-By Mike Shields

Despite its recent stock sell-off and lowered advertising revenue expectations, Viacom president and CEO Philippe Dauman remains confident that his company is better situated than most to weather the ongoing economic downturn.
 
Speaking during a keynote interview on Oct. 15 at the Media & Money Conference in New York--which is being hosted by Dow Jones and The Nielsen company--Dauman pointed to Viacom's diverse revenue streams, which include networks like MTV and the movie studio Paramount, as well as its overall spending restraint as factors, which should protect the company during a prolonged consumer recession. "We've been very fiscally responsible," he said.
 
As for advertising, Dauman said that Viacom had entered this year expecting a slowdown, but has had to adjust expectations recently as economic conditions have deteriorated further. "You have to be prepared to adapt to changing circumstances," said Dauman, who reported that ad sales are now expected to decline by 2 percent globally and 3 percent domestically during third quarter. And while admitting to some ratings softness for MTV and BET, Dauman said that since only 30 percent of Viacom's revenue comes from advertising sales, the company should be able to withstand such softness better than its rivals.
 
"We feel we are very well positioned compared to [other] media companies," he said.
 
Dauman added that Viacom possesed a considerable amount of free cash flow, in part because its been conservative when it comes to acquistions (Dauman used the word "prudent" several times during the half hour interview). "I'm very pleased we didn't use alot of our capital to make one big splashy acquisition."
 
One midsized acquistion that has paid dividends is Harmonix, which brought Viacom the successful videogame franchise Rock Band. Daumon predicted that Rock Band would prove viable for "many years to come" and that plans are in the works to develop a version of the game aimed at kids in conjunction with Nickelodeon.