Viacom to Regroup, Focus on Six Key Channels

02.08.2017

Ahead of its earnings report on Thursday, Viacom CEO Bob Bakish will tell shareholders that the company is narrowing its focus to six key channel brands - Nickelodeon, Nick Jr. MTV, Comedy Central, BET and Spike - according to the Wall Street Journal. Viacom's board already has approved the plan.

One of those brands, Spike, will be rebranded to the Paramount Network, reported the Hollywood Reporter on Wednesday. Kevin Kay will remain the head of the network, with the rebrand expected to launch in early 2018.

Meanwhile, some of Viacom's smaller cable networks, such as TV Land and CMT, will likely see their budgets decline as Viacom shifts its attention to assets it sees as more key.Â

"We must do everything we can to keep [our brands] strong and distinct as audiences fragment and content options proliferate," Viacom CEO Bob Bakish told shareholders at the company's annual meeting on Monday, reported the WSJ.

The move is the first major change since Bakish was named permanent CEO in December, and Viacom decided in December not to pursue a merger with CBS. National Amusements - which is controlled by Sumner Redstone and his daughter, Shari - owns 80% of both companies but they are operated and publicly traded separately.

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Focusing more on improving value at these six core networks is intended to make it easier to do distribution deals and keep networks on cable and satellite services. With the onset of cord-cutting and streaming, distributors are less inclined to acquire all of a programmer's networks. Instead, distributors, like consumers, would prefer to pay for only the channels they feel attracts audiences and advertisers.Â

Through the years, the cable business has been built on this practice of bundling, which forced operators to pick up smaller networks in order to get bigger ones. But with consumers forcing that bundle apart, distributors are becoming more selective.Â

Moreover, Viacom is rethinking its digital distribution strategy and whether its channels should be available on streaming networks. Viacom's board is concerned that making its networks available on services such as Hulu are quashing ratings and hurting the company's relationships with pay-TV distributors, said the WSJ.

Another question expected to be addressed on Thursday is what Viacom's plans are for its movie studio, Paramount Pictures, and whether Brad Grey will still run it, reported the Hollywood Reporter.

Bakish also has let go of some key executives, such as Doug Herzog, who headed Viacom's music and entertainment group, and named others to new posts. In January, Bakish named Sarah Levy chief operating officer of a newly formed Global Entertainment Group that includes MTV, Comedy Central, VH1, Spike, CMT, TV Land, Logo and Viacom International Media Networks. However, the plans for networks not among the key six - VH1, CMT, TV Land and Logo - remain to be seen.

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