Viacom might not be a household name, but its famous entertainment brands are welcomed into most living rooms on a daily basis. The company is a leading media conglomerate with an extensive portfolio of cable TV and film production assets. Its MTV Networks unit runs such cable networks as Comedy Central, Nickelodeon, and the family of MTV channels (MTV, MTV2, VH1). Viacom also owns Black Entertainment Television, which airs programming on BET, BET Gospel, and BET Hip Hop. In the film business, Viacom operates through Paramount Pictures, which includes imprints Paramount Pictures and Paramount Vantage. Chairman Sumner Redstone controls a majority of Viacom through his National Amusements movie theater chain.
The company is primarily focused on its television operations, which account for about 60% of sales. Generating most of their revenue from a combination of commercial advertising and carriage fees paid by cable system operators, the TV networks provide a steady anchor for the the company, balancing against the uneven feature film business and the sometimes fickle tastes of movie goers. Viacom does not have the broad complement of media assets that characterize integrated conglomerates such as Time Warner and Walt Disney, but the company still realizes some potential by integrating its TV and film businesses, such as through DVD sales and cross-promotion.
What particularly drives Viacom's business is its success in building entertainment brands. The company is notable for creating and promoting such names as MTV and Nickelodeon into easily recognizable banners that stand for a particular form of entertainment. By focusing on younger viewers and popular culture, its flagship MTV continues to draw one of the largest television audiences in the 18-34 age group. Nickelodeon, meanwhile, has become a popular destination for children's programming. In the same way, Viacom has culled loyalty among young adults for its Comedy Central thanks to such programs as The Daily Show with Jon Stewart and its offshoot The Colbert Report, while BET dominates the important urban demographic with entertainment, music, and special interest programming.
Being near the top in the ratings race has not completely shielded Viacom from larger economic problems, however. It suffered a drop in advertising revenue due largely to the recession, forcing it to make adjustments late in 2008 in order to cut costs. Those efforts, including salary freezes and hundreds of job cuts throughout its TV operations, helped Viacom rebound the following year, as did new programming, such as MTV's popular reality show Jersey Shore.
The company's filmed entertainment division, meanwhile, has been riding high on a string of successful releases. The second big budget Transformers movie, Transformers: Revenge of the Fallen (co-produced with DreamWorks), took in more than $300 million in its first 14 days of release in 2009. The blockbuster performance followed on the heels of Paramount's latest Star Trek adventure, which opened with more than $75 million at the box office.
Viacom has been been looking to expand its reach into digital media in an effort to reach its young and increasingly online target audience. However, the company announced plans to sell video game developer Harmonix Music Systems in 2010, after lagging sales of the popular Rock Band video game began to hurt the company's bottom line.
Viacom also expanded its holdings in cable programming with a new pay-TV channel called EPIX. The network, a partnership with movie studios MGM and Lions Gate, debuted in 2009 and offers an online subscription movie service along with its traditional cable and satellite channel. The partners hope the new channel will offer a larger slice of revenue for their movies than distributing them through such rivals as HBO (owned by Time Warner) and Showtime (CBS Corporation).