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Viacom
Basic
Info:
Profile:
- Viacom Inc. is
a diversified
worldwide entertainment company with operations in various segments,
including cable networks, television, Infinity, entertainment and
video. The cable networks segment operates MTV Music Television, Showtime, Nickelodeon/ Nick at Nite, VH1 Music First, MTV2 Music Television, TV Land, TNN: The National Network (now
called SpikeTV), CMT: Country Music
Television, the BET Cable Network
and BET Jazz: The Jazz Channel,
among other program services. The television segment consists of the CBS and UPN
television networks, King World
Productions and Paramount
Television. It operates Infinity
as radio and outdoor segments.
The entertainment segment includes Paramount Pictures,
the publishing and distribution of consumer books and multimedia
products, movie theater and music publishing operations and Paramount Parks, which owns
and operates five theme parks (Canada's Wonderland Carowinds,
Great America, Kings Dominion, Kings Island,and Star Trek: The Experience) and
a themed attraction in the United States and Canada. The video segment
consists of an interest in Blockbuster
Inc. *source Yahoo.com
- Viacom is
definitely a conglomerate. Viacom has its hands in so many different
fields, and businesses that it is astounding.
- Viacom is
unquestionably
involved with countries around the world. They demonstrate
globalization in a company to the fullest. They are involved with
numerous countries around the world.
- Viacom is
certainly
horizontally integrated, because it owns several companies in the same
business, for example they own several different music channels, such
as: MTV, BET, and VH1.
- Viacom is also
undeniably vertically integrated. They are involved in several
different aspects of related businesses. This is especially apparent in
their ownership of Paramount, where they control the publishing and
distribution of their products among other things.
- Viacom does in
fact exhibit
media synergy, there is a lot of cooperation among the
subsidiaries. Many of the TV stations often play the other TV
stations programs.
Financial
Data:
- Annual Income: 2002
revenues:24.6 billion 2002 operating income: $4.6 billion
- Number of Employees:
122,770
- Ticker Symbol: RBV VIA
VIAB
- Stock Exchange:
NYSE
- Current Stock Information: RBV,VIA
, VIAB
- SEC
10-K
- I think the company has been having very
unstable, and even in recession, but I do believe that they appear to
be making quite the comeback and that it is in the road to
recovery.
History:
The Company was organized in Delaware in
1986 for the purpose of
acquiring the stock of a predecessor. In 1994, the Company acquired
Paramount Communications Inc. and Blockbuster Entertainment
Corporation. In August 1999, Blockbuster Inc. ("Blockbuster") (NYSE:
BBI) sold to the public approximately 17.7% of its common stock. The
Company, through its ownership of all of the outstanding shares of
Blockbuster Class B common stock, as of March 14, 2003, holds
approximately 80.4% of the total equity value in, and approximately
95.3% of the combined voting power of, Blockbuster.
On May 4, 2000, the Company
completed its merger with CBS Corporation ("CBS") for a total purchase
price of approximately $39.8 billion, which included the issuance of
approximately 836.5 million shares of Viacom Class B Common Stock (the
"Viacom/CBS Merger"). As a result of the Viacom/CBS Merger, the Company
acquired an approximate 64.2% equity interest in Infinity Broadcasting
Corporation ("Infinity"). On February 21, 2001, Infinity merged with
and into a wholly owned subsidiary of the Company (the "Infinity
Merger"). In connection with the Infinity Merger, the Company issued
approximately 232 million shares of Viacom Class B Common Stock.
On January 23, 2001, the
Company completed its acquisition of BET Holdings II, Inc., which
operates the BET CABLE NETWORK and BET JAZZ: THE JAZZ CHANNEL, among
other services, for a total purchase price of approximately $3 billion,
which included the net issuance of approximately 43 million shares of
Viacom Class B Common Stock.
On May 15, 2002, the Company
acquired the assets of KCAL-TV for approximately $650 million in cash.
As of March 14, 2003,
National Amusements, Inc. ("NAI"), a closely held corporation that owns
and operates approximately 1,400 movie screens in the U.S., the U.K.
and South America, beneficially owned Class A Common Stock of the
Company representing approximately 69% of the voting power of all
classes of the Company's Common Stock, and approximately 11% of the
Company's Class A Common Stock and Class B Common Stock on a combined
basis. Owners of the Company's Class A Common Stock are entitled to one
vote per share. The Company's Class B Common Stock does not have voting
rights. NAI is not subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended. Sumner M. Redstone, the
controlling shareholder of NAI, is the Chairman of the Board and Chief
Executive Officer of the Company.
