Viacom’s Q3 revenue fell 4% to US$3.24 billion, despite a Paramount turnaround that drove higher Filmed Entertainment profitability and big gains in digital consumption.

The media giant’s operating income increased 1% to US$752 million, primarily driven by a US$35 million improvement to US$44 million in Filmed Entertainment operating income. The lift was the result of lower operating expenses and higher domestic revenues, which were driven by the strong box office performance of Paramount Pictures’ Q3 releases, and higher television production revenues.

Although Viacom’s domestic theatrical revenues grew 58%, mostly due to strong performances from adult-skewing films A Quiet Place and Book Club, global Filmed Entertainment revenues slipped 9% to US$772 million. And while the division’s overall domestic revenues grew 20% to US$464 million, the result was offset by a 33% drop in international revenues to US$308 million.

Looking ahead to 2019 and 2020, Viacom’s revitalization of Paramount Pictures will rely more heavily on upcoming kids and family films including next March’s Wonder Park (formerly Amusement Park) from Paramount Animation. Film adaptations of Nick series The Loud House and Henry Danger are also in the works, as is the third movie installment of SpongeBob SquarePants, which is being overseen by the studio’s newly-hired EVP, ex-DreamWorks producer Ramsey Naito.

In addition, Paramount Players is also developing a live-action/CGI-animated Rugrats movie slated to premiere on November 13, 2020. Based on Nick’s iconic TV property (pictured) from the ’90s, the movie marks the seventh film Paramount and Viacom Networks have partnered on and will be written by Family Guy‘s David Goodman.

On the digital front, Viacom’s new Digital Studios division saw its total video views and watch time increase 112% and 104% year-over-year, respectively, for the quarter. According to Viacom, Nick’s Noggin preschool app in particular has performed well on Amazon Prime Video Channels with strong subscriber growth since launching on the platform in May. Prior to its debut on Amazon Prime, Nick bolstered the app’s content portfolio with the addition of PAW Patrol seasons one and two, as well as a new science and reading hub featuring original short-form content to promote STEM fields and social-emotional skills.

Viacom’s digital growth follows its recent acquisition of Gen-Z-focused digital media company Awesomeness from NBCUniversal. The move is aimed to strengthen Viacom Digital Studios expanding portfolio, which includes a significant amount of kids programming. At Viacom’s first-ever Newfront presentation held in April, four digital originals were announced for Nickelodeon’s YouTube platform featuring popular stars such as JoJo Siwa (Lip Sync Battle Shorties) and Jace Norman (Henry Danger), as well as Super League Gaming eSports content and a series centered around Nick’s first multi-player virtual reality experience, SlimeZone.

As for Viacom’s Q3 television performance, the company’s flagship brands grew year-over-year audience share for the fifth consecutive quarter, with Viacom continuing to hold the top share of basic US cable viewing among the kids two-to-11 demographic. Nickelodeon’s newly-revived kids game show Double Dare was a big winner in the quarter averaging 1.4 million viewers for its premiere week, making it the most-watched series debut on kids’ TV so far in 2018, according to the company.

During Q3, Nickelodeon also delivered its first title under a multi-year deal with Netflix to produce and license its animated comedy series Pinky Malinky. The deal stems from Viacom’s new studio model of producing and licensing new eps of its own original content to third-party digital or linear platforms.

Finally, Viacom’s domestic ancillary revenues increased 31% to US$93 million in Q3, driven by revenues from live events and consumer products.