Presumably, there are many investors out there who believe that Viacom is better positioned than some other media companies. But when I look at the significant declines in operating income at both cable networks and filmed entertainment, I have to scratch my head. Viacom clearly has a long way to go in terms of adjusting costs and expenses. Management did repurchase over 8 million shares in Q4, something that does impress me, considering that so many companies are becoming very conservative when it comes to allocating cash for buybacks. I'll give the company credit for standing by its shares.

However, it doesn't impress me enough to want to own Viacom shares at this moment. Viacom has a lot of decent brands, but it needs to step up and get more competitive with its media brethren. For instance, better leverage of the Nickelodeon cable channel could help the business foster new franchises in similar fashion to Disney's exploitation of the Disney Channel model. Viacom has made a good effort in this regard (see iCarly), but clearly more needs to be done.

It's too bad the company's operations can't be as successful as its Rock Band video game. Distributed by Electronic Arts (NASDAQ: ERTS), Rock Band was cited as a sales-driver for media networks. For now, I think Viacom is going to have issues with reducing inefficiencies and fighting the advertising recession. Add to that a tough DVD market, and you may see why I'm not in a rush to buy a stock that was up on declining earnings.

Disclosure: I own Disney, GE; positions can change without notice.