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Viacom Accentuates the Positive

While talk of a rebound in domestic ad-sales growth for U.S. cable networks was quieted a bit by Viacom’s fiscal fourth-quarter declines, all was not doom and gloom for the troubled programmer.

Viacom has been a lightning rod for the changing television viewership landscape as millennials abandon linear TV for online video and over-the-top services. As a programmer that caters almost exclusively to young audiences with kids networks like Nickelodeon and Nick Jr., and young adult channels like MTV and Comedy Central, Viacom has felt the brunt of the early pain. It was a position that CEO Philippe Dauman acknowledged in his opening remarks to analysts Nov. 12.

The news was not good: domestic ad sales declined 7% due to ratings softness and increased costs, an improvement over the 9% decline in the fiscal third quarter but in contrast to gains by peers. But Viacom saw some positive spin.

Overall revenue declined 5%, owing t o a 24% decline at Paramount Pictures. The Media Networks division saw revenue rise 5% in the period.

Dauman emphasized the positive news to analysts and even seemed to make peace with Nielsen, citing its networks’ No. 1 position with people aged 2-plus, 18-49 and 2-49 during the quarter, as measured by Nielsen. Chief operating officer Tom Dooley, on the same earnings call, even praised Nielsen — something that would have been unheard of in past quarters when the companies battled over measurement metrics.

Viacom said investments in original programming are beginning to pay off, with ratings up at Nickelodeon thanks to shows like the superhero comedy Henry Danger and at Nick at Nite, TV Land, BET, CMT and VH1.

Still, there was disappointment in the performance in light of ad-sales gains at such peers as The Walt Disney Co. (up 5%); Discovery Communications (up 6%); Time Warner Inc.’s Turner Broadcasting System (flat) and Scripps Networks (up 22%).