Viacom corporate presentation

Harsh vardhan shridhar

infernodiaz2/Harsh vardhan shridhar

Supply Chain in the Entertainment & Media Industry


SummaryGoal: To be the world’s leading branded entertainment

company across television, motion pictures, and digital media platforms.

• Two main segments• Media Networks• Filmed Entertainment

• Ticker: VIA – Class A, Voting shares ($27.4 billion) VIA.B – Class B, Non-voting shares ($23.7 billion)

• Targets wide range of age demographics including kids, tweens, teens and adults


Company Overview – Business Strategy• Expanding brand through creation of programming,

channels, motion pictures, and other entertainments• Invest in programming content that will grow ratings

across networks• Strengthen relationships with advertising, cable,

satellite, online, mobile and licensing partners• Develop new ways of reaching audiences• Maintain cost-savings while executing key ‘tentpole’

films supplemented by other smaller productions and acquisitions

• Build international presence through both Media Networks and Filmed Entertainment businesses


Company Overview - History1971: Viacom spun off from CBS, establishing itself as a public company1985: Acquired 66% of MTV Networks1987: National Amusements Inc. acquires 83% of Viacom1991: Acquired controlling interests of MTV Europe1994: $9.9 billion merger with Paramount Communications Inc.1999: Viacom starts trading on NYSE (VIA, VIA.B)2000: Viacom merges with CBS2001: Acquired BET Holdings II Inc.2005: Viacom (new) spun off, remaining company (old Viacom) changes

name to CBS Corporation2006: Acquired several interactive platforms2010: Announced regular quarterly cash dividend and recommences stock

repurchase program


Company Overview – Business SegmentsMedia Networks• MTV Networks

• Approximately 160 Networks worldwide including: MTV, VH1, Nickelodeon, Comedy Central, CMT, Spike TV, Logo, and TV Land,Network 18

• Digital Assets that provide interactive entertainment such as videogames and virtual pets include: Neopets, Atom, and Harmonix

• BET Networks• Provides content focused on Black media and entertainment to

over 100 million homes including BET, Centric, and BET.com

Filmed Entertainment• Paramount Pictures Corporation – brands include Paramount Pictures,

Paramount Vintage, MTV Films, Nickelodeon Movies and Paramount Home Entertainment


Management• Viacom is overhauling its business structure

Viacom: http://www.bsu.edu/web/tsstewart2/profile.htmlinfernodiaz2/Harsh vardhan shridhar

http://www.bsu.edu/web/tsstewart2/profile.html

VIACOM


Ownership of VIACOM

Sumner M. RedstoneExec Chairman and founder

of Viacom and CBSChairman of Board of NAI

NAI has Voting Rights for both

companies

Private Investment Arm

Sister Companies

NAI is 80% owned by Sumner Redstone, and 20% by his daughter. They both have control over CBS and Viacom through voting shares.

NAI is 80% owned by Sumner Redstone, and 20% by his daughter. They both have control over CBS and Viacom through voting shares.


Fading Management

• Primary shareholder and Executive Chairman

• A lifetime of experience / education

• Considered a visionary and enigmatic

• Lifelong philosophy is that content, not distribution medium is the key to success.

• Controlling stock interest is in an irrevocable trust with his grandchildren being the beneficiaries.

Sumner M. Redstone (87)


New Management

• Friend and Legal advisor to Redstone

• Been with Viacom since 1993

• Yale undergraduate and Columbia Law graduate

• Scored a perfect 1600 on SATs at the age of 13

• Significant legal and financial experience, but little experience in managing entertainment

Phillippe Dauman, Viacom CEO since 2006


SWOT• Strength:

Scale and scope of businessStrong brand name & copyrights

• Weakness:The size of the conglomerateDeclining profitability

• Opportunities:Have a more effectively constructed management teamDevelop a worldwide strategyThe outlook for broadcasting market is very lucrative

