Viacom CEO Defends Paramount’s ‘Disappointing’ Revenue: ‘We Just Had Too Few Movies’

Philippe Dauman doesn’t plan on consolidating with another studio, and expects the movie company to “come back strongly”

Last Updated: November 12, 2015 @ 7:15 AM

Paramount Pictures hasn’t exactly been the strongest leg for struggling parent company Viacom, and 2015’s fiscal fourth quarter was no exception to the movie studio’s continued revenue decline.

One of the main topics of discussion on the Q4 conference call between media analysts and Viacom executives was how to handle the slipping subsidiary, which provides both big and small-screen entertainment.

Michael Nathanson of MoffettNathanson asked Viacom CEO Philippe Dauman why his company hasn’t just consolidated Paramount with another studio, considering what the analyst called the continuation of its “disappointing” downward trend.

“The movie business is a cyclical business — we’ve certainly seen that in a big way with what Universal has done this year,” Dauman began his response, referring to the Comcast/NBCUniversal studio’s massive operating income boom.

“For a variety of reasons, having to do with issues of development, to cast availability … we just had too few movies to support the infrastructure that we have and really to generate revenues,” he continued.

“We believe Paramount will come back and come back strongly,” Dauman concluded the matter, citing its franchises, recent growth initiatives in animation and on TV, and long-standing relationships with talent like Michael Bay, Martin Scorsese and J.J. Abrams.

Earlier on Thursday, Viacom reported its Q4 financials, which fell shy of Wall Street’s revenue expectation. The sales decline was pegged principally to a 20 percent lower box office compared to the same quarter last year.

The Filmed Entertainment optics look particularly bad because Viacom had nothing to match the success of “Transformers: Age of Extinction” from Q4 in 2014. That segment was down 24 percent overall.

The Filmed fall was partially offset by a 5 percent Media Networks growth. The TV side’s sales rose on higher domestic affiliate fees — up 15 percent — and international ad sales. Stateside, that advertising didn’t fare as well, dropping 7 percent on lowered TV ratings.

Read more about Q4’s earnings here.

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