MUMBAI: US media giant Viacom has seen a drop in its profits due to the impact of the economic downturn and drop in box office revenues.
Viacom, which owns Paramount Pictures, saw second-quarter profits fall to $277 million, from $407 million for the same period a year earlier. The company’s revenues were down 14 per cent to $3.3 billion. Operating profit at the networks unit, including Nickelodeon and BET, declined 12 percent to $671 million, on an 8 percent drop in revenue.
"This decline reflects the underperformance of certain theatrical releases, lower home entertainment profits and the timing of the theatrical release of Transformers: Revenge of the Fallen late in the quarter," Viacom said in a statement.
"While the global economy continued to be a challenge in the second quarter, the diversity of our revenue streams, sequential improvement in our domestic advertising sales, our generation of cash and our operational discipline all helped to temper the short-term impact," added Viacom president and CEO Philippe Dauman.
The filmed entertainment division made an operating loss of $25 million as compared to an $86 million profit a year earlier. Revenue slid fell 27 per cent to $584 million. There was a 29 per cent decline in home entertainment revenues from Q2 last year.
While movies like Transformers: Revenge of the Fallen and Star Trek did well at the box office, other films like Imagine That underperformed coupled with falling home- entertainment sales. Transformers: Revenge of the Fallen has earned more than $785 million at the worldwide box office till date.
"Both films – Star Trek and Transformers: Revenge of the Fallen – are unqualified blockbusters that will generate substantial profit as they move through their windows," said Dauman.
US ad revenue fell six per cent at the cable networks, including VH1 and Comedy Central, after declining nine per cent in the first quarter.