Viacom's Dauman: YouTube Wasn't Best Environment For Content

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Viacom President Phillippe Dauman says that traffic to Viacom's sites has increased since the company had YouTube pull some 100,000 clips of Viacom programming from its video-sharing site.

Dauman said that one of the reasons Viacom forced their removal was that the company wanted to better control the environment for its branded product.

He said he didn't think advertisers would be paying a lot to be in an environment where a clip of a cat going to the bathroom is a popular offering.

"We want to provide a quality environment they are comfortable with and will pay more for," he told analysts at a Bear Stearns Media Conference in Palm Beach, Fla. He pointed to the company's recent deal with Joost, a content-hosting company that will allow Viacom to put content online on a site it controls, with high-quality streaming, and links back to Viacom's own sites, he said.

While Viacom's U.S. margins are close to 50%, Dauman said he hoped to maintain them even having to invest in more original programming and getting its digital sales operation up to speed. To help in that effort, he has cut jobs and salaries and restructured, saying there were redundancies and people who were, frankly, overpaid.

Dauman pointed to the affiliate sales side, where sales people have been taken off commission and their salaries tied to bonuses for meeting broader business objectives.

Asked whether he thought that process had created a company that was not as fun or cool to work for as it had been, he said no. He conceded there had been some staff anxiety over the changes, but that he thought the people who remained had a better sense of the company's mission and that those people were part of the reason he took the job last Labor Day when, no pun apparently intended, he said he had "dived into" the company's operations to review all aspects of the business, the result of which had been the recent restructurings.

Dauman said the key to Viacom's growth would be to focus not just on content, but on the demos that drive the new media environment, which he said were Viacom's demos. He said he still saw a strong business in advertising sales and affiliate fees from its traditional programming networks, but that the key was to immerse media consumers, creating virtual worlds that linked to those networks and that could be monetized by advertisers.

Asked whether the executives running traditional media companies were simply great jockeys riding dinosaurs, Dauman suggested it was too soon to relegate them to the tar pits.

"I think there is a lot of growth opportunity in our core business," he said. Online will be ad addition, but he said that traditional ad sales and affiliate fees were still growth areas. There wasn't as much growth last quarter, but he said that was in part because the company's networks did not have a lot of original programming, something that was already being rectified.

In a fragmented world, he said, the ability to reach key demos in a branded way becomes  more valuable. "Our business is to reach consumers through our content everywhere they are, and sell to advertisers that consumer relationship."

That immersion includes online shows, gaming and virtual worlds. He said, for example, that new virtual world, Nicktropolis, is on track to have a million registered users after only about six weeks.

Dauman said the increased activities on other platforms like online and mobile had not seemed to hurt viewership. For example, he said, Comedy Central is on track to have its highest rated quarter ever.

On the international side, Dauman suggested that the company had spread itself a bit thin, "planting its flag in 160 countries." He suggested that maybe in 60 or so of those, it might have been a better idea to license programming to others rather than run their own channel.

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