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Viacom CEO: Apple TV ‘Doesn’t Work’ for Industry

23 Sep, 2010 By: Erik Gruenwedel

The recent re-launch of Apple TV, underscored by the availability of select repurposed 99-cent TV programs, represents little value to content holders, Philippe Dauman, CEO of Viacom Inc., told an investor group.

Viacom’s portfolio includes Paramount Pictures, MTV, Spike TV, TV Land, and Nickelodeon, among others.

Speaking Sept. 23 in New York, Dauman said Apple’s proposed price point for episodic TV programming didn’t provide the requisite incremental revenue while preserving the overall value of the content.

“We don’t think that works for us. We don’t think that works for the industry. It’s not a good price point. And for that reason we are not supplying our programming to [Apple TV],” Dauman said. “We are happy to distribute our content to consumers wherever they want it through channels that will reflect the value of the content. We don’t think Apple has it quite right yet.”

That said, Redbox offering Paramount Home Entertainment’s new-release DVD movies for 99 cents on street date is apparently a different matter, according to Dauman. He said 10 months of hard data comparing identical titles available at Redbox with retailers without Redbox kiosks found no discernable erosion of packaged-media sales.

Redbox (unlike Apple), however, is on the hook to pay Paramount $575 million in license fees for new-release titles through 2014.

“Given the economics are much more accretive from Redbox, we saw there was incremental revenue opportunities for us,” Dauman said. “Should that change, we have the opportunities down the road to change the deal.”

The CEO said the packaged-media market remains stable, with catalog titles underperforming compared to franchise films such as Transformers, Mission: Impossible and Star Trek.

“A lot of the lesser titles really haven’t worked,” Dauman said, adding that the recession continues to hamper further acceleration of alternative transactional VOD services.

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