Viacom Headed South

Sumner Redstone's conglomerate has been getting knocked around just a bit.

Viacom shares are off after a dearth of Paramount hits and weaker ad sales hit the top line and revenues missed expectations.

Revenue by segment: Media Networks, $2.57B (down 3%); Filmed Entertainment, $612M (down 15%). Excluding negative impact from foreign exchange: Media Networks down 2%, Filmed Entertainment down 12%.

Filmed Entertainment also operated at a loss of $146M vs. a year-ago operating loss of $60M. Media Networks, meanwhile, showed an operating profit of $1.06B, down 4% year over year. Ratings hit the TV operations: Despite an increase in ad pricing, ad revenues dropped 4% domestically and international ad revenues fell 2%...

So Viacom the struggling conglomerate is in a sea of hurt. Even so, the company is sinking money into animation, building a new five-story building in Burbank, and digging in for the long haul.

It's true that Nick has lost its pole position in the animation sector, but it isn't crawling into a corner and curling up in defeat. It sees animation has a growth area, and given the resources its pouring into animation (and not just television animation; Viacom has a theatrical feature division housed on its Hollywood lot) it plans to use TV and theatrical cartoons as a profit driver going forward.