news 14 discop link 0 www.discop.com june 2005
egion THE CEE IS OF GROWING IMPORTANCE TO WESTERN CABSAT OPERATORS by Bob Jenkins Joel Krutz, Head of Finance and Operations, Emerging Markets at US giant MTV is categoric. “We will,” he insists, “over the coming years make a substantial investment of both time and money in the region.” Explaining the thinking behind this strategy, Krutz continues, “the CEE is a very important part of our overall international strategy because it offers so much potential for growth when compared to the West.” The view that the CEE offers great potential for Western cabsat operators is shared by Katarzyna Kieil, Vice President, CEE, Discovery Networks Europe, who describes the region as being, “extremely important,” to Discovery’s international strategy. Kieil is keen to emphasise that Discovery recently opened a Warsaw office with a staff of twenty, to service their operations in the region, and that, “as our business grows in the future, we will explore opening new offices in those markets where we see the potential for growth, so as to reach closer to our platform operators and also to create localised services which have a real resonance for viewers.” Although Kieil insists, “we never disclose internal forecasts”, she remains confident that, “there is significant growth potential in the region.” Wayne Durford, Director of Chan - nels at BBC Worldwide, is reluctant to give hard estimates for growth. The BBC only operates one channel in the region, its advertising free, general entertainment channel Prime, and, says Durford, “the future of Prime in the region is very difficult to predict,” but he does suggest that, “Poland must have plateaued,” although he does see potential in Hungary and the Czech Republic, “which,” according to Durford, “are countries where we still have a lot more work to do.” But, by way of underlining the significance of the CEE to Prime, which Durford describes as “extremely important to Prime’s overall business strategy,” he reveals that, “currently, we have 22 million subscribers throughout EMEA and of these, 3.5 million are in the CEE.” More forthcoming is Zone Vision’s Commercial Sales Director, CEE, Mark Young. Young claims that, “we have teams in each of the territories who are very close to the action, enabling us to be accurate in our forecasting,” and he goes on to reveal that these forecasts predict annual growth of, “between 15% - 40% over the coming twelve months, depending on the territory.” Another who views the CEE as primed for growth is Bruce Tuchman, Executive Vice-President, MGM Net - works; although there are some unusual features of the MGM offering when compared with operations such as MTV, Discovery, and BBC Prime. To begin with, MGM Channels are based exclusively on the library of 4,000 plus titles and offer no new production. Also, as Tuchman explains, in relation to the CEE specifically, there are a number of other distinctions. “Firstly,” he points out, “under communism Hollywood was very much the enemy, and therefore very few of our films have been seen in the CEE. This,” he continues, “is both a positive and a negative. On the positive side, it means that there is a greater demand for our movies which are new and exciting to audiences in the area. However, this also means that frequently we don’t have local language versions for enough of the movies to sustain an operation.” Even so, MGM has taken the first tentative steps in the region launching a year ago on MTV+ in Russia, and more recently on Liberty Global in Warsaw, which Tuchman describes as, “testing Poland”. For Discovery’s Kieil the process of identifying a new market, or the potential to launch a new service in a market in which the factual behemoth already has a presence begins with, “closely following consumer trends, as well as working with our platform operators to assess which services will have local appeal.” This process, she suggests, would run alongside, “a number of focus groups to gauge viewers’ response to a new product offering.” Additionally, Discovery would, “assess the potential for delivering ad sales, and, crucially, the talent to be found within the independent production community.” MTV’s Krutz says the process of establishing a new service in a territory, “usually begins with us receiving a proposition from a potential partner.” Once this has happened, Krutz details a number of assessments that the Viacom-owned giant would make. “Firstly,” he reveals, “we would assess the local economy, and, should this seem promising, we would look at the TV market within that economy with a view to establishing whether it is mature, or whether it is a market offering potential for growth.” But Krutz insists, “the major factor is always the partner. We need to be certain that the potential partner has the right business plan and background, and, most importantly, that they have the right hopes and ambitions for the MTV brand. After all, we have spent twenty-five years building the brand, and we are not about to carelessly give it away.” Growth is the key fact BBC Worldwide’s Durford says that they are looking at when assessing a potential new market for BBC Prime. Whatever assessments Western cabsat companies have to make, two things can be said with certainty: they’re in the CEE to stay, and they’re in the CEE to grow. } discop link 03 www.discop.com march 2006 11
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