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Viacom Focused on Branding

8 Feb, 2006 By: Jessica Wolf

Executives at the new Viacom have their eyes on the digital prize.

Viacom is a “more nimble, focused and flexible company,“ company CEO Tom Freston told investors last week.

The company is completely “platform agnostic,” Freston said, and “very well positioned to monetize the growth trends in digital media.”

Freston also called the newly split Viacom the “only large capital pure-play content company” as it comprises Paramount Pictures (which now includes DreamWorks Entertainment), Paramount Home Entertainment, MTV Networks (including MTV, VH1, Nickelodeon, Nick at Nite, Comedy Central, CMT: Country Music Television, Spike TV, TV Land and others), BET and Famous Music.

“We welcome media fragmentation,” he said. “It is an opportunity that plays to our strengths.”

Freston pointed to Viacom's 57 wireless content deals, including its content commitment to Verizon's V-Cast mobile phone network, the creation of proprietary Internet video series “MTV Overdrive” and its successful launch into Apple's burgeoning video download space as the wave of the future.

In the few short weeks since Paramount set a slate of content for release on iTunes, iPod lovers have downloaded 700,000 individual shows from MTV programs and 13,000 full seasons from Comedy Central and Nickelodeon series, Freston said.

Overall, last year Viacom made $150 million in digital revenue, primarily from “ads and subscriptions,” Freston said.

“In the next three years that will be more like $500 million,” he said.

As for what Viacom executives have dubbed “the rebirth of Paramount Pictures,” Freston said that goal was “fast tracked” by Paramount's recent acquisition of DreamWorks and looming sale of that studio's title library to the tune of $1 billion. The turnaround for the studio will continue with Viacom's plan to dismantle Universal Pictures International — its long-running international distribution partnership with Universal Studios — next year and take control of international revenue for home video product.

“We are strengthening, upgrading and globalizing our home entertainment operations,” Freston said.Freston also said the upcoming HD DVD and Blu-Ray product launches, both of which Paramount is supporting, will offer significant new revenue streams — but pointed out there is still much life in standard definition DVD, especially for Paramount.

Because Paramount was one of the last studios to launch DVD, the supplier has only tapped 55% to 60% of its catalog, Freston said.

He added much of the original product released several years ago at higher price points could be repriced and re-released.

“There's a lot of room to monetize under-exposed film and TV libraries,” Freston said.

Branding is the watchword at the new Viacom. More content will come branded with the MTV, Nickelodeon and BET labels, Freston said.

“In this media-fragmented world, brand recognition is the most viable content navigation tool for the consumer,” Freston said.

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