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Now Showing at Viacom: Profits

By Brian R. Hook
October 24, 2003
I hardly ever watch CBS. It seems like the shows are geared for an older audience. I can't remember the last time I watched MTV. It is definitely geared toward younger folks. In fact, I can't think of any product produced by Viacom (NYSE: VIA) that I do watch on a regular basis. But that doesn't stop me from liking the company, because it continues to amaze me.


Despite a sluggish overall market in advertising during the third quarter, Viacom yesterday reported a 5% increase in revenues and a 9% pop in net income. Even better, free cash flow jumped from $214 million to $708 million.


Over the years, CEO Sumner Redstone has created a true media powerhouse. While others have struggled throughout the advertising downturn, Viacom has prospered. The company's chief operating officer, Mel Karmazin, seems to be a virtual sales machine who sees positive momentum in advertising revenue and a resurgence in both national and local ad markets. (If the past is any guide, of course, politicians are going to spend lots of money during the 2004 campaign season.)


Karmazin and Redstone have been known to squabble with each other over the years. They need to keep that to a minimum and focus on sales. As a pair they are unstoppable. Top line growth, bottom line growth, and strong free cash flow. What a combination! Now, that's entertainment.


Brian R. Hook, publisher at BizBlip.com, can be reached by email at brhook@bizblip.com
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I hardly ever watch CBS. It seems like the shows are geared for an older audience.

Survivor. 60 Minutes. NFL Football. CSI.

I can't remember the last time I watched MTV.

Yeah, me too. Of course there's Comedy Central, VH1, TVLand, Nickelodean, Showtime, BET and some others. And whether you watch them or not, you're sending Viacom money every month in your cable bill, because the program providers get an affiliate fee for every subscriber.

In fact, I can't think of any product produced by Viacom (NYSE: VIA) that I do watch on a regular basis.

Oprah Winfrey, Wheel of Fortune, Jeopardy? All the stuff on the History Channel produced by CBS News? Anything on UPN? The Dr. Phil Show? Everybody Loves Raymond? One of their hundreds of major market radio stations?

Maybe Lara Croft: TombRaider? How To Lose A Guy In 10 Days? Maybe Walter Issacson's biography of "Benjamin Franklin" from the publishing division? Maybe some of the billboards you drive by every day on your way to work? No? Do you rent any videos at Blockbuster?

Jeeze, you're tough.

Karmazin and Redstone have been known to squabble with each other over the years.

More than an understatement, it's like saying "People need food to survive."

Brian R. Hook, publisher at BizBlip.com, can be reached by email at brhook@bizblip.com

OK, I'm guessing you don't watch Oprah.
 
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