Viacom's 2 divisions are expected to make $13.1 billion for full-year 2020
(1) Media Networks $9.9 billion (76%);
(2) Filmed Entertainment $3.2 billion (25%); and
(3) Corporate/Eliminations $0.1 billion (-1%)
Total Revenue
Viacom's Business Model
Viacom makes money primarily through its owned TV channels and through production and distribution of movies. It has 2 primary operating segments: (a) Media Networks, and (b) Filmed Entertainment
Media Networks
It creates, acquires, distributes and sells programming and other content, along with providing advertising & marketing services.
Advertising: Generates revenues from the sale of advertising and from marketing services, depending on the number of viewers and viewership demographics.
Affiliate Fees: Generates revenues through fees from distributors of programming and program services, such as cable television operators, direct-to-home satellite television operators, mobile networks and SVOD and other OTT services.
Ancillary: Revenue generated from licensing company's brands and intellectual property, creating and publishing interactive games, recreation experience and live events.
Filmed Entertainment
It develops, produces, finances, acquires and distributes films, television programming and other entertainment content.
Theatrical: Generates revenues worldwide from the theatrical distribution of films, primarily from audience ticket sales
Home Entertainment: Sales and distribution of DVDs and Blu-ray discs relating to the films released theatrically by Paramount and programming of other Viacom brands such as Nickelodeon, MTV, Comedy Central and BET, as well as certain acquired films and content distributed on behalf of third parties such as CBS.
Licensing: Generates fees by licensing films and television programs produced, acquired or distributed by Paramount, for a fee or on a revenue-sharing basis
(A) Media Networks Revenue saw a marginal decline due to lower advertising and ancillary revenue in FY 2019. Revenue is expected to remain almost flat in 2020
Advertising Revenue decreased in 2018 due to unfavorable foreign exchange. However, domestic advertising increased 1% reflecting growth in revenues from AMS (advanced marketing solutions) and higher pricing, partially offset by lower linear impressions. AMS, which now comprises approximately 20% of domestic advertising revenues, increased 76% in 2019, and includes advertising on Pluto TV.Affiliate revenue was marginally up, primarily driven by higher OTT and studio production revenues and contractual rate increases, which more than offset subscriber declinesAncillary revenue decreased 12% in 2019, driven by lower revenues from certain consumer products franchises, as well as lower live events revenues
(B) Filmed Entertainment revenue was up due to growth in Home Entertainment, Licensing and Ancillary business
Theatrical revenue decreased sharply by 18% in FY 2019, principally reflecting a difficult comparison against Mission: Impossible - Fallout in the prior year as against current year releases such as Bumblebee, Rocketman and Instant Family.Home entertainment revenue increased 4%, led by healthy growth in domestic market in 2019, benefiting from the releases of Mission: Impossible - Fallout and Bumblebee.Licensing revenue increased 5% in FY 2019 primarily due to an increase in current year television production revenuesAncillary revenues saw a sharp rise of 33% in FY 2019 driven by higher international theme park licensing revenues and a new music rights agreementFilmed entertainment revenue is expected to grow further in 2020, led by strong growth in all segments except theatrical revenue.
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