TV Channels Drive 79% of Viacom's Stock Value

By
A A A
Share |

Viacom ( VIA ) competes with other media and broadcasting companies like Time Warner ( TWX ), News Corp ( NWS ), CBS ( CBS ) and Disney ( DIS ) in the media and entertainment business. Our price estimate for Viacom's stock stands at $58.36 , which is a roughly 10% premium to market price.

Viacom makes money through cable and satellite operators, such as Comcast (CMCSA), Time Warner Cable (TWC), and DirecTV (DTV) that pay Viacom a monthly fee for each of their subscribers that receive Viacom-owned channels such as Nickelodeon, MTV, VH1, and TV Land.  Viacom also sells advertising spots on its channels to advertisers like Coca-Cola Company (KO), Ford (F), and Procter & Gamble (PG).  These revenues are partially a function of the total number of U.S. pay-TV households. The modifiable chart below showcases how changes to this metric affect Viacom's stock value.

Viacom also makes money from DVD sales, box office receipts and TV licensing associated with films made by its Paramount studios.

TV Channels Represent 79% of Viacom's Equity Value

While Viacom operates a variety of business lines, it remains first and foremost a TV content company. We estimate that 79% of Viacom's value can be attributed to its TV channels like Nickelodeon, MTV, Comedy Central, VH1, BET Networks and Spike TV, while only 14% of its value comes from its film entertainment business.

This content focus has prompted Viacom to look towards new distribution platforms for added revenue. As we've previously noted, the company's recent agreement with Hulu could provide a complementary revenue stream on top of its traditional distribution arrangements (see our article Viacom's Deal with Hulu Makes Sense).

With TV content driving the company's stock value, we pose the following question…

Which TV Channel Contributes the Most to Viacom's Stock Value?

A) VH1

B) MTV

C) Comedy Central

D) Nickelodeon

Click a response above to see the answer

See our full analysis and $58.36 price estimate for Viacom



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: CBS , DIS , NWS , TWX , VIA

Trefis

Trefis

More from Trefis:

Related Videos

Stocks

Referenced

Most Active by Volume

89,970,926
  • $16.15 ▲ 0.12%
77,131,582
  • $58.94 ▼ 1.31%
67,336,935
  • $26.56 ▲ 1.68%
48,814,124
  • $86.20 ▲ 0.02%
47,526,126
  • $23.21 ▲ 0.78%
44,660,424
  • $23.91 ▲ 6.36%
38,799,699
  • $4.289 ▲ 4.36%
36,199,890
  • $40.01 ▼ 0.97%
As of 4/17/2014, 04:07 PM