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Viacom Inc. (/ˈvəkɒm/ VY-ə-kom) is an American multinational media conglomerate with interests primarily in cinema and cable television. It is currently the world's ninth largest broadcasting, cable, and media company, in terms of revenue; behind Comcast, The Walt Disney Company, Time Warner, 21st Century Fox, Bertelsmann, Dish Network, Sony, and Vivendi. Voting control of Viacom is held by National Amusements, Inc., a privately owned theatre company controlled by the billionaire Sumner Redstone.[2][3][4][5] Redstone also holds, via National Amusements a controlling stake in CBS Corporation.[6]

Viacom Inc.
Public
Traded as
Industry Mass media
Predecessors The previous incarnation alongside Gulf+Western and Paramount Communications
Founded December 31, 2005; 12 years ago (2005-12-31)
Founder Sumner Redstone
Headquarters One Astor Plaza, Manhattan, New York City, New York, U.S.
Columbia Square, Hollywood, California
, U.S.
Area served
Worldwide
Key people
Products
Revenue Increase US$13.263 billion (2017)[1]
Decrease US$2.489 billion (2017)[1]
Increase US$1.874 billion (2017)[1]
Total assets Increase US$23.698 billion (2017)[1]
Total equity Increase US$6.035 billion (2017)[1]
Owner National Amusements (80% voting)
Number of employees
~10,750 (September 2017)[1]
Divisions Viacom Media Networks
Viacom International Media Networks
Paramount Pictures
Website www.viacom.com

The current incarnation of Viacom was created on December 31, 2005, as a spin-off from the original incarnation of Viacom, which was renamed as CBS Corporation after the spin-off. CBS Corporation currently retains control of the over-the-air broadcasting, TV production, subscription pay television, (with Showtime Networks) and publishing assets (with Simon & Schuster), which were previously owned by the original Viacom. Predecessor firms of the original Viacom included Gulf+Western (which later became Paramount Communications) and Westinghouse Electric Corporation. Comprising BET Networks, Viacom Media Networks and Paramount Pictures, the current Viacom operates approximately 170 networks, reaching approximately 700 million subscribers in approximately 160 countries.[7]

Contents

History

Early years

In March 2005, the prior Viacom announced plans of looking into splitting the company into two publicly traded companies because of a stagnating stock price and the rivalry between Leslie Moonves and Tom Freston, longtime heads of CBS and MTV Networks respectively. In addition, the company was facing issues after MTV was banned from producing any more Super Bowl halftime shows after the Super Bowl Halftime Show controversy of 2004.

After the departure of Mel Karmazin in 2004, Sumner Redstone, who served as chairman and chief executive officer, decided to split the offices of president and chief operating officer between Moonves and Freston. Redstone was set to retire in the near future, and a split was seen as a creative solution to the matter of replacing him. It was also intended to provide alternative investments that would be more appealing to investors: one a high cash flow, lower growth company that could afford to pay a substantial dividend and the other a growing company that would have greater investment opportunities and therefore would not be expected to pay a dividend.

A new company, the present Viacom, was created and was headed by Freston. It comprises BET Networks, MTV Networks, and Paramount Pictures Corporation.[8]

2000s

In June 2005, Viacom announced its purchase of Neopets, a virtual pet website, along with GameTrailers, GoCityKids, and IFILM. That December, Paramount announced it would acquire DreamWorks. All indications were that the whole of DreamWorks—both live-comedy film and TV studios, albeit not the DreamWorks archive (which was sold to a group led by George Soros in March 2006) nor the animated unit (which was not part of the deal)—would remain owned by Viacom, even though CBS acquired Paramount's television studio.

On February 1, 2006, Paramount completed its acquisition of DreamWorks. On April 24, Viacom obtained Xfire. In August, just hours before announcing its most recent quarterly earnings, Viacom announced that it had acquired Atom Entertainment for $200 million. In September, Viacom acquired game developer Harmonix for $175 million.

