@ McGraw-Hill: Viacom's Dauman: Online Won't Cause Viewers To Cut The Cable Cord

This story was written by David Kaplan.
In his introduction of Viacom (NYSE: VIA) president and CEO Philippe Dauman at an afternoon keynote at the McGraw-Hill Media Summit, his interviewer Ron Grover, BusinessWeek's LA bureau chief, offered some family history. Pointing to a year old LATimes piece, back in 1996, Dauman's father, a freelance photographer living in New York noticed that a Life magazine photo he had taken was used by the late Andy Warhol in a painting. Seeing that the Warhol painting had sold for over $400,000, the elder Dauman promptly sued the artist's estate, which eventually settled. Like father like son: Dauman's Viacom sued Google (NSDQ: GOOG) for copyright infringement over YouTube's unauthorized use of content from its cable programs.

The beginning of the conversation avoided the contentious issue of copyright protection. Instead, Grover picked up from NBCU CEO Jeff Zucker's comments earlier in the day on Jon Stewart's pillorying of CNBC, Dauman said: "Jon Stewart has a connection with the zeitgeist. the reason it got so much attention is because he spoke to what people were thinking about." Grover: Any salary increase for Stewart? Dauman: "We treat him very well."

So how long will this back and forth between Stewart and Cramer continue? Until people are really tired of it, it seems. "Cramer is welcome on any of our channels. He hasn't done Colbert Report yet."

Advertising was only down 3 percent last year. All things considered, that's not so bad, Grover noted. Dauman insisted that the kids upfront is off to a good start. But he didn't offer much in the way CPMs might head this year, saying only, "Having great content always helps." More to come

Cutting the cord: Citing Time Warner (NYSE: TWX) Cable chief Glenn Britt's fears that consumers are "cutting the cable cord" by watching programming on TV, Dauman sought to make the case that such concerns are overblown. Putting shows online only reinforces the viewership that makes them more reliant on cable distribution. "We're working with cable operators to make sure the consumer gets what they want in a way that works will for both the content companies and distributors. We all need to make money. Talent likes to be rewarded and these shows cost money." Dauman avoided directly answering Grover's questions about TWC's and Comcast's plans to create a special broadband channel to charge their customers extra to watch online video. He didn't say he was opposed to such a service, and insisted the company's receptivity to the variety of plans to make money from their content.

Revenue models: Dauman: There's a lot of experimentation going on and in a few years, cable channels will get subscription revenue, as well as merchandising. Gaming is an interesting area and Rock Band will give us more of a presence online. As technology improves, it will allow for additional revenue streams.

How much digital revs? Not telling: Back in 2007, Dauman often predicted that Viacom would hit $500 million in digital revenues. Grover tried to get him to answer whether the company achieved that goal. Dauman hesitated a bit and clammed up, saying the company will not break out digital revneues. The rationale: "Digital has become an integral part of our shows. We have 300 separate sites, some relaed to Comedy Central and MTV in general, and some to specific shows. And we are deriving revenues from shows on a variety of formats, not just sales in one area. So it doesn't make sense to look at that one sliver. Digital and cable work hand in hand, not separately."


By David Kaplan
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