The Healthy Side of the Media Business

Yesterday, we learned that Take Two's (TTWO) Grand Theft Auto IV sold a record 609,000 copies, generating more $48.4 million, in one day - and that was just in the UK.

Today, it's Viacom's turn:

Entertainment company Viacom Inc. (VIA) reported a 33 percent rise in first-quarter earnings Friday, lifted by stronger sales of the ''Rock Band'' video game...

Revenues rose 15 percent to $3.12 billion from $2.72 billion.

Higher sales of ''Rock Band'' and a 22 percent gain in home video revenues outweighed a 7 percent decline at the box office. Advertising revenues rose 8 percent on gains at the cable networks Nickelodeon, Comedy Central and TV Land.

All of this is good news not only for the videogame industry and for the media industry more generally, but even for beleaguered parts of it like the music industry, which provides the necessary soundtrack to all that other media. And that's not where the synergies end, by any means. Look for instance at Viacom's South Park franchise:

In its 12th season, South Park is a multi-platform juggernaut for Comedy Central. South Park digital: the show is MTV's best selling franchise on iTunes and Xbox, with 7 million copies downloaded.

Ten years ago, the stock market technology bubble was responsible for all manner of euphoria about the future of media. (And I do think that's the way the causality flowed, rather than the other way around.) The difference now is that prices are much more realistic, even as real-money profits have finally started appearing on the bottom line of balance sheets.

The interesting twist, which people might not have expected ten years ago? The big media companies, with their unique ability to generate hits, are still in the driver's seat. And when an independent company does manage to build a blockbuster franchise? You know it's bound to be taken over sooner or later.

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