Viacom Says the Internet Made Its Reruns Less Valuable

Sorry, Snooki. You’re not worth as much as you used to be.

Blame Amazon, YouTube and the rest of the Internet.

That’s part of the message Viacom sent out today, when it announced it was taking a $750 million restructuring charge as part of a “strategic realignment,” which includes firing a lot of people.

The cable TV conglomerate had already been struggling with weaker ratings, and CEO Philippe Dauman had previously announced that layoffs were coming, so the news wasn’t a complete surprise.

But the scope of the overhaul, for a company that seemed on top of the world just a few years ago, is news. So is the company’s acknowledgement that some of the shows it makes and buys aren’t as valuable as they used to be, because people don’t watch TV the same way anymore.

Specifically: They’re a lot less likely to watch old reality shows, because technology gives them so many more options.

Here’s the language from Viacom’s press release: “The charge also reflects accelerated amortization of programming expenses associated with a change in the company’s ultimate revenue projections for certain original programming genres that have been impacted by changing media consumption habits.” (Emphasis added.)

And now the translation, with help from a person familiar with Viacom’s thinking: The shelf life for Viacom’s reality shows like “Teen Mom” and “Jersey Shore” is shorter than it used to be, because why watch a reality show rerun when you can watch something on YouTube or Twitch, or play around with Vine and Snapchat, or Clash of Clans or whatever. So the company has to knock down the value it had attributed to those shows in its catalog. The same goes for some reruns the company had purchased from other providers.

If you want to add insult to injury, you can say that Viacom helped hasten this problem by making its own repeats available lots of places besides Viacom’s own channels. Amazon Prime members, for instance, can stream “Jersey Shore” and many of Viacom’s other old shows for free.

That’s the argument Bernstein Research’s Todd Juenger has been making for months — not just about Viacom, but the rest of the cable TV guys, who saw ratings fall off a cliff last summer. Now other industry observers, including those at Nielsen, are coming around to his view.

Viacom’s defense, if it could make one out loud, is that it thinks this viewing shift is only affecting a tranche of its programming, not all of it. Viacom might also note that it did get paid for all of those licensing deals, and since its competitors made the same ones, the cost of not doing them might have been even more expensive.

Next question: Is Viacom going to discover more of its programming has been affected by “changing media consumption habits”? Even more important question: Will the rest of the TV networks make the same discovery?

This article originally appeared on Recode.net.

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