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Viacom generated $2.96 billion in its fiscal second quarter (ended March 31, 2019), down 6% from $3.15 billion year-over-year (YoY). Those declines came as advertising revenue fell by 7% YoY to $1.03 billion and affiliate fees fell 6% to $1.14 billion - both of which are part of Viacom's media networks segment.
The segment contributes the vast majority (77%) of Viacom's business, with the remainder coming from filmed entertainment.
What it means: Viacom is pursuing a series of methods to expand streaming content distribution across various platforms and services - and reduce its reliance on the traditional cable business.Here's a rundown of the streaming strategies that Viacom is pursuing:
The bigger picture: These strategies could help insulate Viacom from headwinds related to viewing declines on traditional TV among younger audiences and ongoing cord-cutting. Between 2010 and 2018, traditional TV viewing has dropped 45% among kids ages 2-11 and 61% among viewers ages 12-17. That makes it harder for Viacom - whose core networks like Nickelodeon and MTV have primarily catered to those demographics - to achieve rate increases when seeking carriage renewal on traditional pay-TV services.
Meanwhile, cord-cutting continues to erode subscribers on all cable networks: Cord-cutting hit a record high in Q1 2019, with pay-TV sub losses of 1.4 million in Q1, up 75% YoY, according to MoffettNathanson.
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