• Threats:Audience Acceptance Global Economic Conditions Competitive IndustriesTheft of Our Entertainment Content


Industry AnalysisGrowth Forecast

• Little growth in cinema attendance• Mixed growth in Home Media• Slow growth in broadcast TV ; Growth in satellite and cable

pay or subscription TV bringing in TV license fee• At most 2% growth in theater in the next 5 years, 0 growth in

TV production and about 1.5% growth in TV subscriptioninfernodiaz2/Harsh vardhan shridhar

Industry AnalysisMarket shares

Data Source: IBIS World

Global Movie ProductionViacom (Paramount): 3.5%

TV ProductionViacom: 23.3%

Cable NetworksViacom: 13.4%


• Rising production cost• Tech trend: HD Blu-ray as standard; Smart

phones, iPods and iPads; Movie download; Digital broadcasting

• Medium but growing concentration• Vertically integrated industry structure• “Low barrier of entry”• High risk in ROI (Piracy issues)• Potential Cannibalization of cinema by TV&

Digital Distribution

Industry Analysis Characteristics and trends

Data Source: IBIS Movie Production Industry Reportinfernodiaz2/Harsh vardhan shridhar

Key Competitors

• CBS Corporation (CBS)• Comcast Corporation (CMCS)• Walt Disney Co. (DIS)• News Corp. (NWSA)• Time Warner Cable Inc. (TWC)• Time Warner Inc. (TWX)


Company Analysis Product Introduction

• Product Segments: – Media Networks (to advertisers, content

distributors, and retailers)– Film Entertainment (motion pictures and

television programs)

• Platforms: – Television, motion picture, Internet, and mobile


Company AnalysisRevenue Breakdown

Segments Revenue ($ in Millions)

Data Source: VIA Results for the Quarter and Year Ended Sept 30, 2011infernodiaz2/Harsh vardhan shridhar

Company AnalysisMedia Network Revenue Drivers

• Advertising– Strength of advertising markets and general economic

conditions– Success of programming, measured by viewership– Seasonal variations (highest Sept-Dec)

• Affiliate fees – Stable multi-year agreements with operators with set rate

increases– Program availability and variations

• Ancillary – Consumer spending and acceptance of products– Popularity of programming and volume of content available


Company Analysis Film Entertainment Revenue Drivers

• Theatrical – Audience response (determinant)– Seasonal variations (highest Sept-Dec around holidays and summer)

• Home Entertainment– Number, timing and mix of home entertainment releases – Consumer tastes and consumption habits– Prominence given by distributors and retailers– Overall economic conditions and trends in discretionary spending

• TV and Digital License Fees– Consumer spending and acceptance of products– Popularity of programming and volume of content available

• Ancillary– Acceptance of theatrical content


Business Strategy• Investment in programming– “Content is King!”

Sumner M. Redstone, Chairman/Founder of Viacom

• Grow film entertainment business– Strategically produce smaller slate of movies/year

(~20), allocating 3-4 titles to franchise/brand movies• Higher Margin Digital Distributors– Amazon, Hulu, Netflix

• Growing internationally• Expanding into newer platforms


Company Analysis2011 Highlights

Media Networks• Viewership ratings: How many

“eyeballs” network captured— The 2011 Video Music Awards

(VMAs) attracted the VMAs’ largest audience in MTV history

— MTV Network (Jersey Shore)— Comedy Central earned double-

digit ratings growth in September (The Roast of Charlie Sheen)

— BET Networks achieved another record-breaking year of ratings

— Centric (Second Year) double-digit viewer gains in the fourth quarter

Film Entertainment• Box office sales

– Paramount is 2nd to Disney’s Buena Vista with 18 films in the top 100 grossing films (from 1973-2011)

– Top 5 studio makers (from 2006-2011)

Key Metrics for this content-driven industry:


Total Asset of Viacom(2011)


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Viacom corporate presentation