p. 2 MTV Networks Africa A Case Study in Alternative Content Acquisition 1 st African Broadcast & Film Africa Conference 24 September 2008

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MTV Networks Africa

A Case Study in Alternative Content Acquisition

1st African Broadcast & Film Africa Conference

24 September 2008

Agenda

Introduction to MTV Networks Africa

Our brands

Our content proposition

Our multi-pronged approach to distribution across Africa

• Program sales

• Terrestrial block

• 24-hour channels

• Off-air channels

Challenges

Conclusion

The beginnings of MTV Networks Africa

MTV as a global brand and institution• Recognized around the world as the foremost provider of music programming and entertainment

• More than 20 years of experience and knowledge about what makes young people tick

The idea of an MTV Networks Africa was conceived in 2004• To win over skeptics, we needed to develop a business case for Africa

– Brand: Needed to introduce and translate our global brand for an entirely new market– Content: Needed to develop content that catered to tastes and attitudes of local audiences

Distribution: Get our content out to as many people as possible in as many ways as possible

MTVNA launched in Africa in 2005 to huge success, far exceeding expectations• Now reaching >50M viewers and carried by all the major Pay TV operators and the largest terrestrials

• Brand strength evident in all markets– In South Africa, MTV and MTV base are voted the #1 and #2 music channels for 3 years running

• 2008 marked a year of milestones, paving the way forward for greater growth and experimentation– Host of the first-ever MTV Africa Music Awards, sponsored by Zain– Launch of Nickelodeon brand– Experimentation with incorporating and moving content onto digital platforms

Going forward, our plan for growth focuses on further expanding our footprint and brand awareness in Africa

MTVNA engages with its viewers on several levels

Aspirational

Emotional

& Mental

Physical

BRAND

CONTENT

DELIVERY

Brands that young Africansaspire and relate to

Compelling content that is locally relevant

On every platform 360° - TV, on-the-ground events,radio, mobile and online

MTV’s deep relationship with young people driven by a strong understanding of their aspirations, the content that excites them, and their preferences for media consumption

BRAND

CONTENT

DELIVERY

Aspirational

Emotional& Mental

Physical

Our discussion today

The opportunities and challenges we have in engaging with our African viewership while utilizing alternative content development and acquisition methods

Image sources: http://o.aolcdn.com/art/ch_travel/africa, www.our-picks.com, www.mrgadget.com.au, www.electricpig.co.uk, www.techpartz.com

http://o.aolcdn.com/art/ch_travel/africa

http://o.aolcdn.com/art/ch_travel/africa

http://www.our-picks.com/

http://www.mrgadget.com.au/

http://www.electricpig.co.uk/

http://www.techpartz.com/

Agenda


Our brands



• Program sales




Challenges

Conclusion

Our brands

The power behind evoking the aspirations of viewers and audience is evident in the strength of our brands across the world

Brand

MTV is the iconic global brand at the intersection of music, creativity and youth culture, giving each new generation a fresh creative voice that entertains, informs and unites

MTV base stands for cutting-edge urban music entertainment with a local flavor for dedicated music fans of R&B, hip hop and rock

VH1 is where mature music lovers go for their music, pop culture and entertainment

Nick is the hugely successful brand that puts “kids first”, connecting kids with each other and providing them premium kid-centric educational and entertainment content

All four MTVNA brands share a common mission to build up

capacity and talent in the African entertainment industry

Agenda


Our brands



• Program sales




Challenges

Conclusion


MTVNA benefits from having both credibility derived from world-class international content and local relevance from selective local content partnerships

Examples

• Pimp My Ride• Cribs• The Hills• Made• Total Request Live• My Super Sweet 16

The challenge is always to leverage our proven international

content and concepts while catering to local tastes

• Dismissed• Making the Band• Video Music Awards• Europe Music

Awards• Music videos and

music programming

Proven international content

Approach

A. Select shows with local appeal

B. Package with localized on-air look and feel

C. Promote with local VJ personalities

• MTV Africa Music Awards with Zain• Making the Video with Shell• Club MTV Angola with LG• TRL Radio with KFC and 5fm• Advance Warning with Zain• Player with Sony Ericsson• Be True with Nike• E. Africa VJ search with Coca-Cola• Nigeria VJ search with MTN

A. Hand-pick locally compelling content ideas

B. Partner with local players of a like mindset

C. Create / launch new programming

D. Promote with 360 exposure and on-the-ground events

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Select localized content

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Local commercial partnerships

To further build its local relevance, MTVNA takes proven concepts from MTV Networks International and translates them for the local market with select commercial partners

Approach

• Initiation and briefing– Client may approach MTV with a particular occasion or intent (e.g., launch, branding,

anniversary, etc.)– MTVNA may approach potential partners with a compelling international property it plans to

localize

• Brainstorming– Ideas refined in internal inter-department meeting with production, digital media, marketing,

etc.

