Viacom Profits Rocket Despite Eddie Murphy's Sabotage Attempt

Viacom VIAB saw profits jump an astounding 56% in the second quarter after raising the subscription fees on its pay-tv services on its customers. It remains to be seen if all of those customers will stick with VIAB throughout the year. It is a risky strategy for a company who relies on customers sticking by the company, not cancelling subscriptions. Comcast CMCSA has certainly been feeling the same pressures of late. But with competition from other cable providers plus satellite and internet TV ever-increasing, it seems almost foolhardy to start upsetting customers for the sake of immediate rewards. That is obviously speculation and it remains to be seen how things work out for both VIAB and CMCSA during the remainder of the year. For now, things look good. Viacom reported earnings of $585 million, or $1.07 per share, up from $376 million, or $0.63 per share, in 2011. Revenue went up 2% to $3.33 billion. To be fair, in addition to raising fees, VIAB benefited from lower expenses at the Paramount Pictures movie studio. However, it wasn't helped by the diabolical Eddie Murphy movie A Thousand Words. "Across our divisions we sharpened our focus on execution and efficiency while continuing to invest in programming that connects with audiences worldwide," Viacom CEO Philippe Dauman said on Thursday. "Distribution continues to be a strong and steady driver for Viacom." The company's media networks, including MTV, Nickelodeon, Comedy Central, and VH1 brought in the lion's share of the earnings, with revenue from those channels being boosted by 5% to $2.2 billion. However, revenue at Paramount Pictures dropped by 5% to $1.17 billion thanks, it says, to a weird mix of releases during the quarter. The horror movie The Devil Inside was made on a relative shoestring for $1 million and it brought in $53,261,944 domestically and $47,825,535 in the foreign market. Obviously, that's a healthy profit. On the other hand, A Thousand Words was made for $40 million and only made just over $20 million worldwide. Still, if The Devil Inside is making a $99 million profit, maybe they can afford to lose $20 million on a dreadful Eddie Murphy comedy. Benzinga's Louis Bedigian wrote a story in March addressing the failure of the Murphy film. Fizziology's Ben Carlson told Bedigian that, "Here you have a movie with a really expensive movie star [Eddie Murphy] at the heart of it. I think it ended up right where Silent House ended up at $6 or $7 million [in the U.S.]. That's amazing. Of all the movies, that's the one. I don't think that was a surprise, necessarily." Follow me @BCallwood.