*source SEC 10K
Timeline
of Company
Officers:
- Chairman
& CEO:
Sumner M. Redstone
 .
- Sumner M. Redstone is
Chairman of the Board and Chief Executive Officer of Viacom Inc. Under
his leadership, Viacom has become one of the world's largest
entertainment and media companies, and a leader in the production,
promotion, and distribution of entertainment, news, sports, and music.
Mr.
Redstone has been Chairman of the Board of Viacom Inc. since June 1987,
when National Amusements, Inc. acquired a controlling interest in the
New York-based company. In January 1996, Mr. Redstone took on
additional responsibilities as Chief Executive Officer of Viacom. Mr.
Redstone has been Chairman of the Board of National Amusements since
1986, and Chief Executive Officer of National Amusements since July
1967. He was President of National Amusements from July 1967 to
December 1999.
Mr.
Redstone has played a significant role in the affairs of the
entertainment and communications industries. He has served as Chairman
of the Board of the National Association of Theatre Owners, and
currently is a member of the Executive Committee of that organization.
Before that, he was President of the Theatre Owners of America, which
was then the major trade association representing motion picture
exhibitors. He also is a member of the Advisory Council for the Academy
of Television Arts and Sciences Foundation and on the Board of Trustees
for The Museum of Television and Radio.
Mr.
Redstone's education began at Boston Latin School, where he graduated
first in his class. In 1944, after studying for two and one-half years
at Harvard College, he was awarded a degree by Harvard University's
Special Board of Overseers. In 1947, Mr. Redstone received his LL.B.
from the Harvard University School of Law.
Throughout
his career, Mr. Redstone has received many awards, including the Robert
F. Kennedy Memorial Ripple of Hope Award, the International Radio and
Television Society Gold Medal Award, and National Conference of
Christians and Jews Humanitarian Award, all of which were awarded in
1998. (*source: www.surferess.com)
Mr. Redstone is currently seventy-nine years of age with a salary of
$20.9 million. According to Forbes.com his net worth is currently $8
billion. (Forbes.com)
- President & COO:Mel
Karmazin
- Mel Karmazin became President
and Chief Operating Officer of Viacom in May 2000, upon the merger of
Viacom and CBS. He had served as President and Chief Executive Officer
of CBS Corporation since January 1999. Mr. Karmazin, who serves on the
Viacom Board of Directors, is responsible for overseeing all of
Viacom's operations. Viacom is one of the world's largest entertainment
and media companies, and a leader in the production, promotion and
distribution of entertainment, news, sports, music and comedy. The
company's properties include CBS, MTV, Nickelodeon, VH1, BET, Paramount
Pictures, Viacom Outdoor, Infinity Broadcasting, UPN, Spike TV, TV
Land, CMT: Country Music Television, Comedy Central, Showtime,
Blockbuster and Simon & Schuster .Mr. Karmazin had been President
and Chief Operating Officer, CBS Corporation, from April 1998 to
January 1999. He joined CBS in January 1997 as Chairman and Chief
Executive Officer, CBS Radio, through a merger of Westinghouse/CBS and
Infinity Broadcasting, where he had served as President and Chief
Executive Officer from 1981 until Infinity became a wholly owned
subsidiary of Viacom in February 2001. He was named Chairman and Chief
Executive Officer, CBS Station Group (Radio and Television), in May
1997. Mr. Karmazin serves on the Board of Directors of Westwood One,
Blockbuster and the New York Stock Exchange, and is Vice Chairman of
the Museum of Television and Radio. He was inducted into the
Broadcasting Hall of Fame, and has received the National Association of
Broadcasters National Radio Award and the IRTS Gold Medal Award. He is
a graduate of Pace University.(*source:viacom) Mr Karmazin is
fifty-nine years of age, and makes $20.2 million. (*source: Yahoo!Finance)
Plans:
Key
Competitors:
The Company competes with many different types of
entities and media in various markets. Its business segments generally
compete with similar businesses of other diversified international
entertainment companies such as AOL Time
Warner, News
Corporation, Sony
Corporation, The
Walt Disney Company and Vivendi
Universal.
