15/2014

[8] Google Finance– IAC share value from 4/22/13 – 4/17/14 RET: 4/15/14

[9] IAC public quarterly report– RET: 4/15/2013

[10] Re/Code– Article by Peter Kafka on the aquisition of Cameo by IAC’s media company Vimeo; published March 18 2014; RET: 4/11/2014

[11] Official IAC Website– Vimeo brand profile and overview RET: 4/13/14

[12] USA Today– Match.com partnership with MLB RET: 4/14/14