Optimus Prime and his merry metallic men came to Sumner Redstone's rescue in the third quarter. Viacom
Last year, Viacom's movie production arm pulled in 32% of the company's sales, at a small operational loss. This year, Transformers was the third-highest box-office draw of the year, after Marvel
Anyway, Transformers was a massive hit, with $702 million in worldwide box office receipts -- and that's before the DVD even hit store shelves. It helped the film division contribute 40% of Viacom's revenue and 9% of total operating profits this time. (Not to mention that Transformers announced another run of its hit movie but on IMAX
Want a ludicrously safe bet? Find a bookie willing to take cash bets on anything, and plunk down your entire net worth on the outlook for sequels to Transformers. The odds won't be very juicy, because it's already a done deal, with the next installment in the series due for a summer 2009 release. Trust me, those robots will haunt your local theater for a long time.
Now, the media networks are still pulling the wagon here, with strong and steady income from MTV, Nickelodeon, Comedy Central, and other cable properties. This past quarter saw network revenue increase by 9% to $2 billion, or more than 60% of the company's total revenue pie. A looming writers' strike might put a crimp in that income stream soon, but Redstone and his company seem better-prepared than most of Viacom's rivals.
Only shows like The Colbert Report and The Daily Show With Jon Stewart would suffer, because they depend on fresh material every day. The rest of the portfolio can fall back on reruns without missing a step. For example, three of last week's top 10 shows, according to Nielsen, were episodes of Nickelodeon's SpongeBob SquarePants -- and none of them were new. In addition, shows on two of Viacom's networks -- MTV and VH1 -- are not only heavily reality-based, but also thrive on reruns throughout the weekend.
With that kind of back catalogue, and little pressure to produce new, original content, Viacom does look ready for a strike, in a way that broadcast networks like Disney's ABC or Viacom's sister operation CBS