Cable Networks
MTV
Networks. MTVN competes for advertising revenue
with other basic cable and broadcast television networks, radio, online
and print media. For basic cable television networks such as the MTVN
services, advertising revenues derived by each program service depend
on the number of households subscribing to the service through local
cable operators and other distributors, in addition to household and
demographic viewership as determined by research companies such as
Nielsen Media Research. MTVN services compete with other cable services
and broadcast television for the acquisition of popular programming.
MTVN's strategy is generally to differentiate its services to provide
advertising buyers with an efficient way to reach viewers in particular
demographic categories. For example, Nickelodeon generally provides
advertisers with an efficient way to reach viewers 2-11 years old.
Programming blocks for children are currently exhibited on a number of
U.S. broadcast television networks, including, among others, "Fox
Kids," "Kids' WB" and a Saturday morning block on ABC, all of which
compete with NICKELODEON for advertising revenue. In addition to the
foregoing, there are also a number of other U.S. cable television
program services specifically targeting children-oriented programming,
including the Cartoon Network, the Disney Channel and the ABC Family
Channel. In addition to the competition referred to above, NICKELODEON
competes internationally with other television program services and
blocks targeted at children for distribution by cable, satellite and
other systems, and for distribution license fees and advertising
revenue. In the United States, Nickelodeon is a significant seller of
advertising oriented toward this demographic.
MTVN services also compete
with other program services for channel space and compensation for
carriage from cable television operators, DTH and other multichannel
distributors. In general, the principal focus of competition for
distribution comes with respect to MTVN's services that are not already
distributed within a particular cable or DTH system. For such program
services, distributors select services based on various considerations,
including amounts paid by programmers for launches, subscription fees
payable by distributors, and appeal to the distributors' subscribers,
among others.
Certain major record
companies operate music-based program services outside the U.S.,
including, but not limited to: Channel V, which is jointly owned and
operated in Asia and Australia by Star TV and four major record labels;
and Viva and Viva 2, German-language music channels distributed in
Germany and owned in large part by four major record labels. These
music-based program services, as well as general entertainment and
other program services, compete with MTVN's program services for
distribution by cable, DTH and other systems, and for distribution
license fees and advertising revenues.
BET: Black Entertainment
Television. BET properties generally face
competition for advertising revenue from other
African-American-targeted media, including other cable networks that
target BET's African-American audience; African-American-oriented radio
stations; magazines such as Ebony, Black Enterprise, Jet and Essence;
and black-oriented television. More specifically, the BET CABLE
NETWORK, BET JAZZ, BET GOSPEL and BET HIP HOP compete with other cable
programming services for available channel space and for subscriber
fees from cable, DTH and other distributors. Consolidation among
distributors has increased the intensity of this competition. The BET
CABLE NETWORK and BET JAZZ also compete for advertising revenues with
other national cable programming services, broadcast networks, local
over-the-air television stations, broadcast radio and print media. In
addition, BET EVENT PRODUCTIONS competes with other event production
companies for events, venues, musical artists and sponsorship and
advertising revenues. BET BOOKS competes with other publishers
generally, and particularly with those publishers that target its
specific audience.
For 2002, according to the
Nielsen Media Research report (December 31, 2001—December 29, 2002),
the Company's basic cable networks had the following percentage shares
in the total day basic cable networks category: approximately 36% (for
viewers ages 2-24), 31% (for viewers ages 2-34), 25% (for viewers ages
12-34), and 18% (for viewers ages 18-49).
Showtime Networks
Inc. Competition among premium subscription
television program services in the U.S. is primarily dependent on: (i)
the acquisition and packaging of an adequate number of recently
released theatrical motion pictures and the production, acquisition and
packaging of original motion pictures, original series and other
original programs; and (ii) the offering of prices, marketing and
advertising support and other incentives to cable, DTH and other
distributors for carriage so as to favorably position and package SNI's
premium subscription television program services to subscribers. HBO is
the dominant company in the U.S. premium subscription television
category, offering two premium subscription television program
services, the HBO service and Cinemax. SNI competes with HBO but has a
significantly smaller share of the premium subscription television
category. Starz Encore Group L.L.C. owns Starz!, another premium
subscription television program service, which features recently
released theatrical motion pictures and competes with SNI's and HBO's
premium program services.
