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VIACOMCBS INC.

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ViacomCBS : Bank of America Media, Communications & Entertainment Conference Corrected Transcript

09/16/2021 EDT

Corrected Transcript

14-Sep-2021

ViacomCBS, Inc. (VIAC)

Bank of America Media, Communications & Entertainment Conference

Total Pages: 11

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ViacomCBS, Inc. (VIAC)

Corrected Transcript

Bank of America Media, Communications & Entertainment Conference

14-Sep-2021

CORPORATE PARTICIPANTS

Naveen Chopra

Executive Vice President & Chief Financial Officer, ViacomCBS, Inc.

.....................................................................................................................................................................................................................................................................

OTHER PARTICIPANTS

Jessica Reif Ehrlich

Analyst, BofA Securities, Inc.

.....................................................................................................................................................................................................................................................................

MANAGEMENT DISCUSSION SECTION

Jessica Reif Ehrlich

Analyst, BofA Securities, Inc.

Welcome back everybody. I'm Jessica Reif Ehrlich, Senior Media and Entertainment analyst at BofA Securities. It is my pleasure to welcome Naveen Chopra, CFO, ViacomCBS.

[indiscernible] (14)

.....................................................................................................................................................................................................................................................................

Naveen Chopra

Executive Vice President & Chief Financial Officer, ViacomCBS, Inc.

Hi, Jessica. Thanks for having us.

.....................................................................................................................................................................................................................................................................

Jessica Reif Ehrlich

Analyst, BofA Securities, Inc.

Thanks so much.

2

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ViacomCBS, Inc. (VIAC)

Corrected Transcript

Bank of America Media, Communications & Entertainment Conference

14-Sep-2021

QUESTION AND ANSWER SECTION

Jessica Reif Ehrlich

Analyst, BofA Securities, Inc.

Q

Well, never a dull moment with ViacomCBS. You just announced that, literally in the last hour or so, announced that Brian Robbins is going to be President and CEO of Paramount Studios (sic) [Pictures ] (00:29). In addition, David Nevins has expanded his responsibility to include Paramount Television Studios. Could you talk about the rationale behind the leadership change and what looks like another reorganization?

.....................................................................................................................................................................................................................................................................

Naveen Chopra

Executive Vice President & Chief Financial Officer, ViacomCBS, Inc.

A

Yeah, sure. Look, Jim leaves some very big shoes to fill at Paramount. There's no doubt he has helped revitalize the studio both creatively and financially. But I think Brian is really the perfect person to take the reins from here. I've had the opportunity to get to know him a bit over the past year and I think he is definitely someone who brings incredible, creative, and strategic insights to the business. He's a very passionate storyteller and he understands the importance of leveraging our franchises, as well as building new franchises.

You see it in what he's done to-date with SpongeBob, what he's done with PAW Patrol, what he's done with iCarly, what he's starting to do with things like Teenage Mutant Ninja Turtles. But that experience goes well beyond just kids programming. I mean, he's been a director, he's been a producer, he's helped found Awesomeness TV. He led Paramount Players when he was previously at Paramount. So, I think he understands the perspectives of all of our many constituents in the filmmaking industry. And that's really critical, because we're obviously, as is sort of always the case in our industry, undergoing a lot of change. And I think Brian understands that in order to successfully navigate that change, you have to figure out how to leverage the benefits of the traditional parts of the business, including theatrical distribution, while also aggressively embracing streaming and changes in consumer behavior. So, I'm very excited about where Brian will be able to take things in the future. Similarly, the transition of Paramount TV going to David Nevins, I think, will be a very accretive move for us. David is someone that just has an incredible track record of creating culture-defining content that is both commercially successful and critically acclaimed. And now he will be able to do that with an even broader purview. So, look, at the end of the day, we're a content company. And I think that what Brian and David will be able to do to help take our content assets to the next level to feed multiple parts of our business is going to be really a great win for us.

.....................................................................................................................................................................................................................................................................

