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Viacom is preparing for a round of job cuts following ratings and ad sales declines
Ethan Miller/Getty Images for Comedy Central Viacom-owned Comedy Central broadcasts "The Daily Show," but host John Stewart announced he was leaving this month. Viacom, owner of the Comedy Central and MTV cable TV networks, is preparing to lay off staff across the company following declines in both ratings and advertising sales as viewers continue to switch off from traditional TV, according to a Bloomberg report.
The report, which cites sources "with knowledge of the matter," does not detail exactly how many staff will be affected as part of the restructure.
The reorganization will see Viacom merging its three business units into two: Forming one group for music and entertainment programming, and another for children and family shows, according to Bloomberg.
Viacom chief executive officer Philippe Dauman had hinted the changes on the company's Q1 earnings call, in which he said: "We have identified specific areas where we can work more efficiently while focusing better on the evolving needs of our customers and audiences. These changes are well underway and will result in substantial net cost savings throughout our organization, while at the same time increasing our focus and investment in areas with the highest growth potential."
The restructure will follow the departures of two senior Viacom executives: MTV and VH1 veteran Van Toffer and TV Land president Larry Jones.
Viacom's fiscal Q1 revenue missed analysts' estimates, due to falling TV ratings and a drop in domestic advertising. Revenue increased 4.6% to $3.34 billion in the three months to December 31, but analysts had forecast revenues of $3.4 billion for the period.
Domestic ad revenue dropped 6%. US TV ratings across MTV and Comedy Central have declined more than 10% amongst its important 18-to-49-year-old demographic in the period, according to Nielsen data. That decline has increased to more than 16% in this current season, according to the latest Nielsen data, while ratings across its BET network have declined 23%, and TV Land is down 26%.
Overall, in January (not the period in which Viacom reported its Q1 results), the US cable TV advertising market saw a 5% uplift year-on-year, according to the latest Standard Media Index (SMI) data, which captures 80% of total US advertising agency spend. This growth was driven mainly by a strong performance by ESPN, SMI says.
However, broadcast TV saw revenues drop 6% in January due to the soft performance of prime time and the shift of the Grammy Awards on CBS from January to February this year.
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