After pioneering reality TV in the early 90s with "The Real World," and not much since, Viacom Inc.'s MTV Networks has, in the span of a few months, grabbed a music-based video game developer, gone back to college, tried its hand at social networking and launched a Web-based, user-interactive version of its Laguna Beach teen drama series.
But all the dealmaking raises the question: Will Viacom and MTV's late-stage foray into the highly crowded markets prove profitable, if there's even room?
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TURNING UP THE VOLUME
MTV said Sept. 22 it would pay $175 million cash, and possible earnout payments based on financial targets, for Cambridge, Mass.-based Harmonix Music Systems Inc., which makes music-based video games.
- Viacom will have spent at least $577 million on video game acquisitions this year with the Harmonix deal, Reuters points out, including a $102 million buy for Xfire Inc. in May and a $200 million play for Atom Entertainment Inc., whose casual games, short films and video sites include Shockwave.com, AddictingGames.com, AtomFilms.com and AddictingClips.com., in August.
In another move to tap its target market--which today is lookin' a little less MTV-gen and a little more YouTube-gen than those that had previously flocked in droves--MTV Networks said its mtvU business would acquire Y2M: Youth Media & Marketing Networks for undisclosed terms, in a move to bolster its collegiate presence.
Other measures to innovate in well-populated markets include:
- Acquiring female teen Web site Quizilla.com from Gorilla Nation Media LLC in October for undisclosed terms.
- Plans announced in July for social networking site Flux, recently launched.
- Social networking platforms dramatically blurring the already fuzzy lines between reality, the Web and television, anchored by the September release of its "Virtual Laguna Beach," which, according to a statement, lets users "'live' for themselves -- the content they see on-air."
- In December 2005, MTV announced a partnership with Microsoft Corp. to develop a digital music service.
MEANWHILE, BACK AT THE BATCAVE
Viacom has seen a wealth of changes of late. Monday, Sept. 25, the company announced revisiting executive chairman Sumner Redstone's compensation package, trimming salary and bonuses come the turn of 2007 and "immediately directly links the majority of Mr. Redstone's compensation to superior shareholder returns," a statement said, nearly three weeks after Philippe Dauman was tapped for the president and chief executive chair to succeed Tom Freston.
- A Dow Jones Report Tuesday, Sept. 26 suggests Dauman's most daunting task may just be pinning down Viacom's strategy for the oh-so-real, online world.
| Dealwatch executive summary |
The Date |
The Action |
| 10.16.06 |
MTV snags Quizilla.com |
| 9.25.06 |
Viacom rethinks Sumner Redstone's compensation package. |
| 9.05.06 |
Philippe Dauman to take the chief executive reigns at Viacom. |
| 9.22.06 |
MTV Networks is hip to Harmonix's tune. |
| 9.22.06 |
Harmonix buy puts Viacom's video game investment for 2006 at more than $577M. |
| 9.20.06 |
MTV's new social networking platform dramatically blurs the lines between reality, Web and online. |
| 8.03.06 |
MTV goes back to college with a buy for Y2M: Youth Media and Marketing Networks. |
| 5.09.06 |
MTV announces closing its $102 million Xfire acquisition. |
| 12.2005 |
MTV and Microsoft plan to join forces on a new digital music service. |
Source: The Deal |