• Proposal– Based on brief and brainstorm, proposal generated meeting both parties’ goals

• Execution of all elements– On-air component– On-the-ground events– 360 advertising– Digital media elements and marketing

MTV adopts a heavily collaborative approach with all ourcommercial partners in order to deliver the best creative

solutions

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VJ Search with Fanta

Agenda


Our brands



• Program sales




Challenges

Conclusion

Our distribution across Africa

Given the dynamics of the African market, it is important for MTVNA to distribute its content across as many platforms and through as many channels as possible

• Sell high-performing programs to local channels

• E.g., Pimp My Ride with SABC

Programsales

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Distribution

Market overview1

Overall market:• Slow but steady liberalization of the broadcast sector since the 1990s• Youngest population in the world with an average age of 18.2 years vs. 25.9 in Asia, 24.5 in

Latin America and 24.1 for the developing world as a whole

Advertising spend• Ad spend in Africa estimated to be $4.9B, with 69% in South Africa alone and nearly 90%

concentrated in the top 10 markets• Strong growth in ad spend

– From 2002-2006, South Africa experienced annual growth of 17-20% in ad spend– 45% YoY increase in Kenyan ad spend in 2006

• TV share of ad spend ranging 20-40% in key markets: 16% in Uganda vs. 40% in SA and Nigeria vs. >50% in Ghana

Television• Nearly 50% of sub-Saharan countries have licensed free-to-air TV channels• Pay-TV dominated in Anglophone markets by DStv, GTV and Hi TV in Nigeria• TV ownership projected to grow 17% from 46M in 2007 to 54M in 2010, with penetration

<10% in most African countries (though 12% in Nigeria and 17% in SA)

Multi-pronged distribution strategy

Source: Balancing Act, African Broadcast and Film Markets (2008)

• Partner with terrestrial players for specific time slots

• Provide and tailor programming to that time slot

• E.g., AIT, TV3, NTV, WBC, TBC

Terrestrial

blocks

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• Partner to air content 24 hours/day

• To date, have only partnered with pay TV players

• E.g., DStv, GTV, Hi TV

• Partner for innovative delivery via radio shows, live events, online and mobile solutions

• E.g., TRL Radio, Club MTV

Off-air channels

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24-hour channels

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Distribution: Our reach

Source: Commercial distribution reports; Map from http://policyafrica.org/africa-map.gif

MTVNA programming reaches >90M viewers in 21.5M households in 48 countries across Africa while commercial activity concentrated in 6 markets

Key commercial marketsTerritory Partner Platform Hrs/week

Reach(M HHs)

Reach(M viewers)

MTV base total 21.49 94.67

Pan-Africa1DStv Pay-TV 24-hr daily 2.14 8.39

Pan-Africa1GTV Pay-TV 24-hr daily 0.06 0.29

Nigeria AIT Pay-TV 24-hr daily n/a n/a

Nigeria AIT Terrest 12 10.00 40.00

Nigeria STV Terrest 18 1.00 5.00

Ghana2TV3 Terrest 21 2.00 12.00

Kenya2NTV Terrest 34 4.00 16.00

Uganda WBS Terrest 14 2.00 10.00

Tanzania TBC1 Terrest 28 0.30 3.00

MTV total 1.63 6.42


VH1 total 1.38 5.41


Nickelodeon total 1.40 5.54


Pan-Africa1GTV Pay-TV 24-hr daily 0.03 0.17

Nigeria Hi TV Pay-TV 24-hr daily 0.00 0.00

MTV Portugal total 0.16 0.62

ANG & MOZ DStv Pay-TV 24-hr daily 0.16 0.62

1 Includes >40 African countries2 Terrestrial partners reach >90% of their country's TV viewership

http://policyafrica.org/africa-map.gif

Distribution: Program sales

MTV Networks’ programs represent the best of what’s out there in youth programming, but critical to understand what will play well in the local market

