Web 3.0 & Viacom (Part 1)

Introduction

Viacom, Inc. is a leading entertainment conglomerate operating through two segments: Media Networks, which includes MTV Networks and BET (Black Entertainment) Networks, and Filmed Entertainment, which includes Paramount Pictures Corporation and Famous Music. The Company owns some of the most popular entertainment brands in the world including, BET, Famous Music, MTV, VH1, Nickelodeon, Nick at Nite, Comedy Central, CMT: Country Music Television, Spike TV and TV Land.

The thrust at Viacom is to monetize its Internet properties and this is evident from the fact that the Company recently reorganized its sales staff at MTVN to grow multi-platform sales and formed a new marketing team at BET to facilitate digital expansion.

The site also entered into a multi-year partnership under which Yahoo! will serve as the exclusive provider of sponsored search and contextual ads to all of Viacom’s 33 broadband sites, including MTV.com, VH1.com, Nickelodeon.com, comedycentral.com and BET.com, with potential expansion to more than 140 additional Viacom websites across the globe. The ads will be powered by Yahoo’s newly launched search marketing system, “Panama”.

In the second quarter 2007, Viacom’s revenues have increased by 13% to $3.19 billion from $2.82 billion in the same period of 2006. Both segments of the Comapany have performed well. Media Networks revenues were up 10% to $1.92 billion. Filmed Entertainment revenues were up 20% and experienced 35% jump in home entertainment and a 34% increase in theatrical revenues. Net earnings from continuing operations grew 4% to $433 million. Adjusted diluted earnings per share from continuing operations were $0.54 compared with $0.48 in the second quarter of last year.

During 2Q07, Viacom’s internet properties experienced an average of more than 40 million unique visitors each month, a 39% increase over 2Q06. Additionally, June 2007 saw a record for Viacom digital, when 42 million unique visitors logged onto Viacom sites.

Nicktropolis, Nickelodeon’s virtual world, reached a milestone of 4.5 million registered users, since its launch in late January 2007. AtomFilms doubled its US audience in May. Driven by the launch of its new user-generated content community, AtomUploads, AtomFilms attracted 2.23 million unique users in May. In June 2007, 3.1 million unique visitors logged onto Comedy Central. For the quarter, the site saw a 55% gain over Q2 2006.

MTV’s virtual worlds finished 2Q07 with nearly one million registered users, who on average spent more than 30 minutes on the sites per visit. The success of the MTV Movie Awards helped drive a record 8.8 million unique visitors to MTV.com in June. For the quarter, the site averaged 7.7 million unique visitors, a 9% gain over the first quarter.

As a part of its strategy to connect with audiences beyond television, MTV Networks launched several new sites in 2Q07 that vertically complement some of its most popular multi-platform properties. MTV launched five new branded sites, including: WannaBeMade.com, RealWorldCasting.com, YoMomma.tv, MySuperSweet16.com and ShortCircuitz.tv. Each of these vertical sites is focused on user-generated content and personal expression, tapping into viewers’ creativity and giving them paths to see themselves and their artistic expressions on the air.

VH1 also launched a number of sites, including ILoveNewYork2.com. Comedy Central’s new vertically integrated properties include Indecision2008.com, a site dedicated to aggregating the best of Comedy Central’s on-air political coverage along with programming exclusively created for the web. BET International recently announced a partnership with Brightcove, a leading Internet TV service, to distribute its compelling content to online audiences in the United Kingdom via a new Internet video site, BETonBlast.co.uk.

Viacom is working on a comprehensive digital strategy and is leveraging its powerful brands and quality content to create interesting digital properties. We will take a closer look at Viacom’s Internet properties in the following posts.

(To Be Continued)

This segment is part 1 in the series : Web 3.0 & Viacom
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