The good news at the studio is a bit more muddled. Viacom points to the fact that the studio only released 5 movies this quarter compared to eight in the year-ago quarter, as a reason for the division's earnings shortfall. But two of those films last year, Son of Rambow and The Foot Fist Way (ever heard of them?) were such small releases they wouldn't have had much of an impact on last year's numbers. Dauman and Redstone rightfully bragged that Transformers 2 and Star Trek were two of the top three performing films of the year. But Dauman admitted that "consumers appetite for DVDs is showing fatigue." Translation: the DVD business, the studios bread and butter, is dying a slow death. And while Dauman talked about the fact that over a billion videos were streamed in the US in the second quarter, that digital revenue can't yet compensate for the decline in DVD sales.
Sumner Redstone is certainly in the spotlight today; he's awaiting offers for National Amusements U.S. theaters today. He said on the earnings call that the theaters have attracted "substantial interest... We are extremely pleased with the progress we are making, and I must say, we are extremely pleased with our relationship with our banks." Whether or not Redstone is pleased, investors are waiting to hear some hard numbers. The question is whether the theater sales can generate the cash to allow Redstone to cover a $500 million debt call he faces in October. This is of course quite relevant to CBS and Viacom shareholders, because a shortfall could force Redstone to sell CBS and Viacom stock.
After the bell today DreamWorks Animation reports earnings and tomorrow morning Time Warner and IAC Interactive report. I"ll be reporting on, and blogging about what the reports say about the economic recovery and what they mean for the industry.
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