Viacom Sees Firsthand Now Is Not Really a Great Time to Be In the Cable TV Business (Network Series)

Shari RedstoneThe Hollywood Reporter

And now we head into the home stretch, with our final four weeks of this series taking a look at the various cable conglomerates. Seems appropriate to start with Viacom, which has been in the news plenty thus far this year, but for all the wrong reasons.

Generally speaking, you want any news made by the company to be in regard to the product it’s providing or the work it’s doing, and ideally, you’d like that to be positive. Viacom, though, has been dealing with the soap opera of who will be running it and the mental condition of its 93-year-old chairman, Sumner Redstone, who might actually be incompetent but was not ruled thus by the court, which led to the ouster of embattled CEO Philippe Dauman and the rise of Redstone’s daughter Shari, now in a place of power in the company. This, after Dauman had overseen a precipitous drop in the company’s value over the past two and a half years, from a high of more than $88 per share in July of 2014 to the $37 and change where it has been trading of late.

You don’t need to be good at math to see that this is more than a 50 percent drop, from a market cap of over $37 billion to one just over $15 billion, which makes one wonder why it took so long to get rid of Dauman in the first place. In the long-running court case that was finally resolved in August, Shari Redstone achieved almost total victory, but at the cost of months of expensive litigation and debilitating paralysis at Viacom, which could really do nothing as the company’s stock tumbled. Now, as she prepares to replace a majority of Viacom’s directors with people of her own choosing (she has already named five new directors), she has now gained unfettered control of her father’s vast media empire.

The thing is, while Viacom owns a good chunk of real estate in the cable market, that real estate is progressively losing its value. Just as the company’s stock price has fallen so far, so has the cable industry. If we’ve learned anything over the last couple months here, it’s that the viewership numbers simply aren’t what they used to be, and the key to survival is to either find a way to counteract that or, if that fails, depend more and more on the internet to supplement those numbers and add to the bottom line.

Interestingly, a good number of the Viacom cable properties — operated under the umbrella of the Viacom Media Networks — are the very ones that used to draw so many of the younger viewers who have now deserted them and thus put the company into this fix. The roster includes MTV, VH1, Comedy Central, Spike, CMT, TV Land, Logo, BET, and the various Nickelodeon networks. At least a few of those were made as big as they used to be because of the millions of young viewers they attracted, but those same viewers have now aged out of the desired demographic, and whereas for years they were replaced by the next generation, that generation is now getting much more of its entertainment online.

Teen WolfMTV

Of course, this is why MTV, for one, has put so much energy into its website and the traffic driven there, but it also means less original programming for the actual television networks in question. Staying with MTV as a perfect example, it was somewhat late to the game in creating original, scripted programming, though it was searching for it as long as 15 years ago, it just couldn’t decide how it wanted to proceed. Sure, there was animated fare and an occasional attempt at a drama series here and there, but nothing that really grabbed attention. Reality series were around for years, but that also doesn’t necessarily get you the respect you might be seeking, especially in the 21st century. Now, the network has one hit show in its dramatic reimagining of the ‘80s Michael J. Fox film Teen Wolf, currently in its final season, and some question marks, like Mary + Jane and the brand new Sweet/Vicious, which just premiered this week.

No one is going to suggest that creating quality scripted programming is easy going, because 75 years of the television business has proven that this is certainly not the case. It’s especially tricky when a given network is producing so little of it, therefore increasing the level of difficulty by needing to get these few entries right. VH1, for instance, barely does any scripted work at all and instead focuses on reality programming, including the semi-brilliant (in concept, at least) Martha & Snoop’s Potluck Dinner Party (starring Martha Stewart and Snoop Dogg, yes really), which was recently renewed for Season 1 . That’s fine if you’re going for that, and in this increasingly difficult world, each network has to find its own voice.

Spike is a perfect example of this, as it spent years catering to its predominantly young, male audience with re-runs and reality shows, with one exception being the unexceptional raunchy college football comedy Blue Mountain State. When middling ratings killed it after three seasons, there wasn’t a whole lot else in the holster. Spike simply found that it wasn’t cost effective to develop its own material like that, a decision that it has, interestingly, changed in the years since, as it’s trying to capture some of AMC’s The Walking Dead audience by putting a 10-episode series based on the Stephen king novel The Mist on the air in 2017.

