Having been at Viacom since 1997 and run MTV Networks International, Bob Bakish was made president and CEO of Viacom International Media Networks when the division was created at the start of the year. In that role he reports directly to Viacom president and CEO, Philippe Dauman, and is responsible for a huge portfolio including 64 MTV channels across 152 territories, 45 Nickelodeon channels across 112 territories and various BET, Comedy Central, VH1, TMF, Viva and Game One services around the globe.
Why rebrand MTV Networks International as Viacom International Media Networks?
Philippe Dauman consolidated all international networks activity into one unit. Philippe decided that and saw the benefits of scale and as VIMN we picked up responsibility for BET and channels around Paramount’s content.
A lot of people thought of us as MTV, but our bouquet is very large. We have, for example, been doing a lot of work around Comedy Central, which is the least-distributed of the historical brands.
We announced that we are bringing it to Latin America from January 1 and there will be additional announcements about new geographies soon.
But ‘MTV’ is one of the most famous brands around, why drop that and risk losing that cache and brand recognition?
There was certainly some emotion involved in the discussion, but at the end of the day we saw the logic in changing it.
The reality is that MTV is one of the world’s greatest entertainment brands – and so is Nickelodeon. But Viacom is not a consumer brand. It is a trade and, to some extent, a financial brand. Distributors and advertisers know what Viacom is. We’re not trying to make it a consumer brand, we are the international networks division of one of the largest entertainment companies in the world. ‘VIMN’ allows us to speak to the true breadth of the possibilities from a brand portfolio perspective.
Does the name change make it easier to roll out new channels, can we expect a lot of new launches?
I think so, because we now represent all of the brands in one place. Viacom is synonymous with a portfolio of world class brands. Whether it is those or new brands that we have created, we want a strong portfolio of world class entertainment networks.
One new brand created this year was Blink!, the female-skewing net launched in Poland. Why did you launch that and why did you form a joint venture with Endemol when you had the scale to do it alone?
We were looking at where there were opportunities to grow the portfolio and the research suggested an opportunity in this space. And, it’s not a JV with Endemol, it’s more a long-term output deal as they have a large library and there was an opportunity to build something around that. The research pointed to an opportunity to serve women with an entertainment, versus a self-help, channel.
Will it roll out beyond Poland?
Yes, we wouldn’t have done it if we thought it would be restricted to one territory. We operate brands on a global and pan-regional scale.
Has the multichannel business fundamentally changed in recent years? Is the mix of advertising and carriage fees different now for example and what opportunities are there for VIMN in the free-to-air TV space?
We like the multi-revenue stream business. The great thing about multichannel, and this was especially true early on, is the advertising and affiliate revenue. It is a different mix depending on the country and the market because some grew up in free-to-air and some are traditionally more affiliate fee driven.
As consumer behaviour and markets change, it does impact that revenue mix. It depends on how markets evolve. In Spain for example there has been an explosion in the growth of multichannel and digital terrestrial. We launched [Nickelodeon] on DTT just over a year ago and DTT does provide a different opportunity. We are also on DTT in Italy and have a slot on Freeview in the UK.
We also have a programme sales business and the advent of DTT has created an additional area that content sellers can benefit from.
That said, we have longstanding partnerships with pay TV platforms and we’re not in a rush to leave those behind. While there is an opportunity in DTT, we don’t have any strategy to become a free-to-air everywhere, but it does provide us with an opportunity.
What kind of opportunity does over-the-top TV present for a company like VIMN?
We have a large library and there is an opportunity to make content available to consumers that is not on linear air. We’re focused on creating holdback windows and creating differentiation between pay TV services and OTT. It is certainly incremental and not cannibalistic for us and we’re focused on preserving the health of the pay business while providing content to OTT services.
In the US, Viacom has been extremely protective of its content and has been involved in several high-profile court cases. Is there a different approach internationally?
No, there’s not a different strategy because we are, as a company, a content owner, an intellectual property owner and we need to see a return on our investment and on the use of our content. Where that is not the case, we have taken action.
Digital platforms do provide an opportunity and we put some content out there for free as part of a promotional strategy, but what we don’t do is let companies leverage our content to build their businesses [without paying for it].
Would you rather channel your content through your own digital services?
We will license content to OTT and other services, it’s not a case that we want to own the destination, but it is a question of us getting the right value for our content.
You have been very active in India with the creation of the Viacom 18 joint venture, how important is that market to VIMN and are you still in investment mode, or is it becoming a significant profit centre in its own right?
It is a very important market for us and fast-growing. We increased our participation circa 2007 when we created a 50-50 joint venture, Viacom 18, and launched Colors, which has been a great success, built on original programming. Frankly, the channel evolved faster and better than we had hoped.
We are ahead of our financial plan, but it is a competitive market and we need to expand our position. We will be launching a number of additional services in the market soon and growing the portfolio.
Looking at the distribution numbers, it seems that while subscriber numbers are up for most of your networks, MTV’s numbers are down in some places (MTV’s EMEA subscriber numbers were down 19.7 million year on year in 3Q11). As a channel, has it reached maturity and if so, where does the growth come from?
The reality is that some networks are more fully distributed than others. MTV is the most distributed, Nick is in the middle and growing and Comedy Central is the smallest of our big brands.
But look at MTV, it is fully penetrated in terms of multichannel, but there are numerous additional opportunities and revenue streams. For example we have six MTV mobile services and another one that we are about to announce, we just did a big advertising deal with Volkswagen for the launch of the new Beetle that involved linear TV, multiplatform services and events. It might look like it is fully penetrated, but there are a lot of opportunities left.
VIMN’s growth has been largely organic, does M&A fit into your plans?
Mergers and acquisitions are often more difficult than they seem in terms of finding the right fit and integrating in a way that creates value. We have looked and there is not that much out here that makes sense and we see a significant opportunity to grow our brands organically.
You were recently linked to Entertainment One, was there any truth in that?
When sellers are selling it makes sense to throw Viacom’s name in there. They want to get the maximum price for their asset and create a competitive auction and the idea there are multiple bidders. Sometime when we are named it is right, other times not. We do look at opportunities, if something is compelling we will look at it, but I don’t think we will do a lot of acquisitions.