Viacom Looks Online For Help

Filed in archive Business Trends on May 23, 2007

Our mediocre numbers are proof of our success.

Last week, Forbes asked an interesting question "do TV ratings matter as much as they used to for a media conglomerate like Viacom?"

"... during a conference call to discuss the March quarter financial results, Viacom executives tried to downplay the importance of TV ratings, pointing to their ongoing efforts to beef up the Internet presence of its most popular shows and build online advertising partnerships around them.

... Senior Executive Vice President and Chief Financial Officer Thomas Dooley said MTV has the same number of viewers it had a year ago, but he acknowledged that they are watching the network less often.

What accounts for this decline? Tired programming formats would seem to be part of the problem. But Dooley argued that the decline in viewership has occurred "largely because we're driving people to other places," such as the network's growing roster of online virtual-world properties for TV shows such as Laguna Beach and the hills.

The ratings decline at MTV is "indicative of how the world is changing right now for everybody in this business and how you have to expand your relationship with advertisers and extend your relationship with the consumer ... over a wider scope," Dooley said.

Alas, as much spin as you try to put one it, Viacom had to report a 36% year-on-year drop in first-quarter net income due, in part, to a $56 million restructuring charge at the company's MTV Networks division.