Deconstructing Viacom's BS

Let’s begin with an assumption. Quarterly reports to stockholders always include “forward-looking” statements. This is business-speak for what we used to call “evangelistically-speaking” in the counting of those attending a church rally or function. If 501 people showed up, evangelistically-speaking, that would mean “almost a thousand.”

You get my drift.

So Viacom CEO Philippe Dauman told shareholders yesterday that the company’s online properties collectively registered more than 40 million unique visitors in Dec. 2006, and ranked as the number one online entertainment destination and the 10th most popular destination on the web (according to PaidContent.org). The latter assertion is based on the former, and we don’t really know that those “unique visitors” are truly unique. Dauman is referring to collective properties, and determining uniques over multiple properties can be dicey. I’m not suggesting he’s lying, but 40 million is a hell of a big number.

Dauman also used year-over-year growth figures from January to make a case that pulling clips from YouTube was a smart strategy, even though that didn’t occur until February. We’ve seen nothing in the way of evidence to suggest that people have bolted from YouTube to Viacom properties, and Dauman’s own numbers would suggest that having the clips on YouTube didn’t interfere whatsoever with their growth and may have, in fact, actually contributed to the growth! I think using those January numbers to make a case was poppycock, and Viacom investors ought to be furious.

“As far as Google and YouTube, obviously we required them to take down over 100,000 of our clips that were appearing on the site. Our content was a substantial part of the traffic on those sites. We are very pleased to have more traffic on our sites since we took down our video from YouTube because we are able to monetize that as opposed to someone else doing so,” Dauman said.

This time, Dauman is, in fact, lying. No “forward-looking statement.” Just a simple fabrication.

He goes on: “At the same time, we are interested in deals that provide an additional distribution platform for our content as long as it respects our copyright. We think we can generate incremental revenues that way. That’s why we did the deal with Joost. It’s a great opportunity for consumer experience and meets all our criteria for content, controlled advertising relationships, as well as linking back to our sites. We are looking at this very strategically, as we have in the history of many decades of this company, of looking at every window in the development of content. We love being a pure content company. That is a great place to be, no matter what distribution platform there is.”

Here Dauman looks back at company history and essentially says, “Our strategy worked for us then and it’ll work for us now.” This is a very dangerous assumption, because reveling in the history of the content business is problematic in a world where it’s just damned hard to scale content.

Meanwhile, a Financial Times story gets it ALL WRONG, using the year-over-year January numbers as January to February in a piece that pumps Viacom’s YouTube strategy as a wise move. Now, I realize the Financial Times is in league with big business, but this story is so slanted that it’s vertical.

“Video streaming traffic on our sites has increased dramatically, an important validation of our strategy,” said Philippe Dauman, president and chief executive of Viacom, owned by media mogul Sumner Redstone.

Traffic to Comedy Central’s Website was up more than 90 per cent, MTV.com had increased by more than 50 per cent and Nickelodeon had seen more than 30 per cent more traffic in the past month, Viacom said.

Honestly, folks, you’ve really got to pay attention in following this story, because such disinformation can lead to bad strategic mistakes in the Media 2.0 paradigm.

If it looks and smells like BS, it’s probably BS. And that’s NOT evangelistically-speaking.

UPDATE: Sorry, folks, but I can’t leave this alone. Motherload, the Comedy Central streaming application, launched in October of 2005. One would certainly hope that streaming traffic would’ve been up between January 2006 and January 2007. *sigh*

Comments

  1. you do take into account that he was preaching to the choir, right?

    i can’t imagine too many viacom shorts get invited to this sort of lovefest.

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