LIVE Viacom CEO Philippe Dauman at UBS

The last time Viacom CEO Philippe Dauman talked at an investor conference, he caused a tempest by appearing to dismiss the contributions of Steven Spielberg. Let’s see what happens this go-round:

What’s the advertising outlook in the cable business
, which makes up most of VIA? We are “very gratified” with progress we’ve made in programming. Always enjoy hearing Philippe describe his networks’ programming: Particularly gratifying to hear the words “Shot At Love With Tila Tequila” come out of his mouth. Scatter pricing up double digits. Domestic ad sales growth will be around 5%in Q4, same as Q3, and “we really look forward to 2008.” Margins? “Steady” in core business. “Rock Band” hit video game has lower margins, which get blended into core, but overall things are ok. As always, emphasising switch from franchise programing to stuff they own. International: Rolling out brands like MTV, Nick, etc, that also bring hotel, theme park, product opportunities.

Renegotiating affiliate deals
: Comedy Central coming off of long-term deals struck when the channel was worth much less. New deals will be more lucrative.

How will new ratings model affect VIA? We’re ready for it. Pricing changes, but also upping “integrated branding” (i.e. Stephen Colbert eating Doritos on his show) efforts.

Paramount: Trying to integrate cable brands (MTV, Nick, maybe BET, maybe Comedy Central) into movies.

Talking up movie slate. Standard pep talk here: New JJ Abrams (“Lost”) movie is “low-budget” but big hopes. Indiana Jones 4 (Spielberg-directed) etc… Careful to note several DreamWorks movies among the big hits. And a “broader, more realistic” Star Trek — “more like Star Wars”. (We find this distinction confusing, and imagine fans will as well).

General movie business: “Challenging.” Revenue streams flattening out, costs rising. Notes new capital coming from “the Middle East”, which they hope to take advantage of.

DreamWorks: “We’re very pleased with where we are with DreamWorks.” Notes that there are two deals: DreamWorks Animation (DWA) distribution deal goes through 2013, they get 8% fee. Very profitable. DreamWorks live action – this is the tricky part, so Philippe speaking extra carefully — ” we are very happy to have one of the great film makers of our time – of all time – working with us.” Philippe and Steven get along great. Want to keep working with him. Proceed with mutual respect. “We’ll see in what form the relationship will continue.” Time frame? “We don’t have any time frame… whatever makes him happy, and makes us happy.”

Web: The standard stats: 92M monthly uniques. 300+ sites. 3rd party distribution: Bebo deal and more to come: “several with both major companies and smaller companies in the next several weeks leading up to CES”.

Acquisitions:  Focusing on organic growth.  Any acquisitions will be small equity deals or tuck-ins. Interested in virtual worlds, “where we have a leadership position.”

Games business: Talking up Rock Band, obviously. Big ambitions online as well. #2 in world. Looking for subscription and ad revenue. With growth of gaming, ad revenues from that sector still growing, which is one of the reasons we feel optimistic about ad spend.

Any more big buys coming? Doesn’t sound like it – focusing on organic growth.

Audience Q&A
: Why are international cash-flow margins so low (low-double digits right now) and how can you increase? We have some countries like UK where we have established businesses and higher margins than in countries where we’ve just started. It will be “some time, if ever, if you get to the kinds of margins we enjoy in the domestic business.”

To what extent are you insulated or vulnerable to a recession?:
Well-positioned. We have prime audiences, early adopters. Even in slow down or a “recessionary environment” people still go to movies, and want to buy cell phones and “Zunes”. (Really!)

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