In February 2007, Viacom ordered leaked copyrighted video clips be taken off the video-sharing service YouTube for copyright reasons.[9] On February 21, Viacom publicly announced they would be offering free online access to their own material through Silicon Valley's distributor Joost.

On May 21, 2007, Viacom entered into a 50–50 joint venture with Indian media company Network 18 to form Viacom 18 which will house Viacom's existing channels in India: MTV, VH1 and Nick as well as Network 18's Bollywood movie business. All future Viacom content for India and new ventures such as a Hindi entertainment channel and a Hindi movie channel would be housed in this joint venture.

On December 19, 2007, Viacom signed a five-year, $500 million contract with Microsoft that included content sharing and advertisement. The deal allowed Microsoft to license many shows from Viacom owned cable television and film studios for use on Xbox Live and MSN. The deal also made Viacom a preferred publisher partner for casual game development and distribution through MSN and Windows. On the advertisement side of the deal, Microsoft's Atlas ad-serving division became the exclusive provider of previously unsold advertising inventory on Viacom owned websites. Also, Microsoft purchased a large amount of advertising on Viacom owned broadcasts and online networks. Finally, Microsoft would also collaborate on promotions and sponsorships for MTV and BET award shows, two Viacom owned cable networks.

On December 4, 2008, Viacom announced layoffs of 850 personnel, or 7% of their workforce.[10] At the end of the year, Time Warner Cable (along with partner Bright House Networks) and Viacom's MTV Networks could not come to terms for the renewal of any Viacom channel beyond the end of year.[11][12] Time Warner Cable's operations include New York City and Los Angeles, with Bright House including the Tampa Bay and Orlando markets, both top-20 markets. This blackout was narrowly avoided when a zero-hour deal was reached shortly after midnight on January 1, 2009.[13]

On December 7, 2009, Viacom sold its stake in MTV Brasil to Grupo Abril along with rights to the brand. Details on the deal were not disclosed.[14]

2010s

On May 5, 2010, The Hollywood Reporter revealed that Viacom's Comedy Central "is developing a whole animated series around Jesus Christ" who, according to the network, wants to escape the shadow of his "powerful but apathetic father".[15]

In February 2011, Hulu and Viacom announced the return of The Daily Show with Jon Stewart and The Colbert Report to Hulu, along with shows from the Viacom library. Nickelodeon's shows are not part of this deal.[16] Also that month, Viacom invested in Rainbow S.r.l., an Italian children's animated and consumer products company best known for the Winx Club franchise.[17]

Later, in October 2011, Viacom purchased a majority stake in Bellator Fighting Championships. Spike TV started to air Bellator in 2013, after the rights to the UFC (Ultimate Fighting Championship) library ended in 2012.[18]

On December 1, 2011, the company stopped trading on the New York Stock Exchange and began listing its securities on NASDAQ instead. The stock ticker symbols are the same as that used while the company was on the NYSE.[19]

On July 10, 2012, during contract negotiations over raising carrier rates the U.S. satellite TV provider, DirecTV's executives approached Viacom with a new proposal and a request to continue broadcasting 17 of Viacom's television networks (including Nickelodeon, MTV, Logo, and Comedy Central) during talks, but received no response and thus Viacom ceased transmission to DirecTV's 20 million subscribers.[20] On July 11, in a counter response to DirecTV advising its subscribers to view original programming from the affected networks online, Viacom scaled back access to recent episodes of Viacom-owned program content available to the websites of its networks. Viacom described this as a "temporary slimdown" until a new carriage deal with DirecTV was reached.[21] Viacom and DirecTV reached an agreement on July 20 to return the interrupted programming.[22] In 2012 CEO Phillip Dauman began to report Viacom's intentions to bundle past programming and make it available on-demand via services like Hulu.[23]

On April 1, 2014, Cable One removed 15 channels owned by Viacom (MTV, VH1, Nickelodeon, and TV Land) off after the two companies failed to reach an agreement. Channels were replaced with other networks, including BBC America, Sprout, SundanceTV, IFC, Investigation Discovery, TV One, CMP/TV, National Geographic Channel, and TheBlaze. The change has been deemed permanent.

