On January 26, 2016, Viacom (VIAB) announced that its media property, Nickelodeon, would combine with the NFL (National Football League) to produce NFL-themed content, including an NFL FLAG Championship special, a music video, and daily reports from the NFL Experience.
Viacom’s Keith Dawkins, executive president of Nicktoons and TeenNick, stated, “We will leverage the power of the Nickelodeon and NFL brands to put kids and families at the center of this exciting multiplatform event.”
The company is increasing its focus on original programming. It’s also increasingly investing in original content. Another Viacom network, Comedy Central, has ten new originals in the pipeline. The company is also developing short-form content for platforms such as Snapchat.
As the chart above indicates, Viacom’s major revenue components in fiscal 2015 were advertising, affiliate fees, and feature film. They accounted for 38%, 37%, and 20% of revenue share, respectively.
Distribution agreement with AT&T and Hulu
Last year, AT&T (T) entered into a multiyear agreement with Viacom. Viacom will continue to provide programming for AT&T’s U-verse television and DIRECTV subscribers.
As a result of these distribution agreements with AT&T and Hulu, Viacom expects its domestic affiliate fee revenue to grow in the high single-digits in fiscal 2016.
In fiscal 2015, Paramount Studios did not have many films in the pipeline. Viacom intends to remedy that and plans to have fifteen movies in the pipeline in fiscal 2016.
Viacom expects the profit from Paramount Studios to be reflected in its results in the latter half of fiscal 2016 due to three summer movie releases, including Teenage Mutant Ninja Turtles 2 and Star Trek 3.
Paramount Television produces original programming for television and SVOD (subscription video on demand) platforms such as Netflix (NFLX). The company expects to generate long-term value from Paramount Television.
Viacom launched Play Plex, a TV Everywhere product, last year. The branded apps in this suite will be customized for every country where Play Plex is launched. Play Plex is a mobile app suite designed for Android (GOOG) and iOS-based (AAPL) devices. It’s expected that Viacom Play Plex will offer a direct-to-consumer option in the future. It will be similar to Discovery Communications’ (DISCA) Dplay suite of mobile apps.
Viacom expects Play Plex to strengthen its brand and provide it with good monetization opportunities in international markets. Viacom is working closely with its distribution partners in international markets.
Viacom accounts for 0.16% of the iShares Russell 1000 Growth ETF (IWF). For an investor interested in exposure to the computers sector, IWF has 5.7% exposure to the sector.