Michelle Clancy ©RapidTVNews | 07-08-2011

On the wings of blockbuster ad sales at its cable networks and lucrative distribution deals with Netflix and others, Viacom reported a 37% profit jump for the third quarter of 2011, despite taking a cost hit from Transformers: Dark Side of the Moon.

Viacom reported a profit of $574 million, up from $420 million YOY. Revenue leaped 15% to $3.77 billion.

The media giant's marquee nets, including MTV, VH1 and Comedy Central, saw US advertising that ticked upward 12% year-on-year within a rocky economic climate - with no end in sight. On the earnings call, Viacom CEO Philippe Dauman said that he expects double digit growth in ad revenue for the next quarter as well.

At MTV, the sought-after 13-to-34-year-old cohort grew 5.4% from a year earlier, according to Nielsen Co.

Meanwhile, streaming deals with Netflix and other Internet aggregators for library (older episode) content contributed at least 10% growth in US subscription-fee revenue from one year ago and 19% worldwide. Total subscription revenue grew by $156 million globally YOY.

It is expected that this part of the mix will grow: "There is a lot more room for incremental deals," Dauman said. "We are in a number of discussions right now."

The successes come in the face of a few negative spots. For one, box-office take is down overall at the Paramount film studio. Also, Viacom reported the marketing costs for the third Transformers installation in its Q3 earnings, but none of the box-office revenue, which will be covered in Q4.

Then there's DreamWorks: Viacom plans to end its existing distribution deal with the animation studio, in favour of starting its own arm to bring the production of such content in-house. It remains to be seen if the relationship will be severed completely; if so, it could have a significant impact on future quarters.

"The only issue is what DreamWorks Animation wants to do strategically as this deal expires, and how that fits in with our own strategic objectives," Dauman said.