Viacom is hoping that the Teenage Mutant Ninja Turtles will swing to the rescue of flagging ratings at its Nickelodeon network, even as the media group denied that digital platforms such as Netflix and other on-demand channels were cannibalising traditional viewing.
An improvement in the US advertising market and greater “affiliate” fees from cable operators and digital distributors helped the owner of Paramount, MTV and Comedy Central to overshoot analysts’ forecasts with 56 per cent growth in net income to $588m for the second quarter.
Analysts have been puzzled by a dramatic decline in viewing figures at Nickelodeon, where as many as a quarter of viewers have deserted long-running shows such as Spongebob Squarepants.
Tom Dooley, chief operating officer, said that a “strengthening in the overall tone of the ad marketplace” was helping to offset “rating deficiencies” and dismissed some analysts’ suggestions that on-demand viewing was to blame for the network’s decline.
“Netflix is present in less than a quarter of TV households,” he said. “I can tell you that the time spent on Nick content on Netflix is approximately 2 per cent of the time spend on our Nickelodeon [cable] channel… We are getting nice revenues through these [subscription video on demand] deals.”
This data, based on streaming data from Netflix itself, suggested on-demand had “minimal impact” on ratings weakness, which had more to do with “measurement issues” and the strength of competitive channels.
Figures released yesterday by Nielsen, which tracks US TV-watching habits, supported that view, showing that 98 per cent of American viewing occurs on the traditional TV set, with only modest increases in “timeshifted” or recorded TV, internet or mobile video.
To tackle the ratings problem, Nickelodeon is investing in developing more original content for the important autumn season, including a revival of the 1980s franchise Teenage Mutant Ninja Turtles, about which Mr Dooley said the company was “particularly excited”.
Philippe Dauman, Viacom chief executive, added: “In this age of time shifting and on-demand viewing across platforms, the value of fresh and original content is greater than ever.”
He said Viacom was upping investments in social networking applied to TV content and tablet viewing, which a Viacom study suggested had surpassed laptops as the “preferred second screen”.
Revenue growth from affiliates of 17 per cent was ahead of many analysts’ expectations, thanks to digital revenues, with the phasing of unnamed “product availability” likely to mean a dip in the current quarter compared to last year, with a return to double-digit growth in the September quarter.
At Paramount, the re-release of Titanic in 3D has generated more than $300m in box office takings, with new Katy Perry and GI Joe movies set for release later this year. Shares in Viacom were 3.2 per cent higher at $48.93 in late afternoon trading in New York.
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