Jessica Reif Ehrlich

Analyst, BofA Securities, Inc.

Q

Great. So, continuing on the content theme and film, there is a significant change occurring right now in the industry for films and its various windows starting with theatrical. It's been - I've never seen anything like what we've seen in the past year in terms of release strategies and schedules changing. So, if we're in an environment where windows are shrinking, which they clearly are and our return to theaters at pre-COVID levels is unclear, do you think that the value of the film is worth less today than it was two or three years ago?

.....................................................................................................................................................................................................................................................................

Naveen Chopra

Executive Vice President & Chief Financial Officer, ViacomCBS, Inc.

A

No. Movies are extremely important to us. They continue to be a very unique storytelling medium that are critical to developing franchises and really being able to connect with audiences. Movies have always had the ability to be monetized through multiple different channels, and the difference is that today, we have more distribution

3

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ViacomCBS, Inc. (VIAC)

Corrected Transcript

Bank of America Media, Communications & Entertainment Conference

14-Sep-2021

options for our films than we've ever had. And you're starting to see us experiment and take advantage of that in a lot of different ways. If you take our most recent release of PAW Patrol as one example, that's a movie that we released day and date in theaters and on Paramount+.

Now, a lot of sort of conventional wisdom would say while streaming and theaters are going to cannibalize one another, but in this case, what we saw was that PAW Patrol's box office results actually exceeded the expectations that we set when we thought it would be an exclusive theatrical release, meaning that the simultaneous release on P+ and theaters was very synergistic. I think the streaming release definitely helped drive awareness and interest in seeing the movie in a theater, and obviously, the theatrical release did a lot to eventize the release of the movie on Paramount+ and really drove it to very quickly become one of the most watched originals that we've released on the service.

And then in the case of PAW Patrol, there's also a whole consumer products angle that I think greatly benefited from the broader distribution and all of the incremental promotion and awareness that goes along with that.

Now that being said, it's not a one-size-fits-all approach. You've seen us use different windowing strategies for other movies. A Quiet Place Part II as an example was a movie that had an exclusive theatrical release with a fast follow 45 days later on Paramount+. And then we've done other movies that we've released as streaming exclusives, things like Infinite and which we will do with the next installment of Paranormal Activity. So, the reality is that, what we're doing is we're looking at our films on a case-by-case basis. And we're trying to optimize based on the specifics of the movie, based on other constituents that are involved and quite frankly, the realities of the pandemic. And we're trying to make the best decisions for each of those movies. And so far, I think it's worked very well in terms of both helping our streaming services, creating opportunities for theatrical release when possible and ultimately, continuing to build our franchises and our IP and helping us connect with audiences.

.....................................................................................................................................................................................................................................................................

Jessica Reif Ehrlich

Analyst, BofA Securities, Inc.

Q

So, one more on film before we [ph] do (07:25) talk about all of your streaming services and that's - could you give us the rationale for delaying your theatrical film releases, your 2021 releases into 2022, especially in light of the performance of some of the more recent films that have come out?

.....................................................................................................................................................................................................................................................................

Naveen Chopra

Executive Vice President & Chief Financial Officer, ViacomCBS, Inc.

A

For the big releases, a Mission Impossible, a Top Gun, those are really pandemic-driven decisions. The fact is that the theatrical environment is still very dynamic and very different in different parts of the world. And we just have found that in order to really maximize the value of those assets, it makes sense to wait. And again, we will continue to look at this on a case-by-case basis as the situation evolves. But I think that really the key thing is that it is not one-size-fits-all. We're going to look at every movie depending on what we think makes sense for that particular movie at that particular point in time. And as I said, I think so far, we've had a pretty good track record there.

.....................................................................................................................................................................................................................................................................

Jessica Reif Ehrlich

Analyst, BofA Securities, Inc.

Q

Okay. Let's move on to Paramount+. Can you talk about what particular content or genres you're seeing the greatest engagement on Paramount+? And based on the consumer behavior that you've seen so far, are you revising at all how much you allocate to TV versus films or any other types of content?

