Since he became CEO of Viacom nearly two years ago, Bob Bakish has been trying to clean up the mess previous management left behind. His efforts, from refocusing on six flagship networks—including MTV, Comedy Central, BET and Nickelodeon—to building out a digital studio and making acquisitions (notably AwesomenessTV), have helped stabilize the flailing youth-oriented media giant.
Viacom spent the summer in an awkward limbo. The company, and Bakish, were pulled into a war between former CBS CEO Leslie Moonves and Shari Redstone, whose family company, National Amusements, controls Viacom and CBS. But the drama came to an end over the weekend, when CBS and National Amusements announced an agreement that upended CBS's board of directors and prevents NAI from proposing a merger between the two companies for at least two years.
That leaves Bakish to focus on making networks like MTV relevant again and positioning the entire company for a digital future.
Bakish sat down with Ad Age in August prior to the settlement. A Viacom spokeswoman declined to comment on the settlement on Monday. This interview has been edited and condensed.
Were you a big TV house growing up?
I chuckled that HGTV just bought the Brady house because we used to watch "The Brady Bunch" way back.
You studied engineering in school. Did you imagine this is what you would be doing?
No. I went to engineering school. I went to business school. But both of them taught you to think about problems in different ways.
When you started as CEO, Viacom was in a precarious position. Ratings have rebounded a bit, but the problems plaguing the media industry aren't going away. How do you work through that?
One of the things that was true for Viacom circa November of 2016 was it hadn't had a plan for a long time. Our plan today has three parts: growing share and margins in our traditional business; accelerating our participation in next-generation platforms, distributions and solutions for advertising; and diversifying the business leveraging IP.
It's unlikely ratings will ever significantly rebound for linear TV, so how do you grapple with that?
There continues to be a strong opportunity to take share and grow viewing in TV. Take MTV. Again, November of '16, people were like, "It's over. It's not culturally relevant. Less and less people watch it every year." That was not a result of some kind of inherent problem with the brand, but due to execution. They had shifted to a strategy of scripted that made no sense.
You have to thank "Jersey Shore."
Well, if you look at what's driven it, they had five of the top 10 unscripted shows on cable. One of them is "Jersey Shore." There was this article written about me recently saying, "All I want to do is use the old stuff." It's like, no. But you would be foolish not to take advantage of your library.
A year from now, what does Viacom look like?
I'm focused on something that we said 10 years ago, which actually never happened, which is to make the company truly a global, multiplatform brand and IP-driven content company. We've had a series of brands that people have said should be a bigger player in this space, but we really weren't.
Your core viewers are young. Viacom should have led the way in digital.
I don't want to get into why we didn't. I can only tell you what we're doing. The first step, there's Viacom Digital Studios. Over the arc of two years, we've more than tripled our video consumption in digital.
You recently acquired AwesomenessTV and the influencer marketing firm WhoSay.
And VidCon. We've done a couple of small deals. A lot of people ask us, by the way, "What are you doing with M&A, are you going to do a big deal?"
What we're focused on right now—it's part of what I inherited too—was a balance sheet that wasn't great. Our stock's not that great on a multiple basis. So we have our challenges in terms of doing something big.
What's the white space you're looking to fill with these smaller acquisitions?
I'd still like to do another international cornerstone. Channel 5 in the U.K. worked out very well for us. Telefe in Argentina has worked out very well for us. But look, deals in general are hard to do.
A year from now, do you expect Viacom to be independent?
The real answer is it's hard to say.
What impact is the #MeToo movement having on the media and entertainment industries? Internally, how are you thinking about and approaching the treatment of women?
I think it's fundamentally related to culture. That's the best way to go at it and ensure you have transparency, ensure you have a culture that doesn't allow for bad behavior. I think having a balanced executive team, female-male, is helpful—not necessarily a total solution, but helpful. And we certainly have that if you look at Viacom, almost exactly half of our VP-and-up population is female. And even our exec-VP-and-up population is 42 percent. And our board is probably among the most female boards in the country.
But it's something that we take very seriously. We want to do our part to move our company and the broader industry forward. We spend a lot of time talking about it and should we find things that deviate from it, we take the appropriate action.
With its acquisition of Time Warner, AT&T argued that mergers need to happen in order for media companies to compete with digital behemoths. Do you think that's true?
Look, you can make the case that the whole world's going D-to-C [direct-to-consumer] and there'll be three bigger, vertically integrated companies and that's all that will exist. But a lot of these companies in the next year or so are going to be tied up in integration and legal battles, and as that's all happening we're executing, we're playing through. I'm not convinced at all these combinations will ultimately make sense. It's all going to come down to how they execute.
Do you think a CBS merger would provide enough scale?
I can't really comment on the CBS merger. I have commented before and said there's industrial logic to it and all, but there's litigation involved and so just park that for a while.
In streaming TV, are you looking to build out platforms for individual networks? What is the appetite from the consumer for buying individual $5.99 subscriptions and the like?
Ultimately, you could have a hybrid play with a broad, ad-supported front door that could bring people into the ecosystem and then you can have more targeted experiences. That's a more manageable place to get to versus thinking you're going to charge a hundred million people, pick a number, $10 a month. Kudos to Netflix for doing it, but look at any other product, nobody's close to that. I know the broadcasters have been planning it and they're making a big deal out of it, but they're like 2 million, 3 million—small numbers.
There are other ways to benefit from that ecosystem, including creating programming for it. I don't think anyone will be successful thinking that they're going to have all their product in one D-to-C space.
Viacom has talked about reducing commercials, but it still runs probably one of the highest commercial loads.
Yeah, we're on the high side.
What's a reasonable amount of commercials you think younger audiences are willing to put up with?
Look, we have an aspiration to lower loads over time. It's easier said than done, as others have also found out. Ultimately, it probably splits more dramatically—it's like you either have ads or you don't have ads.
What's your biggest priority for next year?
We're moving to a more fragmented world. There's going to be people who don't pay anything. There's going to be people who pay 200 bucks. There's going to be people who pay prices in between that. And we've got to make sure our brands are represented across that.