Television
The television broadcast
environment is highly competitive. The principal methods of competition
in broadcast television are the acquisition of popular programming and
the development of audience interest through programming and promotions
in order to sell advertising at profitable rates. Broadcast networks
like CBS and UPN compete for audience, advertising revenues and
programming with other broadcast networks such as ABC, FOX, NBC and WB,
independent television stations, basic cable program services as well
as other media, including satellite television services,
videocassettes, DVDs, print and the Internet. In addition, the CBS and
UPN television networks compete with these other broadcast networks to
secure affiliations with independently owned television stations in
markets across the country, which are necessary to ensure the effective
distribution of network programming to a nationwide audience. According
to Nielsen Media Research, for the broadcast television primetime
daypart for the period September 23, 2002 to March 16, 2003, CBS
television network secured the #1 position for total viewers and
strengthened its #2 position for key adult viewers ages 25-54.
Television stations compete
for programming, for audiences and for advertising revenues with other
stations in their respective coverage areas and, in some cases, with
other station groups for programming, and in the case of advertising
revenues, with other local and national media. The owned and operated
television stations' competitive position is largely influenced by (i)
the strength of the CBS and UPN television networks, and, in
particular, the viewership of the CBS television network in the time
period immediately prior to the late evening news; (ii) the quality of
the syndicated programs and local news programs in time periods not
programmed by the network; and (iii) in some cases, by the quality of
the broadcast signal.
Because an extended
conversion to digital television broadcasting has begun, current and
future technological developments may affect competition within the
television marketplace. Television broadcasters will continue to
operate their current analog stations while gradually building and
operating digital facilities concurrently on separate channels. In the
U.S., the transition period from analog to digital transmission is
conditionally set to end in the year 2006, at which time, subject to
the extensions that the FCC is permitted by statute to grant upon the
request of any television station if certain levels of digital
television penetration have not been met in that station's market,
current rules would require broadcastersto return one of their two
channels, allowing that spectrum to be recovered for other uses.
As a producer and
distributor of programming, the Company competes with studios,
television production groups, and independent producers and syndicators
such as Disney, NBC, Sony, Universal and Warner Bros. to sell
programming both domestically and overseas.
Infinity
The Company's radio stations
and outdoor advertising properties compete for audience, advertising
revenues and programming directly with other radio stations and/or
outdoor advertising companies such as ABC Radio, Cox Radio, Emmis
Communications, Entercom, Lamar Advertising, Radio One and Clear
Channel Communications, as well as with other media, such as broadcast
television, newspapers, magazines, cable and satellite television, the
Internet and direct mail, within their respective markets. The growth
of Internet radio could bring increased competition, in part depending
on the royalty rates for music used on Internet radio set by Copyright
Arbitration Royalty Panels and/or through negotiations with
rightsholders.
The radio and outdoor
advertising industry is also subject to competition from new media
technologies that are being developed or introduced, such as the
delivery of audio programming by cable television systems, by satellite
and by terrestrial delivery of digital audio radio services ("DARS").
Two satellite-delivered audio programming services, Sirius and XM
Satellite Radio, are now operational, each providing approximately 100
channels of pay audio services. While primarily pay services,
advertising time is currently being sold by XM Satellite Radio on some
of their channels and no regulation prohibits Sirius from adding
advertising as well. The FCC also has a pending proceeding which
contemplates the use of digital technology by existing AM and FM radio
broadcast stations to both improve sound quality and provide spectrum
for enhanced data services to complement the existing programming
service and provide new business opportunities for radio broadcasters.
The FCC has authorized use of an in-band on-channel ("IBOC") digital
technology developed by iBiquity Digital Corporation on FM stations
full-time and on AM stations day-time only. The Company has tested the
IBOC technology on certain of its stations and licensed the technology
for use by several of its stations. The Company has an ownership
interest in iBiquity. The Company cannot predict the impact of new
media technology on its business.
INFINITY RADIO's aggregate
spot advertising sales revenues for its radio stations for 2002 in each
of the top five U.S. markets by metro area population were ranked
either #1 or #2, according to the 2002 Market Total Spot Performance
Summary of Miller, Kaplan, Arase & Co., LLP (for the New York, Los
Angeles, San Francisco and Dallas-Fort Worth markets) and the 2002
Cluster Radio Revenue Report of Hungerford Aldrin Nichols & Carter,
PC (for the Chicago market).
Entertainment
Theatrical Motion
Pictures. The Company competes with other major
studios such as Disney, Dreamworks, Fox, MGM, Sony, Universal and
Warner Bros. and independent film producers in the production and
distribution of motion pictures, videocassettes and DVDs. PARAMOUNT
PICTURES' competitive position primarily depends on the quality of the
product produced, its distribution and marketing success, and public
response. The Company also competes to obtain creative talent and story
properties which are essential to the success of all of the Company's
entertainment businesses.