And therein lies the solution, to some extent. Spike is taking the risk of putting so much energy and money into a project like this because it knows that, in this age of overwhelming amounts of content, a network has to create something that will draw attention. BET, for instance, is actually very good at knowing what its audience wants, with shows like Being Mary Jane, with Gabrielle Union, and the Kevin Hart-led parody, Real Husbands of Hollywood.

Drunk HistoryComedy Central

Likewise, Comedy Central continues to air South Park, now somewhat astonishingly in its 20th season, as well as the hit comedies Broad City, Workaholics, Drunk History, and Another Period, along with its late night staples The Daily Show and Chris Hardwick’s @midnight, though the failure of Larry Wilmore’s The Nightly Show as a replacement to Stephen Colbert’s Colbert Report was a rather large disappointment. These shows — as well as the now gone but not forgotten Key and Peele and the gone but might someday return Inside Amy Schumer — all garner solid numbers in the key young demographics that each and every network chases, so it’s not like the news is all bad.

Three specialized networks focus on very specifically targeted audiences. CMT focuses exclusively on country music and lifestyle, TV Land appeals to fans of the medium’s past (with some original programming mixed in here and there, like the current hit Younger), and Logo focuses on the LGBTQ community. All three have small but relatively strong followings, but each is definitely on the smaller end of things.

Which brings us to Nickelodeon, perhaps the largest part of Viacom’s media operation, with five different networks under its particular umbrella, and one of its biggest issues. For years now, ratings across all of the formats have been cratering, primarily because of two factors: the generic quality of its programming, on the one hand, and the self-same internet on the other. I can offer anecdotal evidence of the latter, as I have an eight-year-old niece and spend a fair amount of time under the same roof as a seven and a half-year-old, and neither spends a moment of their day watching anything on Nickelodeon, because they use all of their screen time on an iPad either playing Minecraft, consuming documentaries about nature and animals, or watching/playing/hunting Pokémon. Ask these children, formerly the younger end of the network’s cornerstone audience, about Nickelodeon and they’ll look at you with the same amount of confusion as if you’d asked them to explain thermodynamics. It’s simply not in their frame of reference or understanding, and that’s a big problem, especially since the kids you counted on to watch your shows are no longer doing so because, as with MTV, they have aged out of them.

The solution to that is surprisingly simple, and it can come from one of the sister networks. See what BET is doing, and mimic it. Rather than assume that what has always worked will continue to do so, instead take the temperature of the audience you want to be reaching and find out what kind of programming you can offer them to keep them coming back (Amazon does this rather well, too). This might seem like a big change, but consider that, after years of churning out more and more of the same old same old, that “high concept” stuff that tends to recycle jokes, storylines, and themes to increasingly diminishing returns, this is probably the best bet you have to turn things around and reverse the trend of lower and lower ratings for your programming.

Fairly OddparentsNickelodeon

At the very least, MTV is making an effort to stake its claim on the digital side, with an active presence online that includes mobile and app experiences that recently averaged 17.2 million monthly visitors and around 38 million content video streams per month. Users spent an average of about 102 million minutes per month with MTV-branded apps, so there’s definitely action there, as well. That is the future, after all, being able to get your viewership to follow you away from the television set, especially since, more and more, the TV is not necessarily where the content is being viewed.

That is not to say that MTV, or any of its sister networks, have their own streaming service. Like a lot of basic cable networks, cord cutters can watch any of these by subscribing to Sling, where for between $20 and $40 per month (depending on the package), you can watch most cable networks without having to deal with a cable company (instead, you can deal with the Dish Network, which owns Sling).

It’s tough to target just how Viacom can turn things around, but even if there was a concrete method to do so, it’s not going to be easy, simply because of the nature of the cable business. If, say, Viacom owned the means of getting its networks to the folks watching on the interwebs, that might help, but sadly it doesn’t. Instead, it has to hope that Shari Redstone and her new board of directors can make changes that will help matters, and that both MTV and Nickelodeon can once again draw the viewership numbers it used to, and that BET and the smaller networks under the umbrella keep drawing the viewers they have now, and … well, it’s a lot.

Viacom isn’t going out of business any time soon, but neither is it going to be mentioned in the same sentence as, say, NBCUniversal and its Comcast overlords which, at the moment, is roughly 11 times its size (seriously). But we’ll get further into that next week, when it’s NBCUni’s turn in the crosshairs.

For more entries in our network series, click here.


ProfilePic adjusted 2 is a filmmaker and journalist who has spent close to two decades working in and writing about Hollywood. Feel free to send him a tweet at @neilturitz. He’ll more than likely respond.

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Still quiet here.sas

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