Viacom’s Dauman at Goldman’s Communicopia: Notes

Goldman analyst Noto interviews Viacom CEO Philippe Dauman:

Economy/Advertising:  Not seeing impact on advertising from weakening economy yet.  Usually 1-2 quarter lag in cycle.  But usually have canaries in coalmine, and we are not seeing it.  [For what it’s worth, AOL’s Bob Pittman said almost exactly the same thing at the Merrill Lynch conference in the spring of 2001, six months before company collapsed.]

Affiliate fee growth expectations:  Have enjoyed double-digit growth, expect to continue.  US and intl.  Networks very underpriced.  We are 25% of viewing on ad-supported cable, but fees closer to single-digit.  Legacy deals for Comedy Central, for example.  As they come up for renewal, opportunity to jack prices.

TV ad pricing:  Still seeing the “double-digit” price increases mentioned in Q2…

Cable Ratings:  Yes, encouraging signs in August.  (Hits fat Noto softball out of park).  Area we have concerns about: MTV.  But Sept looking good.

Blu-Ray / Hi-Def: “Why drop Blu-Ray support? (Other than $50 million payoff)?”  No comment on payoff.  HD hardware cheaper.

Movies in your future: Shrek 4, Madagascar 2

VOD Opportunity:  Big (natch).  Experimenting with dynamic ad insertion.

“Snackable content”:  Noto lobs out buzzwords.  Dauman takes cue: “Lots of snackable content!”  Snackable promotes our video content. Plays to our strengths.  We’re going to exploit.  Online world going toward “special interest” sites.  We’re going to address, going to get “network effect.”  [Not THAT network effect, presumably–the other one]

VMAs: We love you, Britney. 

Using cash flow:  Making small, judicious acquisitions. Taking advantage of “low stock price” to buy back shares. [Not-so-subliminal message: Looooooooow stock price.   Buuuuy nowwwww.]

Nickelodeon Hotels: Evaluating this hot new business opportunity.

Digital: Confirms will exceed $500 million in revenue this year (approx. 1/15th Google).