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TIS 2019: Bakish Mends Fences With Small Cable

Chicago -- The same day that Viacom announced a comprehensive carriage renewal with the National Cable Television Cooperative, CEO Bob Bakish took the stage at The Independent Show Tuesday with a message that many small operators may not have been expecting to hear from a programmer -- let’s work together.

Bakish, during a Q&A with NCTC executive vice president, programming Judy Meyka, hit all the right buttons, telling small operators that while their past relationship may have been testy, Viacom under his watch is ready, willing and able to work with distributors to drive growth.

Bob Bakish

Bob Bakish

Bakish joined Viacom in 1996, but has been CEO since 2016, after former CEO Philippe Dauman was forced out. Bakish, who had headed Viacom’s international operations for about a decade before, said he realized Viacom’s relationships with distributors were “a bit frayed” at the time -- the networks were dropped by Cable One and by Suddenlink in 2014 -- and had a "very frictional" renewal with NCTC that same year and that it was time to mend fences.

“It didn’t strike me as a sustainable place to be, particularly if our objective was to return Viacom to growth,” Bakish said. “So we stepped back, evaluated the situation to figure out how we could work with distributors in a more partnerly way,” which he determined would be to expand the scope of the distribution relationship including licensing linear feeds, on demand content and exploring deeper relationships on the advanced advertising front.

“Since we’ve done that, we haven’t gone dark with anyone, we’ve renewed or extended the vast majority of our traditional sub base, we’ve actually increased our distribution and we’ve gotten access to plant for advanced advertising, so we can dynamically insert [ads] in over 90% of VOD homes in the Charter and Comcast national feeds.”

And Bakish said he wants to expand that partnership even more.

Small cable operators have gotten the short end of the stick in most carriage negotiations because of their lack of scale -- many NCTC members are individually dwarfed by the likes of AT&T, Comcast and Charter. And while the cooperative gives them added heft -- together the NCTC represents more than 750 cable operators across the country -- not every programmer shows it the respect it deserves. But Bakish said in today’s fragmented environment, with consumers viewing content online, over-the-top, over-the-air and by more traditional means, small operators are more valuable than ever.

"The reality is, all of you have footprints and markets all around the country in all different sized markets," Bakish said. “There is great power in that, because you have those local consumer connections. I don’t want to go build those. I would rather work with the people that have them and figure out how working together we can grow our businesses.”

Bakish said he sees a segmented pay TV industry today, with multiple players existing in multiple price points. But he foresees a day when players will move freely between those price points, creating more opportunities for choice and for smaller operators.

"You fundamentally operate in smaller markets," Bakish said. "And while that might seem on the surface to be a place that’s less attractive on some levels, I actually think in the business you’re in, you’re in the most attractive place. The big challenge everybody has when you’re pursuing growth is competition. You’re not going to get overbuilt by some 5G mobile player any time soon. Why? Because they are going to inevitably go where there is a denser population, where they will get a better return on investment. And, you’re not satellite players -- you have two-way plant. I think you have a unique, sustainable advantage in this business, that of course encompasses being a telecommunications provider ,including broadband products and maybe reselling mobile products, as well as extending the life of the video bundle. I think working together we can do that.”

Bakish also said Viacom’s recent purchase of Pluto TV could bode well for small cable. Meyka assured the audience that the NCTC is trying to work out a deal.

“For years we’ve been talking to operators about working with the whole base, not just your video bundle also your broadband subscribers, but we didn’t have a product,” Bakish said. “It became obvious that Pluto could be that [product.]”

Bakish also talked about improving Viacom’s content lineup, adding that since the company has refocused on its six core brands -- MTV, BET, Comedy Central, Nickelodeon, Nick Jr. and Paramount Network -- ratings and viewership have climbed. MTV, according to Bakish, has had nine consecutive quarters of ratings growth; Comedy Central has had eight straight quarters of share growth and even Paramount Network, which had a somewhat weaker start, has shown improvement in the last three quarters.



As a result, Viacom has the No. 1 preschool show on TV (Ryan’s Mystery Playdate on Nickelodeon), the No. 1 reality show (The Hills) and the No. 1 drama on cable (Paramount Network’s Yellowstone).

“I’m not saying the job’s all done, we have more work to do, but there certainly is a vibrancy and vitality in these flagship brands that we see and that importantly advertisers saw in the upfront,” Bakish said.

And though Bakish said he continues to see more complexity for the business going forward, he appeared optimistic about the future, paraphrasing his old boss, former Viacom chairman Sumner Redstone

"Content still clearly matters," Bakish said. "Working together is better than fighting each other in this quest for the consumer, because other people will definitely fight us."