The debt offering takes advantage of the market’s low interest rates, and will help fuel Viacom’s recently announced plan to double its stock repurchase effort to $20B — including $3B to take place in 2013. The decision to …
UPDATED, 11:14 PM: YouTube today dismissed the support that IATSE, the DGA, AFM and SAG-AFTRA has shown for Viacom’s efforts to get another day in court with its $1 billion copyright infringement suit. Not only does the Google-owned company say in a statement that the unions’ brief “recycles” a previous filing from 2010 in the suit but that they “don’t seem to have followed developments in the case.” Read the statement YouTube issued via a spokesperson late Monday below:
The brief filed by entertainment industry unions recycles their brief from the first appeal in 2010. They don’t seem to have followed developments in the case or recognized the changes to YouTube’s place in the entertainment ecosystem. The Court has twice rejected Viacom’s unfounded copyright infringement claims. And even Viacom has conceded it doesn’t object to how YouTube has operated for the last five years. YouTube has signed licensing agreements with every major movie studio and record label, has developed an industry-leading Content Identification system used by 4,000 media partners, and does more to prevent piracy than any other major video hosting provider.
PREVIOUSLY, 6:33 PM: Despite another recent court loss, Viacom’s latest attempt to revive its billion-dollar copyright suit against YouTube has just gotten some very vocal support again from some old friends. “YouTube’s role in the rampant, systematic distribution of content in violation of the exclusive rights of copyright holders caused and continues to cause harm to the entertainment industries and the members of the Guilds and Unions working in those industries,” said a joint brief filed late last week by lawyers for the Directors Guild of America, SAG-AFTRA, IATSE and the American Federation of Musicians. “We urge the Court to consider the full ramifications of YouTube’s actions, and request that the Court reverse the lower court’s decision.” The unions offered similar such support as they did last week back in 2010. Filed on August 2 this year, the quartet’s new 28-page brief (read it here) comes after Viacom filed materials on July 30 with the 2nd Court of Appeals asking for a new judge in the long-running case. That expected legal move against Judge Louis Stanton followed the NY-based U.S. District Court judge granting YouTube yet another favorable summary judgment in the matter on April 18. That was the second such decision for the Google-owned entity in the case. Viacom first launched the $1B action in 2007.
Listen to (and share) episode 43 of our audio podcast Deadline Big Media With David Lieberman. Deadline’s executive editor talks with host David Bloom about the big Hulu non-sale announcement; Tribune’s next step out of bankruptcy; drooping broadcast ad prices; the Apple e-book loss; and Viacom bear changes his rating, but with a big caveat.
Did hell just freeze over? It must have, because this morning Viacom‘s most relentless naysayer on Wall Street, Bernstein Research’s Todd Juenger, upgraded the stock to “market perform” from “underperform” raising his target price to $73 from $64. It’s …
Investors who bet on media should have warm memories from Q2. The Dow Jones U.S. Media Index rose 6.0% in the quarter vs. the Standard and Poor’s 500 which was +2.4%. Sony led the Big Media pack …
The agreement provides Amazon with “hundreds of TV shows and thousands of TV episodes” including “a collection of TV shows that customers won’t find on any other digital video subscription service,” the companies say. But it’s especially interesting because it comes days after Viacom’s streaming carriage agreement with Netflix expired. Although execs said last week that they’re still negotiating, Netflix made it clear that it now favors deals that would give it exclusive access to programming. “We valued [Viacom's] content for sure, we just disagreed about the value of the content,” Chief Content Officer Ted Sarandos told investors at the Nomura U.S. Media & Telecom Summit. “We’re into a whole new space about what people are watching and what it’s worth.” But Viacom CEO Philippe Dauman told the same gathering that he doesn’t want to be tied down. “There isn’t a player or potential player doesn’t come by our door and we work with all of them.” Streaming, he added, “is a continuing good overall opportunity for us and any growth opportunity for us.” Viacom shares are up about 2% in early trading. Here’s today’s release:
Shares opened up more than 4% this morning after Philippe Dauman reassured investors that Viacom will continue to generate lots of cash from deals with streaming services — even if its program licensing pact with Netflix expires at the end of this month. “We’re still in discussions with Netflix…and with others,” he told analysts in a conference call. “We’re open to licensing content, some of it on an exclusive basis.” Netflix CEO Reed Hastings raised some fears last week when he said that his company would let its current deal with Viacom expire. Netflix is shifting its focus to “exclusive and curated content” as opposed to “non-exclusive, bulk content deals,” he said. The streaming service would be fine without Nickelodeon shows because “with all the recently added fresh programming from Disney, Cartoon Network, Hasbro’s The Hub and DreamWorks Animation, we have a great kids offering.” But Dauman also says that Viacom has little to fear without Netflix — and has “enough visibility” to know that the entertainment company can realize its forecast to see streaming revenues grow 10% this fiscal year.
