Cable Leads Viacom Advertising Recovery

Viacom, the owner of the MTV, Nickelodeon and CBS networks, said yesterday the United States' rebounding television advertising market had driven a 9.3% rise in third quarter profits to $700m (£413m).

Advertising revenues across the group improved by 8% - compared with the same quarter a year ago - to $2.88bn.

The strongest performance, though, was among Viacom's cable networks as viewers and advertising money in the US continue to shift into the pay-TV market. Cable has now overtaken free to air broadcast TV in the total number of viewers watching at key times.

The cable division reported 20% higher earnings. Advertising revenues at MTV were 26% higher while BET, which shows African American content, grew by 24%. At the broadcast networks owned by Viacom, CBS and UPN, the gain was a more modest 7%.

Viacom's president, Mel Karmazin, said the company continued to "see positive momentum" in the national advertising market. Group revenues increased by some 5% to $6.6bn.

Not all divisions performed strongly. Entertainment, which includes the Paramount film studio, suffered a 24% drop in earnings to $112m. The company blamed higher advertising costs for its films, which included the second Lara Croft movie.

The outdoor advertising business owned by Viacom also posted a 29% decline in income to $45m. The Blockbuster video rental chain pared back its advertising budget and reported a 25% gain in profits to $100m. Same store sales, however, were lower.