Viacom Sees MTV As Key To International Strategy

By | June 11, 2001 at 12:00 AM

Media titan Viacom Inc. plans to use its MTV Networks unit as the foundation of its global strategy, with focus on emerging markets in China, India and Brazil, its chief executive Sumner Redstone said on Sunday.

MTV, which reaches 340 million homes worldwide, is growing quickly in Asia, reaching nearly 130 million homes. “This is a region that has over 3 billion people, which should give you an idea about the potential for us,” Redstone said.

The U.S. spends about 0.6 percent of its gross domestic product on television advertising, compared with 0.2 percent in China, where MTV reaches 54 million homes, Redstone told attendees of the Multichannel News International Summit.

“As the gap narrows, we stand to reap enormous benefits,” he said. “Indeed, China is projected to become the world’s fourth largest advertising market by 2010.”

He noted that India spends even less on advertising, creating growth opportunities as marketing becomes more sophisticated.

In Latin America, MTV will continue to focus on Brazil, which is expected to grow from the 12th largest advertising market to the third largest by 2010.

Another key element of MTV’s international strategy is the focus on local programming, with 60 to 70 percent of the programming on each of MTV’s international channels produced in its respective market.

MTV, which recently bought The Music Factory, its rival channel in Belgium, the Netherlands and Luxembourg, is “on the prowl” for more acquisitions in large markets without widespread access to cable, Redstone said.

The company also plans to spread its influence beyond television to other media such as the Internet and mobile phones, particularly in Europe and Japan, where text messaging via phones is popular.

In the U.K., MTV introduced the show “Videoclash,” in which the video playlist is determined by text messages sent from mobile phones or MTV’s U.K. Web site. Redstone said MTV is considering a launch of an American version of the show.

Noting that high speed Internet access is becoming available at a faster pace in Europe than in the U.S., the company is preparing to introduce “MTV Live,” which will provide live Webcasts of concerts, music news and other features aimed at high-speed users.

The service is expected to be launched in July in France, the Netherlands and the Nordic region.

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