Viacom's Media Disaster: Lessons for the Rest of the Industry

Strategic Insights -

Viacom's troubles are a harbinger of a larger problem in the media industry. The company's recent write-off of $700 million, due in part to the failure of several shows, highlights the challenges of attracting and retaining younger audiences. This crisis is not unique to Viacom; the entire industry is grappling with the shift in viewer preferences towards on-demand content and social media.

Key Takeaways:

  • Viacom's struggles are a warning sign for other media companies, which may also face declining viewership and revenue.
  • The rise of on-demand content and social media has disrupted traditional TV viewing habits, making it harder for companies to reach younger audiences.
  • The Nielsen data may not accurately reflect viewer behavior, which can be influenced by set-top box data.
  • The bundling of TV shows and advertising products is no longer a viable strategy, as viewers increasingly opt for a la carte streaming services.
  • Ambient TV viewing, where people watch TV in the background, may account for up to 45% of total TV viewing time, making it a significant source of revenue for advertisers.
  • Twitter's revenue model is still in its early stages of development, and the company needs to find ways to monetize its vast user base.
  • Facebook's messenger app and WhatsApp may be too early in their monetization stages to provide significant revenue for the company.

Statistics:

  • $700 million: the amount of write-offs Viacom has announced due to the failure of several shows.
  • 400 million: the amount of the write-off attributed to bad or failing shows.
  • 45%: the estimated percentage of TV viewing time that is ambient, or background, viewing.
  • 500 days: the number of days until the 2016 election, which may be a significant revenue source for TV advertisers.
  • 92: the age of Sumner Redstone, the Viacom chairman, who has been out of the business and under fire for his leadership.
  • 2014: the year of publication for the Bloomberg transcript.

Sources:

  • "The Wall Street Journal"
  • Bloomberg News transcript (undated)