Wall Street analysts are nervous about Viacom Inc.'s short-term growth amid a ratings slump at the company's key television networks.
Ratings are down about 30% this season at MTV, the company's signature cable channel. The youth-skewing network also is losing its juggernaut franchise "Jersey Shore," which could make matters worse. And for the last year, Viacom's other major cash cow, Nickelodeon, has been struggling to stop the flight of young viewers.
TV networks provide about 90% of the Viacom's profits.
On Thursday, Wells Fargo media analyst Marci Ryvicker was blunt during a conference call with analysts to discuss the company's fiscal fourth quarter. Viacom earnings were up 13%, but revenue was down 17% for the July-September period. Domestic ad revenue declined 6%.
"There is a fear out there that MTV is broken," Ryvicker said.
Viacom Chief Executive Philippe Dauman quickly shot back: "It is not broken."
"MTV is very healthy," a defensive Dauman said. "Indeed, we have a great development pipeline and we have just added one of the major talents in our business in addressing young audience in Susanne Daniels."
Daniels, whose hiring as MTV's programming chief was announced this week, was intregal to the now-defunct WB network's success more than a decade ago by championing such shows as "Dawson's Creek," and "Buffy the Vampire Slayer." More recently, Daniels was a consultant to OWN: Oprah Winfrey Network.
"We have had our eye on [Daniels] for a long time," Dauman said, adding, "She will bring with her some additional talent who will bring to bear more development in the reality and scripted area. We have a good pipeline and this will turbo-charge it."
Viacom is not alone in its ratings woes. Major networks including CBS, ABC and Fox have also stumbled this season as digital video recorders and portable tablets become more popular with consumers. Ratings giant Nielsen, meanwhile, is struggling to accurately measure viewing on alternative screens, adding to the anxiety in the TV industry.
"The entire broadcasting and cable industry is at an inflection point as time-shifted viewing is becoming more prevalent," Dauman said.
However, he said, the company's first order of business is improving its ratings.
"We are engaging in self-help. We are going to create the supply, the inventory, so we can capture the [advertiser] demand that is out there," Dauman said. "That's why it is so important on building our programming and building our ratings."
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