Viacom's first non-programming acquisition came in when the company purchased the Sonderling Broadcasting chain, giving it radio stations in New York City , Washington, D. The early s saw Viacom sorting through the Sonderling stations with several being donated, swapped, or being the nucleus for new corporations—for example, WOL in Washington launched the Radio One group, which today is the largest African-American -owned broadcasting corporation.
Louis ; with the purchase, that station's call letters were changed to KMOV. This led to Viacom becoming a mass media company rather than simply a distribution company. In , movie theater owner National Amusements bought controlling interest in Viacom, which brought Sumner Redstone to the company. The acquisition of Paramount Communications in July made Viacom one of the world's largest entertainment companies.
In , Viacom made its biggest acquisition to date by announcing plans to merge with its former parent CBS Corporation. Although a majority economic interest in Viacom was held by independent shareholders, the Redstone family maintained percent voting control of the company through National Amusements' holdings of Viacom's stock. In , Viacom bought independently run music channel TMF , which at the time was broadcasting in Belgium and the Netherlands.
The same month, plans were announced to dispose of Viacom's interest in Blockbuster later that year by means of an exchange offer. Also in , Viacom acquired the remaining shares of Infinity Broadcasting radio chain. From the mids until , Viacom operated several cable television systems generally located in the Dayton , San Francisco , and Seattle metropolitan areas.
This subsidiary was also credited as Viacom International, Inc. Popular pages. Recent blog posts Administrators Policies. Explore Wikis Community Central. By Viacom owned five television stations, 14 cable franchises, and nine radio stations. In , Viacom introduced a plan that halved the cost of Showtime, but forced cable operators to dramatically increase the number of subscriptions to it.
This strategy was designed to increase Showtime's market share at a time when many consumers were starting to feel that pay-TV channels were no longer worth their price.
Both channels provided comedy programs, but HA! Showtime had filed the lawsuit in , alleging that HBO was trying to put Showtime out of business by intimidating cable systems that carried Showtime and by trying to corner the market on Hollywood films to prevent competitors from airing them. The suit attracted wide attention and generated much negative publicity for the cable industry.
In August the suit was finally settled out of court, after having cost both sides tens of millions of dollars in legal fees. Furthermore, the two sides also agreed to a joint marketing campaign to revive the image of cable, which had suffered since deregulation. Also during this time, in a move that surprised many industry analysts, HBO and Viacom agreed to merge their struggling comedy networks, HA!
Overall, Viacom appeared to be thriving. Nickelodeon, meanwhile, was going to However, by the mids, Redstone was ready for a new challenge. The year-old media mogul found it by expanding Viacom into the motion picture and video rental markets.
The acquisition vastly expanded the company's presence in the entertainment business, giving it a motion picture library that included the classics The Ten Commandments and The Godfather and an entre into the premier movie market.
Later that same year, the company again expanded into a new segment of the entertainment industry by acquiring Blockbuster, the owner, operator, and franchiser of thousands of video and music stores. The Blockbuster group of subsidiaries was one of Viacom's most quickly growing enterprises; by , Blockbuster boasted 60 million cardholders worldwide and over 6, music and video stores. Viacom's acquisition of Paramount and Blockbuster gave the company thriving new enterprises, but left the company in significant debt.
To both relieve that debt and focus the company's energies, Viacom divested itself of several segments of its business. In , the company spun off its cable systems in a deal with TCI. The following year, Viacom left the radio broadcasting business by selling its ten radio stations to Evergreen Media Corporation. Although Viacom was no longer a cable service provider, and it had expanded into the motion picture and video rental market, its cable networks remained a significant portion of its business.
By June , Viacom had more than recovered from the hit it had taken from the Blockbuster purchase. A new strategy for Blockbuster drove up its sagging market share. Furthermore, Viacom had been on a global expansion drive, selling broadcast rights to Paramount's film library, for example. MTV was becoming an international brand as well. The heydays of network television were in the past. CBS's cash flow for the year would come from cable, radio, stations, and billboards. Cable ranked first among profitable segments of the entertainment business during the decade, with radio close behind.
CBS had made an early stab into cable in , but the effort tanked. Redstone had his eye on those channels and proposed an exchange of Viacom television stations for the country channels. But Karmazin convinced Redstone of the synergistic benefits of merging the two media giants and the deal was completed in May Redstone relinquished "effective operating control" of the merged company to Karmazin, according to the Wall Street Journal in Wall Street applauded the move, respectful of Karmazin's record in financial management and operational details as head of CBS.
But a few years down the road, it became less and less likely that Karmazin would succeed Redstone. Not only did the pair have an uneasy relationship, but Karmazin failed to meet earnings targets from to Moreover, Redstone wanted back some of the power he had relinquished.
Television, radio, and outdoor segments reported to Moonves and cable networks, entertainment, and video, to Freston.
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