UPDATE, 3:50 PM: The folks at Paramount say that we misunderstood Dauman. He wasn’t trying to say that he plans to make cuts at home entertainment, they say. He was simply talking in general terms about being vigilant about all of Paramount’s costs. That’s not how it looks to me, but why don’t you decide for yourself? Here’s the transcript of Dauman’s response to a question about how he might “improve Paramount’s fortunes”:

There are some things you can control in the movie business…that is the
overhead. It doesn’t matter what movie you make. You can control that; that’s money in the bank if you can do that. And we have continuously improved that part of it. You continually have to adjust. For example, as the home entertainment stream is challenged, fewer DVDs are being sold, so you have to review your home entertainment overhead. That’s adjusting to the business model. We’re very focused on that. We continue to work on the overhead there.

PREVIOUS, 12:46 PM: This might be a good time to polish up your resume if you work at Paramount Pictures’ home entertainment unit. Viacom CEO Philippe Dauman plans to review the “overhead” — a bloodless synonym for “jobs” — there as DVD sales tank, he told an investor group today. The nation’s highest-paid executive last year said that cutting overhead is “money in the bank.” A lot of Viacom’s extra cash will go back to investors. After recently increasing the stock dividend, Dauman told the Nomura Securities U.S. Media Conference that the company is on track to buy back $700 million in its stock this quarter, and plans to repurchase just as much next quarter. That would bring the total in this round to about $2.3 billion. Dauman says he doesn’t “believe we need to make a strategic acquisition.” But he says he also doesn’t want to give up any cable channels if cable and satellite companies look for places to cut to balance their growing payments to retransmit shows from ABC, CBS, Fox and NBC. Even little-watched networks such as MTV2, Nick Toons and VH1 Classic “resonate with our audience,” he says. Pay TV companies probably will either kick out independently owned channels or live with lower profit margins, he says. That isn’t pay TV’s only problem: Efforts to roll out TV Everywhere — initiatives that enable subscribers to also watch TV shows via the Web — have “been slower than previously advertised.” Still, Dauman says he loves having digital companies including Netflix bidding for Viacom’s movies and shows. He expects to see several online companies angling for programming from Viacom-supported premium channel Epix when its deal with Netflix expires in mid-2012. If Netflix wants an exclusive deal, then “we’re up for that as well,” he says. Meanwhile, Dauman appears to be indifferent to the growing perception of Viacom as a haven for racy schlock such as Jersey Shore. “People complain about the show before they even see it,” he says.