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MTV Networks: The Arabian Challenge

International Management Case Study
by

Megan Tierney

on 28 February 2011

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Transcript of MTV Networks: The Arabian Challenge

Case Summary MTV Networks was launched on August 1st by joint venture of Warner Amex Satellite Entertainment Company and American Express. 1981 1984 The company was renamed as MTV Networks. 1986 MTV was acquired by Viacom Inc. 1987 MTV launched its first overseas channel in Europe. 2007 MTV has more than 140 channels and 1.5 million viewers worldwide. 2006 MTV announced the launch of MTV Arabia and was looking for partners in the Middle East. 2007 On November 17th, MTV Networks launched MTV Arabia in partnership with Arabian Television Networks Problem Statement "The current problem for MTV is to transform their open western culture image into the local Arabic culture and eventually sustain itself against the local competitors." Company Analysis Strengths Leader in the music industry since its launch in 1981 and has a significant amount experience in the market. Quickly began expanding in the US by launching sister channels, such as VH-1. In the mid 1990's, MTV started expanding into global markets with incredible success. With the experience, MTV has the information, tactics, and capital to expand into new markets globally and locally. Viacom's broad outreach allows MTV acccess to invaluable resources within the entertainment industry. Weaknesses MTV has a controversal American image. MTV does not have total independence because they are owned by Viacom. Environment Analysis Opportunities MTV's expansion would open up an audience of over 190 million people. 65% of the people in the Arabian market are the target market of MTV. MTV has the opportunity to capitalize on over 37 million mobile subscribers. Will give them the opportunity to change their controversal image. Threats The arabian market already has over 50 music channels. MTV has always been associated with western culture. Anti-American sentiments in the region could hamper the network's acceptance. Strategic Alternatives Instead of tackling the entire Middle East at once, MTV could slowly expand to ensure local culture accepts the brand and programming is appropriate to the region. MTV could decide to create a joint venture with one of the local Media Network rather than acquiring the company. MTV could use a licensing strategy in the Arabian area by allowing some of the 50 current music channels in the area to air some of the more appropriate MTV content, like shows and music videos. Selected Strategy MTV could use a licensing strategy in the Arabian area by allowing some of the 50 current music channels in the area to air some of the more appropriate MTV content, like shows and music videos. Implementation MTV would need to do some research on each of the different music channels in the Arabian market to see which one most closely represents who MTV is. This research also consists of target market, the types of shows they play, the genres of music, and the overall messages that the channel is trying to show to their target market MTV could then grant them the rights, for a specified period of time, to shows that are appropriate viewing for the Arabian target market. MTV would gain royalties for every time their show is played along with the initial fee that is charged to the channel that they are licensing their shows to. MTV can then go on to make their own station and can either cut the ties with their previous licensing agreement or they can license rerun episodes to them. Arabia Meg Tierney
Ellen Thompson
Ravi Amin
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