Overview

Approach• Program sales team receives interest from 3rd party broadcasters• Program team presents full suite of programs (from all MTV Networks

channels) that suit the broadcaster’s particular needs

Status• To date, >500 program sales deals conducted across the continent• Sample sales:

– South Park to MNet– iCarly to KTV– Pimp My Ride to SABC in South Africa

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Cribs

Distribution: Terrestrial blocks

MTVNA seeks to work with terrestrial partners who are able to both add and derive great value from partnership

Approach

• Identify the right partners, with shared goals, in order to create a win-win situation for all parties

– MTVNA provides: Compelling content Pan-African advertisers Brand association Marketing

– Terrestrial partner provides: Distribution platform Access to the mass market

• Understand partner’s needs and determine the right content

• Together with partner, go out and sell terrestrial block to advertisers

Case study: STV Nigeria block

Relationship initiated in 2005• Late-night (10:30-11:30PM) time slot not performing

well for STV and not attracting any ad spend• MTV began supplying content for the late-night slot

– MTV base chart and other music based shows• STV and MTV began a joint sales effort for the block

Outcome successful for both parties• Advertisers, especially beverage, responded very

positively to content• Partnership was even successfully in generating

advertising competition during what was previously a dead slot

Value generated for STV on both ends• Input: Higher-quality content than would have

otherwise been possible to produce in-house • Output: Higher ratings and greater advertising

revenue

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Distribution: 24-hour channels

Ability to deliver 24-hour channels is the mainstay underlying all our operations

To date, MTVNA has only partnered with pay TV providers to deliver our

24-hour channels

• DStv (4 channels, pan-Africa): MTV base, MTV, Nickelodeon, and VH1• GTV (2 channels, pan-Africa): MTV base, Nickelodeon• AIT (1 channel, Nigeria): MTV base• Hi TV (1 channel, Nigeria): Nickelodeon

Having built an established, pan-African distribution network, MTVNA is

now exploring partnerships to further localize our 24 hour channels

Terrestrials– An opportunity to tap new markets and bring high-quality music

entertainment to the masses Digital Terrestrial Television (DTT)

– Potential to further develop and associate the MTV brands with cutting-edge innovation and content delivery

TRL Radio

Distribution: Off-air channels

MTVNA lives up to is creative and innovative reputation not only in its content, but also in its delivery methods

Highlights

On-the-ground events• The MTV Africa Music Awards• Club MTV parties• VJ searches

Radio• TRL Radio – first-of-its-kind program to be adapted to both TV and radio

platforms

Online• MAMA My Video Award – a unique participatory experience for viewers to

show off their video-making skills and rub elbows with stars

Mobile• MXIT social networking community in SA – just launched in July and already

one of the fastest-growing, acquiring 50,000 members/month

TRL Radio

Agenda


Our brands



• Program sales




Challenges

Conclusion

Challenges

Selling and distributing in Africa faces challenges that are largely structural

Limited infrastructure and capacity High costs of delivery within Africa impact both production costs and timeline Imperfect payment systems result in difficulties collecting payments Limited high-quality production partners across Africa

Regulatory environment Compliance with local audience regulations difficult when you are in multiple

markets and constantly producing new content Piracy in many of our markets continues to pose a risk for our brands

Sponsored Production Focus on ratings and audience metrics, combined with lack of a reliable

ratings system, undervalues the power of our brands, which extend far beyond our traditional viewership

Agenda


Our brands



• Program sales




Challenges

Conclusion

The path forward

Strike a better balance between international and local content

Produce higher-quality local content that can travel so costs can be amortized

Develop partnerships geared towards delivering value to each party’s bottom line

Build an environment that provides programmers reassurance that their content will not be distorted or misused

Increase our technological bandwidth and find a way to make the cost of delivery cheaper – e.g., tapeless

Develop more expertise in content scheduling so that it can be monetized beyond the “Prime Time” sale

Be more collaborative and share best practices across the continent – we need to trust and support of each other especially as we are pursuing new and innovative initiatives

Based on our business as a case study, the African content business has a strong growth opportunity but the following things must happen:

Thank you

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Documents

p. 2 MTV Networks Africa A Case Study in Alternative Content Acquisition 1 st African Broadcast & Film Africa Conference 24 September 2008