Viacom has been doing pretty well with their t.v. sector as their cable networks has been performing well. The box office has also done well with critically acclaimed, Oscar-nominated films that premiered in the last quarter. But their home entertainment arena is suffering. According to “Viacom Profit and Revenue Decline as DVD Sales Drop” by Tim Arango, revenue in home entertainment dropped 44%. The 44% decrease dropped overall revenue by 5%. Despite whatever other positive earnings the company had, DVD decline offset it all.
Phillippe Dauman, President and COO, responded with confidence that Viacom would bounce back in the upcoming quarters. He stated: “We expect our home entertainment results to improve as we now move past the last few quarters of difficult year-to-year comparisons.” But the reality is DVD sales have dropped because home entertainment has evolved to on demand streaming. Netflix previously reported having an amazing fourth quarter, and Amazon will be going into the media streaming business also. A 44% decline is not just a bad quarter but also a sign that Viacom needs a different strategy for their home entertainment sector.
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