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UBS Media Conference: Viacom Chief - Split with CBS Caused No Harm

Philippe Dauman says Viacom has grown affiliate fees, bringing Hindi-language service stateside 12/07/2009 01:35:06 PM Eastern

Viacom CEO Philippe Dauman said his company had not seen any harm from its split from one time sister company CBS network. He said that the company had negotiated a number of carriage deals since its break-up from the broadcast network sibling and had not felt at a disadvantage.

"There is a lot of brain damage involved in bringing in an unrelated broadcast network and trying to use that as a club," he said.

Dauman said the company had been growing affiliate fees by 10%.

"We secured increases in the teeth of a recession," he said. He pointed out that ESPN didn't have that much benefit from its association with ABC. The reason ESPN gets dramatically higher fees is because ESPN has content that distributors and viewers feel that cannot do without.

He reiterated that Viacom has 20% of the viewing audience but only receives 8% to 9% of the affiliate fees paid by distributors.

"There's clearly an imbalance there," he said adding that networks owned by other cable companies won fees that were as high or higher than their ratings.

"So we are a junior partner," he said.

Speaking at the UBS Media Investor Conference in New York, Dauman told interviewer and former Disney CEO Michael Eisner that the advertising market was dynamic.

"The scatter market has been growing stronger as the quarter has progressed," he said, adding that advertisers are saying they also want to buy calendar upfront. Though he warned the company would find it tough to continue to sequential year on year improvement in domestic ad sales. Even direct response pricing is up strong double digits.

"Because pricing has firmed up, we do see more advertisers trying to secure inventory at prices as they exist today before they increase," Dauman said. "We had the opposite mentality, that has clearly turned, at least for now. That's a real positive and gives us more visibility."

Dauman also touched on the international cable market, saying that one Viacom service, named Colors, a Hindi-language service for India, would be brought to the US. The move is a first for Viacom which typically takes U.S. channel concepts and rolls them out internationally.

He added that premium movie channel Epix would soon announce other distributors beyond Verizon.

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