Publishing. The consumer publishing business is
highly competitive and has been affected by consolidation trends.
Recent years have brought a number of significant mergers among the
leading consumer publishers. The book superstore remains a significant
factor in the industry contributing to the general trend toward
consolidation in the retail channel. There have also been a number of
mergers completed in the distribution channel. The Company must compete
with other publishers such as Random House, Penguin Group and Harper
Collins for the rights to works by well-known authors and public
personalities.
Parks. During the last four years, the regional
theme park industry has experienced increased consolidation. The
Company competes with other highly-capitalized, multi-park
entertainment corporations. In order to compete effectively, the
Company must differentiate its products through its access to
entertainment intellectual property and brands and by investing capital
to attract repeat customers. The Company believes that its intellectual
properties enhance existing attractions and facilitate the development
of new attractions, which encourage visitors to the PARAMOUNT PARKS
theme parks. The Company's theme parks also compete with other forms of
leisure entertainment.
Video
BLOCKBUSTER operates in a
highly competitive environment. The Company believes that BLOCKBUSTER's
most significant competition comes from (i) video stores and other
retailers that rent or sell movies and/or games and (ii) providers of
direct delivery home viewing entertainment.
Video stores and other
retailers that rent or sell movies include, among others, (i) local,
regional and national video and games stores; (ii) mass merchant
retailers such as Wal-Mart, Best-Buy and Target; (iii) toy and
entertainment retailers; (iv) supermarkets, pharmacies and convenience
stores; and (v) online retailers and mail order services. The Company
believes that the principal factors that BLOCKBUSTER faces in competing
with video and game stores and other retailers are (a) convenience and
visibility of store locations; (b) quality, quantity and variety of
titles in the desired format; (c) pricing; and (d) customer service.
With the development of new
technologies, a competitive risk to BLOCKBUSTER's video store business
comes from direct broadcast satellite, digital cable television and
internet delivery. Direct broadcast satellite, digital cable and
"traditional" cable providers not only offer numerous channels of
conventional television, but they also offer pay-per-view movies which
permit a subscriber to pay a fee to see a selected movie. Because of
the increased availability of channels, direct broadcast satellite and
digital cable providers have been able to enhance their pay-per-view
business by (i) substantially increasing the number and variety of
movies they can offer their subscribers on a pay-per-view basis; and
(ii) providing more frequent and convenient start times for the most
popular movies. Pay-per-view allows the consumer to avoid trips to the
video store for rentals and returns of movies, which also eliminates
the chance they will incur additional costs for keeping a movie beyond
its initial rental term. However, pay-per-view also does not allow the
consumer to start, stop and rewind the movie or fully control start
times. As a result, some digital cable providers and a limited number
of Internet content providers have begun implementing technology
referred to as "video-on-demand," which technology transmits movies on
demand with interactive capabilities such as start, stop and rewind. In
addition, some cable providers are introducing subscription
video-on-demand, which allows consumers to pay a flat fee per month for
access to a selection of content with fast forward, stop and rewind
capabilities.
A competitive advantage that
the home video retail industry currently enjoys over most other movie
distribution channels, including pay-per-view, is the early timing of
the video retail "distribution window" (see "Viacom Business
Segments—Video"). Studio pricing for films that are released to home
video retailers has historically been based on whether or not a studio
desires to promote a film for both rental and sale to the consumer, or
primarily for rental, from the beginning of the home video distribution
window. Currently, substantially all DVDs are released at lower
sell-through prices, which mean prices that are low enough to allow for
an affordable sales price by the retailer to the consumer from the
beginning of the home video distribution window. This sell-through
pricing has accelerated consumer interest in the format but has also
served to increase competition from mass merchant retailers (see
"Viacom Business Segments—Video"). BLOCKBUSTER's business could be
negatively affected if the studios adversely change their distribution
windows; if sell-through pricing of DVDs results in consumer preference
for buying, rather than renting, movies and BLOCKBUSTER is unable to
increase rental market share, to replace profits from rentals with
profits from sales of sell-through product, or to otherwise positively
affect gross profits, such as through increased pricing or cost
reductions; and/or if new technologies become widely accepted by
consumers.
*source SEC 10K
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October 17, 2003
Jamie Barnes
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