Page 143 - DMGT514_MANAGEMENT_CONTROL_SYSTEMS

Management Control Systems

Notes
the need to keep MTV away from the pressures of the large, global corporation: MTV’s
European headquarters co-ordinates individual country strategies but allows considerable
flexibility within the overall station’s vision and purpose.

Growth Strategy
As the US has seen the launch of more TV stations and advertising begin to slow, MTV has
been seeking growth from its international interests. By 2005, MTV International accounted
for 80% of viewers but only 15% of revenues. But international activity was the future,
with the company launching services to high-growth markets like India and China. In
2005, MTV launched its first African channel, MTV Base. The main task of Bill Roedy,
president of MTV International, was to turn the high growth into a profitable business.
“Africa we expect to be a big contributor. People look at Africa and see problems, but we
also have to look at the positives. Its GDP growth is the second highest in the world
behind growth in East Asia.” China and India also represented major opportunities. “The
epicenter is shifting to the Far East and India,” commented Roedy. “They are amazing
markets but it’s important not to get too euphoric about the numbers.”
Competition
Music downloading over the internet was becoming a major threat: Apple had led the way
with its legal music site to millions of customers. In addition, the technology of broadband
telecommunications would extend downloading to videos and mobile phones. MTV
therefore needed to offer more than just music videos. In addition, it needed to take into
account new ways of delivering its product. Japanese customers already accessed MTV
more frequently by mobile telephone than by TV channel. Equally, in Korea, most homes
had broadband and could download videos quickly and legally.

As a result, MTV was continuing to change its programme content with non-music offerings
like Jackass and Dirty Sanchez and it was making all this available through the new media
channels. But it faced the problem that much of this material was mainly American in
humour and style. Its target audiences might be young and international, but they still
mainly listened to national and ethnic recording artists - hence the need for local material
alongside the global MTV brand name.
Questions

1. What are the benefits of operating a global media strategy and what are the
difficulties?
2. What are the market trends that will make it more difficult for MTV in the future?

3. Should MTV become more global with more programmes like Jackass, or more
local with little global content?

6.5 Summary

 Strategy formulation is the process of deciding on new strategies, whereas strategic planning
is the process of deciding how to implement the strategies.
 Top management is convinced that programming is important; otherwise, programming
is likely to be a staff exercise that has little impact on the actual decision making.
 Ideas for new programs can originate anywhere in the organisation with the chief executive,
with the headquarters planning staff or in the various parts of the operating organisation.

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