Viacom () (), short for "
Video &
Audio
Communications", is an
American media conglomerate with various worldwide interests in
cable and
satellite television networks (
MTV Networks and
BET), and
movie production and distribution with
Paramount Motion Pictures Group. Paramount is also the distributor of movie studio
DreamWorks.
Sumner Redstone is the
chairman and, through
National Amusements, the majority
shareholder. It is headquartered in
Midtown Manhattan,
New York City.
The new Viacom (legal successor to the former
Gulf+Western/
Paramount Communications) is considered to be the "high-growth" side of the much larger former Viacom. The former Viacom was
renamed CBS Corporation, from which this firm was split off on December 31, 2005. CBS, not Viacom, retains control of the over-the-air broadcasting, TV production, and publishing assets formerly owned by the larger company. However,
National Amusements remains the common majority shareholder of both firms.
As of 2008, Viacom is one of the world's largest
media conglomerates, behind
Walt Disney Company and
News Corporation.
History
Early years
In March 2005, the
prior Viacom (now known as CBS Corporation) announced plans of looking into splitting the company into two publicly traded companies. The company was not only dealing with a stagnating stock price, but also the rivalry between
Leslie Moonves and
Tom Freston, longtime heads of
CBS and
MTV Networks, respectively.
After the departure of
Mel Karmazin in 2004, Redstone, who served as
Chairman and
Chief Executive Officer, decided to split the offices of
President and
Chief Operating Officer between Moonves and Freston. Redstone was set to retire in the near future, and a split would be a creative solution to the matter of replacing him.
The split was approved by Viacom's board June 14, 2005, and effectively undid the Viacom/CBS merger of 1999. The original Viacom changed its name to
CBS Corporation and is headed by Moonves. It now includes Viacom's "slow growth businesses", namely
CBS,
The CW (formerly
The WB and
UPN),
CBS Radio,
Simon & Schuster,
CBS Outdoor,
Showtime,
CBS Records,
CBS Television Studios and most television production assets.
According to some analysts, these were suffocating the growth of the MTV Networks' cable businesses (the split was structured such that CBS Corporation is actually the company previously known as Viacom). At the time of the split, CBS Corporation was also given control of
Paramount Parks. CBS sold Paramount Parks to
amusement parks management company
Cedar Fair, L.P. on June 30, 2006.
A new company, the present Viacom, was also spun-off and was headed by Freston. It comprises MTV Networks, BET Networks, and Paramount Pictures' movie studio and home entertainment operations. These businesses are categorized as the high-growth businesses (MTV Networks and BET Networks in particular), and if they were split into a separate company, it could infuse new capital to allow for future acquisitions and expansion.
Sumner Redstone still controls 71 percent of the voting stock of both companies, and is the chairman of both companies.
2005
In June, Viacom announced its purchase of
Neopets, a virtual pet website. That December, Paramount announced it would acquire
DreamWorks. All indications are that the whole of DreamWorks - both live-action film and TV studios, albeit not the DreamWorks archive - which was sold to a group led by
George Soros in March 2006 - (nor the
animated unit, which was not part of the deal) will remain owned by Viacom, even though CBS acquired Paramount's own TV studio.
2006
On February 1, Paramount completed its long-awaited acquisition of DreamWorks. On April 24, Viacom obtained
Xfire. In August, just hours before announcing its most recent quarterly earnings, Viacom announced that it had acquired
Atom Entertainment for $200 million. In September, Viacom acquired game developer
Harmonix for $175 million dollars.
2007
In February, Viacom ordered leaked copyrighted video clips be taken off the videosharing service
YouTube for copyright reasons. On February 21, Viacom publicly announced they would be offering free online access to their own material through Silicon Valley's distributor
Joost thanks to a thorough content licensing deal.
On May 21, Viacom entered into a 50-50 joint venture with Indian media company
Global Broadcast News to form
Viacom-18 which will house Viacom's existing channels in India - MTV, VH1 and Nick as well as
Network 18's
Bollywood movie business. All future Viacom content for India and new ventures such as a
Hindi entertainment channel and a
Hindi movie channel would be housed in this joint venture.
On December 19, Viacom signed a five year, $500 million contract with
Microsoft that included content sharing and advertisement. The deal allowed Microsoft to license many shows from Viacom owned cable television and film studios for use on
Xbox Live and
MSN. The deal also made Viacom a preferred publisher partner for casual game development and distribution through MSN and
Windows. On the advertisement side of the deal, Microsoft's Atlas ad-serving division became the exclusive provider of previously unsold advertising inventory on Viacom owned web sites. Also, Microsoft purchased a large amount of advertising on Viacom owned broadcasts and online networks. Finally, Microsoft will also collaborate on promotions and sponsorships for
MTV and
BET award shows, two Viacom owned cable networks.