On May 1, 2014, Viacom announced it had agreed to take over the British broadcaster Channel 5 from Northern & Shell, the media group owned by the British newspaper publisher Richard Desmond. Viacom becomes the first American media company to take over a British broadcaster with a public service remit.[24] The purchase of Channel 5 closed on September 10, 2014.[25]

On October 1, 2014, Suddenlink Communications, removed channels owned by Viacom off after the two companies failed to reach an agreement. Channels were replaced with other networks including Sprout, FXX, Pivot, Uplifting Entertainment, Investigation Discovery, OWN: Oprah Winfrey Network, Women's Entertainment, and TheBlaze. On August 20, 2016, a settlement between Sumner and Shari Redstone and Philippe Dauman has been reached that will have him resign as chief executive officer and be replaced with Thomas E. Dooley as interim CEO. Dauman will continue to serve as chairman until September 13.[26] On May 25, 2017, Viacom channels returned to Suddenlink after nearly 3 years of absence.[27]

In November 2016, Viacom bought Argentine television network Telefe.[28]

In December 2016, the Viacom board appointed Bob Bakish as acting CEO.[29]

Following the Weinstein effect, Viacom (along with Lionsgate and MGM) was on a list of 22 potential buyers that were interested in acquiring The Weinstein Company.[30] They have lost the bid, and on March 1, 2018, it was announced that Maria Contreras-Sweet will acquire all of TWC's assets for $500 million.[31][32]

In February 2018, Viacom announced their plans to acquire the internet video conference Vidcon in an effort to reach out to youth audiences (in a similar way to Viacom's Nickelodeon and MTV channels).[33]

In the same month, Viacom announced that they would launch an official Viacom streaming service in fall 2018, in another effort by Bakish to revitalize the company. This streaming service will support ads (similar to Hulu) and is expected to include TV series from Viacom Media Networks that haven't been available on other services, such as Hulu or Amazon Prime Video.[34][35][36][37] Bakish has stated that the streaming service will serve as a "compliment" to OTT MVPDs, rather than a replacement.[38]

Possible re-merger with CBS

On September 29, 2016, National Amusements sent a letter to the company and CBS Corporation, encouraging the two companies to merge back into one company.[39] On December 12, the deal was called off.[40]

On January 12, 2018, CNBC reported that Viacom had re-entered talks to merge back into CBS Corporation, after Disney's proposed acquisition of 21st Century Fox assets and the heavy competition from companies such as Netflix and Amazon.[41] Shortly afterward, it was reported that the combined company could be a suitor for acquiring the film studio Lionsgate.[42]

On March 30, 2018, CBS made an all-stock offer slightly below Viacom's market value, and insisting that its existing leadership, including long-time chairman and CEO Leslie Moonves, oversee the re-combined company. Viacom rejected the offer as being too low, requesting an increase by $2.8 billion, and requesting that Bob Bakish be maintained as president and COO under Moonves. It was reported these conflicts had resulted from Shari Redstone seeking more control over CBS and its leadership.[43][44]

Copyright complaints against YouTube

In February 2007, Viacom sent upwards of 100,000 Digital Millennium Copyright Act takedown notices to the video-sharing site YouTube. Of the 100,000 notices, approximately 60–70 non-infringing videos were removed under the auspices of copyright infringement.[9]

On March 13, 2007, Viacom filed a US$1 billion legal claim (Viacom International Inc. v. YouTube, Inc.) against Google and YouTube alleging massive copyright infringement, alleging that users frequently uploaded copyrighted material to YouTube—enough to cause a hit in revenue for Viacom and a gain in advertisement revenue for YouTube.[45] The complaint contended that almost 160,000 unauthorized clips of Viacom's programming were made available on YouTube and that these clips had collectively been viewed more than 1.5 billion times.

