ReadSpeaker and MTV France

1. ReadSpeaker and MTV France Best in France Case Study January 10, 2005 Team ES2 – C: Amlan Saha, Pierre Bonnet, Robert Shan, and Spencer Altman

2. ReadSpeaker Swedish Company Web-based Technology Why come to France? France 2nd Largest Country in Europe New legislation in France made product a necessity Do company values fit the French culture? Without legislation, cultural attitudes towards product would be significant problem MTV France American Company managed from London Television and Entertainment Why come to France? € 5 Billion advertising Do company values fit the French culture? No! Company Introductions

3. ReadSpeaker Constraints Tax Level Social Security Cost Work Protection Policies Product Adaptation to France Required French Version of Software Product Required French Sales & Marketing Representative Essential Advice Outsourcing is Essential for small start-ups in France MTV France Constraints Tax Level Social Security Cost Work Protection Policies 35 Hour Work Week Non-French Brand Identity Product Adaptation to France French Production of Programming vs. Importing American Production If American: Dubbed-French vs. Subtitled? Different Viewing Habits of Audience Essential Advice Do not underestimate cultural differences across functions: product, marketing, and HR Company Introductions

4. ReadSpeaker Market Basics • Entered France in 2004 • Translation Software which transforms the text on web-pages into audio • New Legislation in 2004 makes it mandatory for all public websites to be handicapped-friendly • Users of this legislation are the visually-impaired, senior citizens, illiterate, dyslexic and other learning disabilities • Forecast • Target all 8,000 Web-Sites of public and governmental organisations in France by 2007 • Target eLearning Web-providers

5. MTV Market Basics • Entered the French market in 2000 • Music Television • Non consolidated Forecast • Target sales 2004 : 3.4M€ • Target distribution revenue 2004 : 4 M€ • Distribution about 5 Million households • 45 employees

6. Company products MTV • Localized content (Short programs, commercials spots, on air marketing, and some live interactive show) are produced in France • Produced in France in order to be close to the source of content such as record labels • A maximum level of local production is reached ReadSpeaker • What products are produced in France? • Everything is developed & produced in Sweden. Only sales & marketing offices in France. • Sales & marketing regionalised

7. Company's clients MTV • The company's clients are • Communication agencies • Record Labels • Brands • The clients expect good ratings & quality audience. • Limited cable & satellite distribution network in France.Limited network penetration compared to UK, Germany and Italy ReadSpeaker • The company's clients are • Public organizations (government, town councils, prefectures, local administration agencies) • eLearning web-centres • The clients expect a better & more natural result than the solution offered by Microsoft.

8. Why it went to France ReadSpeaker • Go where the legislation is favorable to the software product • UK, Germany, Italy are also being considered. • France has huge growth potential + the service is obligatory for public organizations. MTV • “MTV should be in every household on the planet”. Today: 384 million households around the globe in 140 countries via 31 localized TV channels and 17 Web sites.

9. Company values MTV • Music, being international, and innovation are the core values of the company • Being international is perceived as being American in France: it does not fit with company values? • The company does not know how to manage its values in all the countries, • Values topic is a huge internal debate every year. ReadSpeaker • The local office is a sales & marketing unit only. • The values of the company remain in Sweden in the corporate office. • Swedish people are more conscious about handicapped issues than the French.

10. Constraints in France MTV • Arriving in France perceived as dangerous. Partners tend to protect themselves by collaborating with other companies. • Discovered the importance of cultural differences. • Worst constraint is the cultural battle between US and France. • Watching American content is natural in the UK or Scandinavia, but not in France • Achieved only 5% of planned partnerships in first year, 10% in the second year • Had to review objectives. ReadSpeaker • Worst constraints are tax, rigid labour laws that protect employee insterests and administrative red-tape. • In the UK, Social security taxes are only 15% • Local subsidiary is outsourcing to avoid the risk of recruitment error.

11. Adaptation to France MTV • French HR dept • French Legal dept • 35 Hours work week • Employee representative elections • Local production unit • Local office • New Legal Training policy ReadSpeaker • No

12. Key Constraint Costs MTV • Key costs come from local marketing • Version adaptation and production cost of dubbing or sub-titling. • Retrenchment benefits are prohibitively high. • Training is compulsory. • Social Security tax ReadSpeaker • Key costs are taxes

13. Key Benefit Numbers MTV • Big Market, 5B€ • “Television sans frontiere” allows MTV to avoid the 40% quotas of French content on the channel. ReadSpeaker • Quality of the workforce. • France & Paris are good for attracting top managers due to cultural reasons. • Product quality • Good logistics & infrastructure in France • Good health care system funded by the state through taxes • Big market • High growth potential

14. Essential Advice MTV • Do not underestimate the power of cultural differences in determining your product and even HR policies ReadSpeaker • Outsource to launch a start up in France, don’t employ due to risks and costs associated with hiring and firing workers.

15. We Thank Roy Lindemann Partner ReadSpeaker Former Vice President, General Manager of MTV France

16. Our Team ES2-C Amlan Saha Pierre Bonnet Robert Shan Spencer Altman