Several key numbers were down, although cost-cutting at Paramount appears to have enabled Viacom to slightly beat the Street’s profit expectations. The company’s fiscal Q2 net earnings from continuing operations came to $489M, -18.4% vs the period last year, on revenues of $3.14B, -5.9%. Analysts thought revenues would reach $3.19B. But earnings at 96 cents per share were a penny above forecasts. At Viacom’s core pay TV networks operation, revenues increased 2% to $2.23B while operating income fell 2% to $873M. Domestic affiliate revenues were up 3%, but the company says that if you factor out the streaming deals that helped last year’s results the number would be up by a low-double-digit percentage. Ad sales in the U.S. and abroad were up 2% — an upturn that many investors wanted to see after last year’s ratings declines at Nickelodeon. Filmed entertainment was the weakest link with revenues -20% to $941M and operating income -43% to $65M. Viacom says its worldwide theatrical revenues fell 15% without a film that provided the same boost it saw last year from Mission: Impossible — Ghost Protocol.
Analysts expect to hear encouraging news across the board from the barrage of Big Media Q1 earnings reports and conference calls this week and next. But they’ll be listening especially carefully to Viacom on Wednesday. Its shares — which recently hit all-time highs — are down 3.6% since Monday night, when Netflix said that it will let its streaming deal with Viacom expire next month. Netflix says it would rather secure exclusive rights to particular shows instead of broad deals for shows that also appear on other streaming services including Amazon and Hulu. That worries some investors: Viacom has reassured them that all’s well following Nickelodeon‘s ratings dive last year — and backed up its confidence by promising to repurchase $2.5B in stock this year and pay $1 per share in dividends. The question now is whether Viacom can afford to make good on those vows. “Cash, rather than content, remains king,” Pivotal Research Group’s Brian Wieser says this morning. The Netflix news adds to the concerns about Viacom already held by Bernstein Research’s Todd Juenger — the company’s toughest critic on Wall Street. “We don’t think Netflix will bid a big sum for the specific programs it wants from Viacom,” he says this AM. “If they were willing to do so, they wouldn’t have gone through this exercise.” Nor does Juenger believe that Amazon will become a white knight. It “has all the leverage. Anything they offer to Viacom is better than nothing.” He adds that it would be “the ultimate irony if Viacom claimed the loss of Netflix would help their linear ratings, given years of arguing the opposite.” Others are more sanguine about Viacom’s prospects.
UPDATE: After besting Viacom for the second time in three years in the multi-million copyright infringement suit the media giant brought against them, Google released this statement today:
The court correctly rejected Viacom’s lawsuit against YouTube, reaffirming that Congress got it right when it comes to copyright on the Internet. This is a win not just for YouTube, but for people everywhere who depend on the Internet to exchange ideas and information. – Kent Walker, Senior Vice President & General Counsel, Google
PREVIOUSLY, 2:53 PM: Even though it suffered the second loss in three years on the same multimillion-dollar copyright suit against YouTube, Viacom today said it plans to appeal the latest ruling against it. “This ruling ignores the opinions of the higher courts and completely disregards the rights of creative artists. We continue to believe that a jury should weigh the facts of this case and the overwhelming evidence that YouTube willfully infringed on our rights, and we intend to appeal the decision,” said the company in a statement after a U.S. District court judge in New York granted YouTube yet another favorable summary judgment today. “The Clerk shall enter judgment that defendants are protected by the safe-harbor provisions of the Digital Millennium Copyright Act from all of plaintiffs’ copyright infringement claims and accordingly dismissing the complaint, the costs and disbursements to defendants according to law,” Judge Louise Stanton wrote Thursday (read it here).
Even with plans to appeal, this second verse sounds a lot like the first. Viacom lost a previous summary judgment in the case back in July 2010 on the suit, which it instigated in 2007. Among its many provisions, the Digital Millennium Copyright Act offers legal protection from liability to an unwitting website from infringement that its users may perform. Almost two years later, the plaintiffs then got a second swing at the video-sharing website thanks to the Appeals Court in April of last year ruling that YouTube hadn’t adequately proven it was actually entitled to the protection of the DMCA. The Appeals Court also noted it believed that in fact YouTube did know its users were putting up Viacom-owned material on the site. Unfortunately for Viacom, the judge, who delivered a similar ruling back in 2010, thought the system worked just fine and that YouTube had done all it needs to do in this case.
Here’s more proof that Wall Street has freed Viacom from the penalty box following last year’s steep ratings declines at Nickelodeon and MTV. The stock’s up 2.5% in late morning trading — and touched a record $65.25 — after Nomura Equity Research’s Michael Nathanson and RBC Capital Markets’ David Bank said that trends are improving for the entertainment giant. Nickelodeon’s ratings rose 1% in Q1 and with new shows including Teenage Mutant Ninja Turtles establishing themselves “we expect that the ratings momentum at Nick should continue,” Nathanson says. That could pay off if, as the analyst expects, studios boost spending to promote new movies later this year. If that happens and Nick’s ratings continue to improve then it “can likely take back some [advertising] market share from Cartoon Network,” he says. Bank’s upbeat case for Viacom goes beyond Nickelodeon. He says that ratings momentum “accelerated in roughly half of Viacom’s ad revenue portfolio” including Nick At Nite, BET, and Comedy Central. What’s more, he says MTV should look a lot better when year-over-year comparisons no longer include Jersey Shore, which ended its run late last year.