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Viacom operates through two separate business segments in the media industry. andThe 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 2007 the media networks segment was responsible for $8.10 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 2007 filmed entertainment earned %5.48 billion in revenue and increase of $1.2 billion, or 28%, from 2006. The process of creating, releasing and later licensing filmed entertainment is broken down into four segments that create different revenue streams. These segments are home entertainment, television licensing and ancillary revenues.
|First Quarter||Freedom Writers|
|Reno 911: Miami|
|Black Snake Moan|
|Blades of Glory|
|Year of the Dog|
|A Mighty Heart|
|Into the Wild|
|Fourth Quarter||The Heartbreak Kid|
|Things We Lost in the Fire|
|Margot at the Wedding|
|Sweeney Todd: The Demon Barber of Fleet Street|
|There Will Be Blood|
|No Country for Old Men|
|DreamWorks Animation Releases||Shrek the Third|
|Source: Annual Report.|
Viacom competes directly with other major media conglomerates including Time Warner (TWX) and Walt Disney Company (DIS). The below table compares Viacom's revenues, market capitalization and operating margin with both Time Warner and Disney. While Viacom's revenues and market cap are significantly smaller than those of its competitors it does maintain an advantage in operating margin.
|Company||Revenues ($ billions)||Market Capitalization ($ billions)||Operating Margin|
|Viacom Inc. (VIA)||$13.42||$25.17||21.87%|
|Time Warner (TWX)||$46.48||$51.53||18.78%|
|Walt Disney Company (DIS)||$36.38||$58.83||19.63%|