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Introduction

Introduction

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Introduction

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  1. Introduction Dawn of an Empire Ipek Hizlikan, Elena Ponomareva, Sanjeev Masih, James Freckleton

  2. “Ladies and gentlemen, rock and roll,” • The Birth • Launched on August 1st 1981 • First MTV Video: Video Killed the Radio Star • Early videos came mostly from British artists • Second Launch • 1983: Expanded into Manhattan and LA • Phase 3 • Viacom purchased MTV from Warner Amex http://www.museum.tv/archives/etv/M/htmlM/musictelevis/musictelevis.htm http://www.youtube.com/watch?v=XWtHEmVjVw8

  3. Decline and Restructure • Decline • Viewership decline with lack of content • Restructure • Started offering Yo! MTV Raps, Club MTV, etc. • Move from only music videos to full service programming • 1985: Launched VH1 for soft rock and adult viewers http://www.museum.tv/archives/etv/M/htmlM/musictelevis/musictelevis.htm

  4. Expansion • Competition at home • BET, CMT & TNN emerged as local competitors • “I Want My MTV” • 1987: MTV Europe is launched • 1991: Asian markets • 1993: MTV Latino http://www.museum.tv/archives/etv/M/htmlM/musictelevis/musictelevis.htm

  5. Early Strategy Standardization

  6. “One Size Fits All” • Initially treated all markets like the US market • Standardization strategy • Same music videos were aired worldwide • American 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

  7. 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

  8. New Strategy Localization

  9. Solution? Europe AsiaUSA

  10. Think Globally, Act Locally! • MTV World today: • Same look and feel as MTV USA BUT majority of local programming and content

  11. Benefits and Costs • Value creation strategy • Attractive to more European/Asian local customers • Significant revenue increase • Inability to achieve Economies of Scale through standardization

  12. Marketing Landscape

  13. 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

  14. 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

  15. Outcome Initial Strategy Predominately standardization Final Strategy Predominately localization Increased Value (V) Increased Value (V) Lower Cost (C) Lower Cost (C)

  16. 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

  17. 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

  18. What does the future hold?