2008
On December 4, three weeks before
Christmas, Viacom announced layoffs of 850 personnel, or 7% of their workforce. At the end of the year,
Time Warner Cable (along with partner
Bright House Networks) and Viacom's
MTV Networks could not come to terms for the renewal of any Viacom channel beyond the end of year. Time Warner Cable's operations include New York City and Los Angeles, with Bright House including the Tampa Bay and Orlando markets, both top-20 markets. This blackout was narrowly avoided when a zero-hour deal was reached shortly after 12 Midnight ET on January 1, 2009.
Copyright complaints against YouTube
In February 2007, Viacom sent upwards of 100,000
DMCA takedown notices to the video-sharing site
YouTube, alleging large-scale copyright infringement. Of the 100,000, approximately 60–70 non-infringing videos were erroneously removed under the auspices of copyright infringement.
On March 13, 2007, Viacom filed a US$1 billion
lawsuit against
Google and
YouTube alleging massive
copyright infringement, alleging that users frequently uploaded copyrighted material to
YouTube—enough to cause a hit in revenue for Viacom and a gain in advertisement revenue for
YouTube.
The complaint contends that almost 160,000 unauthorized clips of Viacom’s programming have been available on YouTube and that these clips had collectively been viewed more than 1.5 billion times.
Judgment
YouTube users were outraged when US District Court Judge
Louis Stanton, on July 1, 2008 granted Viacom's request for data upon which
YouTube viewers watch which videos on the website to support its case in a billion-dollar copyright lawsuit against
Google. YouTube users were also outraged that he dismissed privacy concerns, directing Google to give Viacom viewing log-in ID / names of YouTube users and
Internet protocol (IP) addresses (online identifier) and video clip details, totalling more than 12 terabytes of data. The judgement was heavily criticized by Google and privacy advocates.
Simon Davies said that the privacy of millions of YouTube users was threatened: "The chickens have come home to roost for Google." Stanton however, denied Viacom's pleas "to get its hands on secret
source code used in YouTube video searches as well as for Internet searches, and to order Google to provide access to the videos YouTube users store in private YouTube files."
On July 14, 2008, Google and Viacom agreed in
compromise to protect
YouTube users' personal data in the $1 billion (£497 million) copyright lawsuit. Google agreed it will make user information and internet protocol addresses from its YouTube subsidiary anonymous before handing over the data to Viacom. The privacy deal also applied to other litigants including the
FA Premier League, the
Rodgers & Hammerstein Organisation and the
Scottish Premier League. The deal however did not extend the anonymity to employees, since Viacom would prove that Google staff are aware of uploading of illegal material to the site. The parties therefore will further meet on the matter lest the data be made available to the court.
Viacom International
As with the old Viacom, the current company owns Viacom International, which is the formal owner of copyrights associated with Viacom's corporate website and its cable networks. This division now owns the rights to a majority of
Elvis Presley films made for Paramount Pictures, such as
Blue Hawaii and
King Creole.
It also continues to focus on its own in-house productions made for its various networks (
MTV,
VH1,
Nickelodeon, etc.) – these programs include
Dora the Explorer,
Wow! Wow! Wubbzy!,
LazyTown,
SpongeBob SquarePants,
Catscratch,
The Hills and
Behind The Music.
Corporate governance
The previous
board of directors of Viacom were
George Abrams,
Vincent Erazo,
David Andelman,
Joseph Califano, Jr.,
William Cohen,
Philippe Dauman,
Alan Greenberg,
Charles Phillips,
Shari Redstone,
Sumner Redstone,
Frederic Salerno,
William Schwartz, and
Robert D. Walter.
Following the Viacom/CBS split, the Viacom board consisted of George Abrams, Philippe Dauman,
Thomas E. Dooley,
Ellen V. Futter,
Robert Kraft, Alan Greenberg, Charles Phillips, Sumner Redstone (Chairman), Shari Redstone (non-executive Vice-Chair), Frederic Salerno, and William Schwartz.
On September 5, 2006,
Tom Freston resigned from the company. He was replaced by Philippe P. Dauman.
Assets
This is a summary of the main Viacom divisions. For detailed assets see List of assets owned by Viacom.- Television Networks: Comedy Central, Logo, BET, Spike, TV Land, Nick@Nite, Nickelodeon, TeenNick, Nick Jr., MTV, VH1, MTV2, CMT, Palladia, The Fight Network
See also
