Viacom Sets Radical Revamp of Cable Operations, Adapting to Skinny-Bundle Era
Viacom unleashed a slew of changes for its cable operations on Thursday, all designed to focus the conglomerate’s resources on six core channels that Viacom CEO Bob Bakish hopes will be a must-have for any pay-TV bundle.
In designating a half-dozen of Viacom’s 25 cable channels as “the flagship six,” as Bakish called them, the company is acknowledging the change in the pay-TV marketplace that has put Viacom at a disadvantage because of the size of its portfolio. Bakish, who formerly ran Viacom’s international networks division, on Thursday outlined a vision to investors that the U.S. pay-TV arena, which is undergoing radical changes of its own, will become more like Europe and the U.K. in offering consumers flexibility to buy themed packages of channels — entertainment, news, sports, etc. — rather than big catch-all bundles.
Before that happens, however, Viacom’s leaders have work to do to revitalize channels that have seen significant losses in ratings and overall subscribers.
“From my perspective Viacom needs focus and direction — that’s how we’ll make progress,” Bakish told Variety.
The decision to rebrand Spike TV as the Paramount Network in early 2018 is an effort to craft a broad-based general entertainment channel to complement a portfolio that covers kids (Nickelodeon, Nick Jr.), younger viewers (MTV, Comedy Central) and African-Americans (BET).
With all of the changes, Bakish is not vowing to increase content spending for the six core brands. “I call it a remix,” he said of resources and development spending. “It had been a very democratic approach (in the past) — lots of the smaller networks got a lot of resources. It’s about prioritization going forward.”
Bakish said Viacom’s content spending for the cablers has grown at high single digits for at least a few years, despite the perception that the company had not been investing as much in content creation as its media rivals. The investment is there, it just needs to be channeled in a more effective way.
The flagship six brands were selected for two primary reasons: all of those channels have a global presence and all of them have potential to develop film franchises with Paramount, as well as digital and live-entertainment offshoots. The tighter integration of film and TV is the cornerstone of the new “holistic” approach to management that Bakish talked up to investors Thursday after Viacom released fiscal first quarter earnings that included…