.....................................................................................................................................................................................................................................................................

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ViacomCBS, Inc. (VIAC)

Corrected Transcript

Bank of America Media, Communications & Entertainment Conference

14-Sep-2021

Naveen Chopra

Executive Vice President & Chief Financial Officer, ViacomCBS, Inc.

A

Yeah. So, Paramount+ is intentionally a broad service. A lot of the existing large-scale streaming services, probably with the exception of Disney+, have really focused on big scripted dramas for adult audiences, and we know in part from our experience in a linear world that there's a whole world of viewing out there that is drawn to sports, to news, to unscripted content, to kids content, and we're trying to really lean into that. I think it allows us to differentiate Paramount+, it allows us to serve multiple members of a household, and it maximizes engagement, acquisition, consumption on our service, all of which are critical to ultimately driving lifetime value. And that strategy you can see in the content that is resonating on Paramount+ today and what has helped drive the service over the last few months. You look at the strength we've had in kids content with things like our reboot of iCarly, movies that we've released on the service, whether that's a SpongeBob, PAW Patrol, Infinite, those have all helped drive acquisition. Sports has been very powerful. In fact, we just finished the - our opening weekend of the NFL, which - where we saw more viewers consuming NFL content on our streaming platforms than on any opening weekend to-date. So, we continue to be excited about that as a differentiator for Paramount+.

We've had some great success with shows that have big, well-known IP and libraries associated with them. Think of a Survivor or a Big Brother. And we've also had success with unscripted content. RuPaul's Drag Stars - excuse me - All Star Drag Race (sic) [RuPaul's Drag Race All Stars] (11:16) was a very popular title on Paramount+. So, it does span a lot of different genres that's by design. And we think it's - it will continue to be a strength going forward. And that's reflected in what we have coming up from a content perspective, which I think is equally exciting to what we've done. The CBS fall season will come to Paramount+ soon, which means a lot of our perennial hits in NCIS, FBI, as an example, SEAL TEAM, we're going to do an interesting thing where we'll have four episodes going on CBS, which will then launch it to become an exclusive title on Paramount+.

We will be launching two original South Park movies later this year. We'll have some big scripted dramas exclusive to Paramount+ from Taylor Sheridan, including the Mayor of Kingstown, which you've started to see some promos that I think look really, really cool, and Y: 1883, which is the backstory for Yellowstone, which, as you know, is one of the most popular shows on cable today. We also have some great kids programming coming in later this year, Star Trek: Prodigy, which will be another part of our broader Star Trek franchise tailored at younger audiences is a great show, and I think will contribute to Paramount+ as well. So, it's all about breadth, it's all about serving a lot of different audiences and continuing to differentiate our service.

.....................................................................................................................................................................................................................................................................

Jessica Reif Ehrlich

Analyst, BofA Securities, Inc.

Q

How should we think about reprioritization of content spend away from the linear business [ph] and to (13:04) your streaming businesses? And what does that say about your overall content spend for the company over the next couple of years?

.....................................................................................................................................................................................................................................................................

Naveen Chopra

Executive Vice President & Chief Financial Officer, ViacomCBS, Inc.

A

Yeah. Well, like if you step back, the reality is our business is becoming more and more streaming-oriented. Streaming revenue will be roughly 15% of total company revenue this year and obviously, meaningfully higher next year. So, you'd expect that our streaming content expenses would grow as we lean more into streaming. We said as much during our Investor Day back in February, I think at that point I indicated that we expected streaming content expense to exceed $5 billion by 2024 that's compared to about a $1 billion in 2020. We're already starting to see that happen. I think this year streaming content expense will be more than double what it was in 2020. But

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Disclaimer

ViacomCBS Inc. published this content on 16 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 September 2021 17:21:03 UTC.


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Robert Marc Bakish President, Chief Executive Officer & Director
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Philip R. Wiser Chief Technology Officer & Executive VP
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