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Viacom CEO: Digital Sales Improving

11 Mar, 2014 By: Chris Tribbey

Viacom-owned Paramount has seen a long-running drop in home entertainment and overall revenue, but electronic sellthrough may finally be helping to turn the tide, according to Viacom CEO Philippe Dauman.

“I see Paramount, as we get into [fiscal 2015], becoming overall a growth business for us because of new revenue streams,” Dauman said, speaking March 10 at the Deutsche Bank Media, Internet and Telecom Conference. “We’re now reaching a point where electronic sellthrough (EST) has been offsetting the further diminishing [sales] from the DVD window. And many of our franchises are built for international distribution, where there is growth in the movie business.”

During Viacom’s fiscal first quarter of 2014 (ended Dec. 31), Paramount reported a loss of $74 million, with a 37% decrease in quarterly home entertainment revenue and a 52% drop in theatrical revenue. But that shortfall was partly due to a smaller release slate for the studio.

The home entertainment releases of Paramount’s Anchorman 2: The Legend Continues, The Wolf of Wall Street, and Jackass Presents: Bad Grandpa are expected to help lift the studio’s results. The March 28 theatrical release of the Biblical film Noah, along with the summer releases of Transformers: Age of Extinction and the Michael Bay-produced Teenage Mutant Ninja Turtles, are also expected to bring in big results for Paramount.

Making Viacom’s content available across all platforms — streaming, VOD, EST — is an essential part of the company’s strategy today, Dauman said. Every agreement with a distributor accounts for TV Everywhere, and the advertising potential mobile content delivery offers.

“To some extent [subscription] VOD players have been filling a gap, because the on-demand offering from traditional distributors has not been all that robust until now,” he said.

Noting that Viacom recently renewed its distribution agreement with Time Warner Cable, Dauman said the proposed Comcast acquisition of Time Warner Cable won’t have an impact on Viacom. The Time Warner Cable agreement includes distribution of both Viacom’s linear TV networks and streaming for TV Everywhere apps. The deal also includes distribution of Epix, the multiplatform pay-TV channel run by Paramount Pictures, Metro-Goldwyn-Mayer Studios and Lionsgate.

“We welcome what Comcast had said about investing in its platform, providing more revenue opportunities with its consumers,” Dauman said. “What’s most important to us is that our content is available ubiquitously, on different platforms in a measured way. We’ll see how it unfolds. We’re focused, whoever our distributor is, on providing value in general.” 

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