In July 2008, the case generated controversy when District Judge Louis Stanton ruled that YouTube was required to hand over data detailing the viewing habits of every user who had ever watched videos on the site.[46] Judge Stanton rejected Viacom's request for YouTube to hand over the source code of its search engine system, saying that the code was a trade secret.[47] Google and Viacom later agreed to allow Google to anonymize all the data before handing it over to Viacom.[48]

On June 23, 2010, Judge Stanton ruled in Google's favour in a motion for summary judgment, holding that Google was protected by provisions of the Digital Millennium Copyright Act, notwithstanding evidence of intentional copyright infringement. Viacom announced its intention to appeal the ruling.[49]

On April 5, 2012, the ruling was overturned by the United States Court of Appeals for the Second Circuit.[50] Writing for a two-judge panel (because Judge Roger Miner had died while the trial was pending) of the Second Circuit, Judge José A. Cabranes concluded that "a reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website". Eric Goldman, a professor at the Santa Clara University School of Law, expressed concern that the ruling would negatively affect startups, by making them "more hair-trigger on taking down news or content, for fear that failure to do so will be held against them by content providers".[51]

Viacom International

As with the old Viacom, the current company owns Viacom International, which is the formal owner of copyrights associated with Viacom's corporate website and its cable networks. This division now owns the rights to a majority of Elvis Presley films made for Paramount Pictures, such as Blue Hawaii and King Creole.

It also continues to focus on its own in-house productions made for its various networks (MTV, VH1, Nickelodeon).[52]

Corporate governance

The previous board of directors of Viacom were George S. Abrams, David Andelman, Joseph Califano, Jr., William Cohen, Philippe Dauman, Alan C. Greenberg, Charles Phillips, Shari Redstone, Sumner Redstone, Frederic Salerno, William Schwartz, and Robert D. Walter.

Following the Viacom/CBS split, the Viacom board consisted of George S. Abrams, Philippe Dauman, Thomas E. Dooley, Ellen V. Futter, Robert Kraft, Alan Greenberg, Charles Phillips, Sumner Redstone (Chairman), Shari Redstone (non-executive Vice-Chair), Frederic Salerno, and William Schwartz. As of 2010, the Board consists of George Abrams, Philippe Dauman, Thomas E. Dooley, Alan Greenberg, Robert Kraft, Blythe McGarvie, Robert M. Bakish, Charles Phillips, Shari E. Redstone, Sumner M. Redstone, Frederic Salerno, and William Schwartz.[53]

Assets

See also

References

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  2. ^ "Global 500 2009: Industry". CNN. July 20, 2009. Retrieved May 1, 2010. 
  3. ^ "2007 Results" (PDF). February 28, 2008. Archived from the original (PDF) on September 16, 2010. Retrieved May 1, 2010. 
  4. ^ Siklos, Richard (February 9, 2009). "Why Disney wants DreamWorks". CNN. Retrieved May 1, 2010. 
  5. ^ "News Corporation – Annual Report 2007". Newscorp.com. June 30, 2007. Archived from the original on June 29, 2011. Retrieved July 13, 2011. 
  6. ^ Dealbook. "National Amusements to Sell CBS and Viacom Shares". DealBook. Retrieved 2018-01-29. 
  7. ^ Press release: "VIACOM REPORTS EARNINGS GROWTH FOR FOURTH QUARTER AND FULL-YEAR FISCAL 2012" Archived March 4, 2016, at the Wayback Machine. Viacom
  8. ^ Hill, Charles; Jones, Gareth (2007-10-22). Strategic Management: An Integrated Approach. Cengage Learning. ISBN 0618894691. 
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  10. ^ "The Dreaded Viacom Layoffs: 850 People". 
  11. ^ Fixmer, Andy. (2008-12-31) Viacom May Pull Channels Off Time Warner Cable in Contract Spat[permanent dead link]. Bloomberg. Retrieved 2011-07-13.
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External links