introduction dawn of an empire ipek hizlikan, elena ponomareva, sanjeev masih, james freckleton

IntroductionDawn of an Empire

Ipek Hizlikan, Elena Ponomareva, Sanjeev Masih, James Freckleton

“Ladies and gentlemen, rock and roll,”

The BirthLaunched on August 1st 1981First MTV Video: Video Killed the Radio StarEarly videos came mostly from British artists

Second Launch1983: Expanded into Manhattan and LA

Phase 3Viacom purchased MTV from Warner Amex

http://www.museum.tv/archives/etv/M/htmlM/musictelevis/musictelevis.htm http://www.youtube.com/watch?v=XWtHEmVjVw8

Decline and Restructure

DeclineViewership decline with lack of content

RestructureStarted offering Yo! MTV Raps, Club MTV, etc.Move from only music videos to full service programming1985: Launched VH1 for soft rock and adult viewers

http://www.museum.tv/archives/etv/M/htmlM/musictelevis/musictelevis.htm

Expansion

Competition at homeBET, CMT & TNN emerged as local competitors

“I Want My MTV”1987: MTV Europe is launched1991: Asian markets1993: MTV Latino

http://www.museum.tv/archives/etv/M/htmlM/musictelevis/musictelevis.htm

Early StrategyStandardization

“One Size Fits All”

Initially treated all markets like the US market

Standardization strategySame music videos were aired worldwideAmerican programming with English-speaking veejays

However, viewer’s tastes turned out to be local

Lack of local artist representation

Audience wanted programs in their native languages

One Size Does NOT Fit All!Lost advertising revenue

Some companies could not afford to advertize across Europe

Brands differed across nations

Others were only available in specific markets

Local copycat stations started springing up everywhere

New StrategyLocalization

Solution?

Europe

Asia USA

Think Globally, Act Locally!

MTV World today:

Same look and feel as MTV USA BUT majority of local programming and content

Benefits and Costs

Value creation strategyAttractive to more European/Asian local customersSignificant revenue increase

Inability to achieve Economies of Scale through standardization

Marketing Landscape

Hurdles

MTV was pressured for local responsiveness

Strong competition in local markets

VIVA in Germany; MCM in France

Localizing would reduce benefits from Economies of Scale

Strategy

MTV proceeded with a hybrid strategy

A heavy emphasis placed on localization

Goal was to distinguish itself from rivals through more relevant programming

Local versions of popular US programs produced

Local concepts were used (e.g. Erotica in Brazil)

A smaller emphasis on standardization

Basic business model was still applied abroad

Some US programs were still screened abroad

Initial Strategy

Predominately standardization

Final Strategy

Predominately localization

Outcome

Incr

ease

d V

alue

(V

)

Lower Cost (C)In

crea

sed

Val

ue (

V)

Lower Cost (C)

Outcome

Continuing standardization spelt doom

To adapt, MTV pursued a strategy based on localization

Retained some efficiency in doing so

Scale economies: satellite beaming multiple channels

Learning effects: deeper market understanding

Location economies: look-and-feel of channel developed entirely within the US

Viewer Statistics

MTV Networks’ brands are seen globally by 560 million households in 162 countries

33 languages are represented across the 150 locally operated TV channels

The MTV channel itself reaches 387 million households worldwide

• It is the #1 media brand in the world

What does the future hold?