VIAB
#Thank you, <UNK>.
Yes as far as ---+ look, we obviously are still only in the early part of the second month of the quarter.
But we ---+ and so we are not assuming immediate ratings improvement and giving our prognostications.
We are giving you our best guess and trying to be realistic about the quarter.
The reason that we have a view that we are going to resume ---+ to resume growth in advertising revenue in the full fiscal year next year is that obviously we had a tough year this year.
We have begun to expand the scale of our targeted advertising initiatives, Viacom Vantage, Viacom Velocity, we have added a lot of human resources to those efforts.
It was an important part of our upfront discussions with major advertisers.
And by the way, given the overall difficult nature of the upfront marketplace, which the overall television market was down in volume, we did well and came very, very close to the level of volume that we had last year notwithstanding what took place in the ratings.
We have a larger volume of signature original shows.
We have more events that we are ---+ event shows we are building, we have more scripted series.
These are higher value and we are increasing accordingly our ad revenues from significant advertisers who want to engage with those kinds of programs on our networks.
And again, our distributor partners are enhancing their own products and we are beginning to see some ramp up in things like dynamic ad insertion and video on demand.
I mentioned new products in the mobile arena also offer advertising opportunities.
So we feel that we are going to be able to climb back up as we add all those different factors in.
Well, there are several aspects to what I will call the measurement issue.
So we do expect to see ---+ we want to see more in the ratings that matter.
There is more and more delayed viewing of programming.
So obviously the live, same-day kind of ratings become less and less meaningful as we go forward.
And so, I think in terms of what is the currency today, the C3, there is a lot more viewing taking place in that 2 and 3 part.
Then there is also more viewing taking place beyond that and there is also viewing taking place on other platforms.
This is where our Viacom Vantage product, which we have now introduced in a major way with 10 of our largest advertisers in different sectors and we are going to add to that number, allow us different measurement metrics to complement the traditional ratings and therefore improve monetization.
What we found across our schedule is that we have better ratings on our prime dayparts.
Where there is significant weakness is in other dayparts where you have a lot of repeats, off-network syndication, this is true across television.
So ---+ and that is in part because there is a lot of choice on the part of viewers.
This is why strategically we are increasing the amount of original programming and a lot of it, as I mentioned, whether it is animation, whether it is serialized low-cost programming that we run across dayparts for example on Nickelodeon, we are working to improve the performance of those dayparts.
The original shows that we are launching, particularly when you add the other viewings taking place, measure fully up to what we were achieving on shows that aired over the last several years.
So a show like Bella and the Bulldogs is performing at the same kind of level when you add the ---+ there is delayed viewing on all the rest as iCarly did when it launched.
So this is a process that is not overnight day by day, but it is a continual adjustment which we are doing.
The personnel realignment and improvements that we are making are bearing fruit already.
There is ---+ we are accelerating ---+ accelerating is a word we use a lot here at Viacom.
So we are accelerating our efforts to speed up next seasons of shows that work.
Like the Teen Wolf example I gave you, we are accelerating the development and production of the kind of programming that works whether it is scripted series, animation, events.
We very recently had the second annual Kids Choice Sports Awards, which is a new event.
And it is a very successful and popular show with advertisers.
The BET experience also recently launched and continues to grow year after year.
So we will continue to look to add the kind of programming that works particularly well with the young audiences and the millennial audiences.
That includes on-air talent.
I am personally very excited about the potential of Trevor Noah on The Daily Show in reaching and bringing to that great show a younger average audience, which is a hard audience to reach.
We are ---+ if you want to get reach on young audiences, if you want to get kids, if you are a toy company, Nickelodeon is the place to be.
So we are being extremely proactive in taking all measures that are necessary to address the changing media landscape, and it is a changing media landscape.
I think we will come out on the other side in a much stronger place.
When I said we did very well in the upfront, we did very well in the kids upfront.
So one of the flipsides of our having challenging ratings on Nickelodeon is that some endemic advertisers who had thought that they could get into the scatter market to get into that hard eight to push some of their product found that they couldn't get in ---+ not because we didn't want them to come and but we had scarcity.
So we had a lot of scarcity in it.
So we ---+ some of these players came back in into the upfront marketplace.
So, we believe we have made adjustments, that is in answer to an earlier question.
That is why we have optimism that the situation on ad revenues will improve as we get into next year.
In part as the fruit of our labors in addressing the issues that we saw.
Yes, as I said, we successfully concluded ---+ you mentioned Charter, we successfully concluded our renewal with Charter.
We have a good strong relationship.
I assume it will be a growing relationship as the transaction of its progress continues.
And we talk about ---+ we have a common interest with our distributors.
Our common interest, as has existed before, is to work together to improve the value of the ecosystem to consumers.
Now there is work to be done there.
Charter is an example of a company that is being proactive in providing more video on demand, more availability of networks on multiple devices inside the home, outside the home.
As those initiatives come to fruition the value for the consumer will expand; the churn rate should improve.
So there is a very positive impact on having on the distribution side forward-looking operators who will build the ecosystem which benefits both sides, because the value of what they are offering consumers depends on the content.
And we and many of our competitors are continually increasing the value of the content, we are producing more original programming.
We are less reliant on old shows, 20, 30, 40-year-old shows.
We are providing fresh content that is going to be usable in more ways.
And so, we view all distributors as our partners and as we do renewals we discuss all these new services.
And we, as I said in some cases, we are full marketing partners with them in promoting our services but also the value of the overall product.
Operator, we have time for one more question.
Thank you, <UNK>.
As it relates to Channel 5, the deal that we have done with our partner, Sky UK, was a pre-existing [partnership] that involved our Cable Networks.
We did a very significant deal where we extended our affiliation agreements for multiple years and we work together and we ---+ and they will be handling our advertising inventory along with our Cable Networks.
That is a very positive step, as you know.
Channel 5 had some issues with one of the advertising agencies in the UK entering into the Sky UK deal, resolve that issue as we go forward.
So it was a very significant deal.
Channel 5 is proving to be a very important and successful strategic acquisition for us.
As I mentioned, it made us the second largest private media network company in the UK.
It gives us a lot of programming heft, which benefits us in the UK, but will also fuel a rapid expansion of our networks especially in Europe, as well as driving our consumer products business.
And of course it came with a lot of favorable financial attributes which lowered the effective purchase price.
As far as retransmission possibility down the road in the UK, I don't know what will happen there.
It is certainly not an immediate prospect.
It is not something we factored in in our acquisition plan, nor in our strategic plan.
And we will see where that goes.
We are not at all dependent on that in moving our overall UK business forward in a very positive way as it has.
We want to thank everyone for joining us for our earnings call.
