Viacom, Inc. (NYSE:VIA) is a media & entertainment conglomerate. The company owns and operates some of the world's best known media networks and film production studios including networks such as MTV, BET, Nickelodeon and Spike TV as well as film production companies including Paramount Pictures and DreamWorks Pictures. Viacom's content reaches over 520 million households worldwide in over 160 countries and territories. In 2005 Viacom became a stand-alone public company when it separated from CBS (CBS). In 2009 the company earned $13.6 billion in revenues, a decrease of 7.4% from 2008.
Viacom operates through two separate business segments in the media industry. The first is their media networks segment which includes television networks as well as digital properties both domestic and international. The second business segment is known as Filmed entertainment and is responsible for the production, promotion and distribution and licensing of feature films.
Viacom's media networks segment controls over 150 television channels and more than 300 digital properties, which include online, broadband and mobile television services. The media networks segment generates revenue from three sources: The sale of advertising time on cable and digital networks, from fees that are payed to cable network television operators and satellite television operators and other distributors and finally ancillary revenue which includes the sale of consumer products including video games, as well as the licensing of its content to third parties. In 2009 the media networks segment was responsible for $8.29 billion in revenues earned.
The filmed entertainment segment is responsible for the production, financing and distribution of motion pictures. Viacom's filmed entertainment segment owns and operates Paramount Pictures, Paramount Vantage, Paramount Classics, DreamWorks Pictures, MTV Films and Nickelodeon movie brands. Films are generally released in theaters in the United States and abroad and then released to DVD and licensed to Video-On-Demand distributors and other third parties for further distribution. All revenues from these various forms of distribution are recorded under the filmed entertainment segment. In 2009, filmed entertainment earned $5.48 billion in revenue and increase of $551 million, or 10.1%, from 2008. The process of creating, releasing and later licensing filmed entertainment is broken down into four segments that create different revenue streams. These segments are home entertainment, television licensing and ancillary revenues.
Viacom competes directly with other major media conglomerates including Time Warner (TWX) and Walt Disney Company (DIS). While Viacom's revenues and market cap are significantly smaller than those of its competitors it does maintain an advantage in operating margin.
The below table shows the 2009 box office revenues for the major American film studios along with their market share. Warner Bros. is the industry leader bringing in $2.1 billion in revenue from the box office and controlling 19.9% of the market share.
|Studio||2010 Box Office Revenue ($millions)||2010 Market Share|
|Sony / Columbia||1,456.2||13.7%|
|20th Century Fox||1,394.5||13.2%|