Can Viacom create long-term value?

Dauman and executive chairman Sumner Redstone love the value of Viacom's content. They believe that programming found on Nickelodeon and movies from Paramount will deliver a lot of cash flow over time. And they apparently believe that the market is agreeing with them.

I've got to say that, as far as the stock performance goes, I'm not so sure that it's as simple as the market showing its approval for Viacom's long-term strategies. The current euphoria is probably based on the premise that things got so out of whack in such a relatively short period of time once the terror of the Great Recession took hold.

From what I can tell, Viacom doesn't really get it when it comes to the most important thing about content production. In fact, every content producer needs to take heed of this tenet: aggressively reduce cost of production. That's what's truly hampering media companies and their lagging long-term performance, in my opinion.

Whenever I read a recap of a shareholder meeting at a Viacom or a Disney, I never hear a serious discussion about this topic. And the news media doesn't cover it that much, either. You hear about egregious CEO pay (as you should). But you never hear about egregious production costs.

Redstone and Dauman can talk about the value of Viacom's content all they want. Yes, there is value to iCarly and Star Trek. But to generate returns on investment that will propel the stock higher long after this possible bear-market bounce is in the history books, fundamental changes to cost structures and budgets for content generation will be necessary. So far, I've heard no sound plan on that subject...

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