International Markets & Targeted Advertising May Benefit Viacom

August 8th, 2016 by Trefis Team
+206.71%
Upside
10.87
Market
33.34
Trefis
VIA: Via Renewables logo
VIA
Via Renewables

Viacom (NYSE: VIA) reported its Q3 results on August 5th, registering a 2% increase in revenues. We expect revenues to grow annually at a 3% rate to 2020, whihc is an improvement over the 6% decrease in the past year. We believe international market expansion and targeted advertising products will drive this growth. Viacom has a stronghold in India and the U.K. It is expanding further in Middle East and Africa. In addition, targeted advertising products such as Viacom Vantage may further support its advertising revenues.

International Expansion Is Likely To Pay Off

Nearly a quarter of Viacom’s media networks revenues have come from international markets over the last five years. Europe, Asia and Middle East have become significant contributors in terms of both advertising and affiliate revenues. We believe Viacom will continue to focus on expanding beyond the U.S..

  • MTV & Nickelodeon together reached 283 million homes outside U.S. which is 100 million more than their U.S. subscribers.
  • Viacom already has a strong position in the U.K (Channel 5) and India (Colors).
  • The company launched 15 new channels in Middle East and Africa in 2016.
  • However, Viacom still reaches just 40% of international pay-TV households, which is far below than that for the U.S. where it is around 80-90% levels. Digital platforms such Viacom’s Play Plex will help to capture additional market share.

                                                   

Unique Targeted Advertising Products Will Help

Advertising accounted for 50% of Viacom’s revenue in 2015. Targeted advertising products such as ‘Viacom Vantage’ and ‘Viacom Intent’ are likely to attract advertisers and help in sustaining growth. The effect of this growth was visible during the upfront sales season this year when 35-40 deals were secured on Viacom Vantage. Viacom Intent has partnered with American Express  to forecast commercial intent before it has formed and target the right moment in time to reach people. This would give advertisers powerful predictive insights which could provide extraordinary impact.

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to the full Trefis analysis for Viacom.
Relevant Articles
  1. Rising 21% This Year, What Lies Ahead For Exxon Stock Following Q1 Earnings?
  2. Should You Pick General Electric Stock At $165?
  3. What’s Next For JetBlue Stock After A Sharp 19% Fall Post Q1 Results?
  4. Is Kimberly-Clark Stock Fairly Valued At $135 After A Solid Q1?
  5. How Will AMD’s AI Business Fare In Q1?
  6. Up 9% Year To Date, Will Chevron’s Gains Continue Following Q1 Results?

View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research