Viacom might not be a household name, but its famous entertainment brands are welcomed into most living rooms on a daily basis. The company is a leading media conglomerate with an extensive portfolio of cable TV and film production assets. Its MTV Networks unit runs such cable networks as Comedy Central, Nickelodeon, and the family of MTV channels (MTV, MTV2, VH1). Viacom also owns Black Entertainment Television, which airs programming on BET, BET Gospel, and BET Hip Hop. In the film business, Viacom operates through Paramount Pictures, which includes imprints Paramount Pictures and Paramount Vantage. Chairman Sumner Redstone controls a majority of Viacom through his National Amusements movie theater chain.
Flagship channel MTV focuses on younger viewers and popular culture, and continues to draw one of the largest television audiences in the 18-34 age group. Nickelodeon, meanwhile, has become a popular destination for children's programming. Comedy Central appeals to young adults with programs such as as The Daily Show with Jon Stewart and its offshoot The Colbert Report, while BET dominates the important urban demographic with entertainment, music, and special interest programming.
The company's filmed entertainment division, meanwhile, is responsbile for hits such as the big budget Transformers movie. Its sequel, Transformers: Revenge of the Fallen (co-produced with DreamWorks), took in more than $300 million in its first 14 days of release in 2009. The blockbuster performance followed on the heels of Paramount's latest Star Trek adventure, which opened with more than $75 million at the box office.
Viacom also expanded its holdings in cable programming with a new pay-TV channel called EPIX. The network, a partnership with movie studios MGM and Lions Gate, debuted in 2009 and offers an online subscription movie service along with its traditional cable and satellite channel. The partners hope the new channel will offer a larger slice of revenue for their movies than distributing them through such rivals as HBO (owned by Time Warner) and Showtime (CBS Corporation).
Viacom does not have the broad complement of media assets that characterize integrated conglomerates such as Time Warner and Walt Disney, but the company still realizes some potential by integrating its TV and film businesses, such as through DVD sales and cross-promotion.
The company is primarily focused on its television operations, which account for about 60% of sales. Generating most of their revenue from a combination of commercial advertising and carriage fees paid by cable system operators, the TV networks provide a steady anchor for the the company, balancing against the uneven feature film business and the sometimes fickle tastes of movie goers.
What particularly drives Viacom's business is its success in building entertainment brands. The company is notable for creating and promoting such names as MTV and Nickelodeon into easily recognizable banners that stand for a particular form of entertainment.
Viacom has been looking to expand its reach into digital media in an effort to reach its young and increasingly online target audience. However, the company announced plans to sell video game developer Harmonix Music Systems in 2010, after lagging sales of the popular Rock Band video game began to hurt the company's bottom line. – less