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Viacom CEO: ‘Our Content will Drive Amazon Prime Sub Numbers Up’

2 Aug, 2013 By: Erik Gruenwedel, Chris Tribbey

Paramount Pictures’ third-quarter operating income drops 63%

Viacom’s recent license agreement with Amazon Prime Instant Video after Netflix declined to renew its deal, should help the ecommerce behemoth’s subscription streaming service attract members, CEO Philippe Dauman told analysts.

Speaking Aug. 2 in a fiscal call, Dauman reiterated that Amazon offered Viacom a "supplier environment" to market Nickelodeon, Comedy Central, MTV and Paramount Pictures content than did Netflix.

“We like the Amazon brand because our products are brought out more clearly in the [that] environment than in the Netflix environment,” Dauman said, adding that he believes Viacom content "will drive Amazon Prime sub numbers up."

Netflix contends it chose not to renew the streaming agreement in order to be more selective of its content going forward, including increased original fare.

Meanwhile, Paramount reported third-quarter (ended June 30) operating income of $17 million, which was down 63% from operating income of $46 million during the previous-year period.

The studio, which includes Paramount Home Media Distribution, said revenue increased 15% to nearly $1.6 billion due to the theatrical successes of Star Trek Into Darkness, World War Z, and Pain and Gain.

Indeed, World War Z was the highest opening box office weekend for a Brad Pitt movie. The zombie movie, which grossed $474 million at the global box office, streets at retail Sept. 17.

The movie, together with Into Darkness, is set to generate $1 billion in combined revenue, according to Dauman.

Operating income was negatively affected by increased studio operating expenses (notably marketing of Z and Darkness), and a 10% decline in global home entertainment largely due to lower carryover revenue from prior quarters.

In the call, Dauman warned Paramount would see significant results from the two movies that nonetheless might fall below expectations due to the crowded summer movie slate.

“[The studio] will be moderately less [profitable] than anticipated due to the crowded tentpole schedule this summer, and the delay of certain film licensing deals into the next fiscal year,” Dauman said.

The CEO said Viacom in the quarter renewed a license agreement with Netflix Latin America. The renewal comes on the heels of Viacom’s SVOD agreement with Amazon Prime Instant Video, which includes production of about 300 hours of original programming, and streaming deals with Lovefilm in the U.K., and Germany.



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