NEW YORK (TheStreet) -- As the media industry moves to consolidate through multi-billion dollar mergers, the pressures surrounding one of Viacom's (VIAB - Get Report) prime properties, MTV, forces the company to make some drastic changes.
With consumers streaming and demanding more content, companies like Netflix (NFLX) and Hulu that provide on-demand TV, are being aggressive in acquiring popular shows, ratcheting pressure on Viacom.
Now 33 years old, Viacom's MTV has continued to find ways to keep people watching. Although Viacom doesn't explicitly state how much revenue the channel generates for the company, Barclays Media Analyst Kannan Venkateshwar suggests MTV and Nickelodeon, two channels catering to the company's largest demographics -- ages 2 through 12 and 18 through 34, generate roughly 44% of the company's U.S. media network revenue and 27% of the company's overall revenue.
"MTV, they are working off a cache that has worked for them in the past and will most likely continue to work for them in the future," Roger Entner, founder of Recon Analytics, said in a phone interview. "They continue to look for content that will knowingly create drama, have that shock value and keep people coming back."
Viacom generated roughly $3.2 billion dollars during its second quarter ending on March 31, with $2.8 billion dollars in revenue from its Media Networks and the remaining $831 million courtesy of Viacom's filmed entertainment, including Paramount's The Wolf of Wall Street and Transformers: Age of Distinction. Advertising across all divisions generated $1.1 billion for the company.
From its pledge in 1981 to be the "world's first 24 hour stereo video channel" to shaping our definition of reality television with seasons of The Real World, Viacom's MTV has provided consumers with music videos and drama reality television for three decades.
The network has developed and tweaked a formula to keep it afloat while seemingly defying the odds of a dwindling music industry and the inevitable pitfall of its core youth demographic outgrowing its service.
"[MTV] is one of the core flagship companies that they have and it's disproportionately so. Sure, the music industry has big stars, publicity and things but the mobile industry is a $170 billion dollar industry and growing whereas the music industry is a $10 billion dollar industry and shrinking. Moreover, the impact that music has is very disproportionate to what it is actually worth," says Entner.