Trevor Noah Is Winning Millennials Even as Viacom Struggles to Win Ad Dollars
Taking over for Jon Stewart was never going to be easy, but Trevor Noah, the new host of Comedy Central's The Daily Show, is having success attracting younger viewers, the demographic most sought-after by marketers.
But translating more millennial viewers into higher advertising sales is proving more difficult. And advertising dollars are what Comedy Central's parent company Viacom (VIAB) - Get Report really needs.
The New York-based media company, which reports its quarterly earnings on Thursday, has seen its stock plummet 36% in 2015 amid investors fears that its largest networks -- MTV and Nickelodeon -- are vulnerable to declines in pay TV viewers and the migration of marketing dollars to online platforms. Viacom's ad revenue dropped 9% in the second quarter, its fourth straight quarterly decline, as total revenue declined by 11%.
Noah, a South African-born comedian, has been thrust into the challenging position of not only following Stewart but of trying to stanch slumping ad sales at Comedy Central.
According to Standard Media Index, a tracker of media industry ad sales, ad sales at the network in the third quarter fell in comparison to the same period a year earlier. Pre-ad sales for the period, known as upfronts, may have suffered as marketers held back on buying time linked to Noah's show until after its Sept. 28 debut, at the very tail end of the quarter.
October ad sales data from SMI will be released on Nov. 15.
Regardless of how Noah does, it's been a tough two years for the Comedy Channel. Stewart followed another former Daily Show personality, John Oliver, to Time Warner's (TWX) HBO, signing a production deal with the premium cable channel earlier this month. Stephen Colbert went to CBS (CBS) - Get Report last year to replace David Letterman, opening a spot for Nightly Show host Larry Wilmore, who has earned critical praise and a loyal following.
The current quarter is likely to give Viacom a better picture of Noah's ability to generate advertising sales that meet or even exceed those from Stewart's final years as a Comedy Central anchor.
A Daily Show spokesman wasn't immediately available for comment.
While Noah's first month as host of The Daily Show has been well received, Noah suffered a significant health scare when he underwent an emergency appendectomy earlier this month. The intestinal trouble, though, forced him to experience a U.S. hospital -- which he compared to being at a MASH unit during wartime, thereby generating fresh new comedic material.
As Noah seeks to better establish himself as a talk-show host, investors are seeking clarity on the future leadership of Viacom, the television and film company controlled by 92-year-old billionaire Sumner Redstone. The lack of a public succession plan for Redstone has put more pressure on Dauman to bolster revenues at a time when he's been criticized for spending billions on share buybacks rather than on retaining talent like Stewart and Oliver, or acquiring a content company such as AMC Networks (AMCX) - Get Report .
Even as Viacom has stumbled, Dauman's compensation has soared, climbing 19% last year to $44.3 million. Despite the company's troubles, Dauman continues to have the support of Redstone, who controls nearly 80% of the company's voting power.
To bolster revenue, Viacom recently launched an Internet subscription offering for its BET network with the online platform Afrostream, and the company announced on Nov. 2 that it would partner with TiVo research.
The TiVo partnership gives Viacom access to the viewing data and information of that company's subscribers. That additional perspective could help Viacom distribute ads tailored for niche audiences -- first-time car buyers or expecting mothers, for example -- and help the company gather an ever-increasing amount of data to target groups of consumers. Dauman is betting the added emphasis on big data will in time increase company revenues, which can be then sunk back into content creation.
With Noah as host, The Daily Show has expanded its reach into digital space to connect with younger viewers across other platforms, on Instgram and Twitter.
Since Noah has done well leaving audiences laughing, the gathering clouds that could mean more stormy forecasts for Viacom and its collection of networks in missed revenue targets, lagging ad sales and discontent over its CEO's leadership strategy may prove to be only a temporary setback.
In content creation it's all about the talent. And while Noah is no Stewart, at least not yet, Comedy Central may have scored with its new host for The Daily Show.