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The Multi-channel Media House Model

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Anders Nilsson, Chief Operating Officer and Hein Espen Hattestad, CEO MTG Norway. Capital Markets Day 2010.

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The Multi-channel Media House Model

  1. 1. 2010 Capital Markets Day Anders Nilsson, Chief Operating Officer Hein Espen Hattestad, CEO MTG Norway The Multi-channel Media House Model Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 1
  2. 2. How we built the Media House in Scandinavia • Sweden • Norway • Denmark Analogue shutdown completed • Norway : Q4 2009 (Regional Shutdown) • Sweden : Q4 2007 (Regional Shutdown) • Denmark: Q4 2009 (National Shutdown) Level playing field Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 2
  3. 3. Successful triple play effect with huge potential Digitalisation of TV distribution Completed with resulting rise in penetration! Launch of secondary channels Completed with resulting rise in audience share! share! Complementary positioning of channel portfolio Implemented with resulting increase in reach! Bundled sales Implemented with resulting closing of price discount to incumbents & increase in market share! Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 3
  4. 4. Sweden – Impact of Introduction of the Media House TV3 Penetration Positioning 2006 Q1 2010 Commercial share of viewing (15-49) TV Advertising Market Share Index 44.6 41.5 112 36.1 31.6 107 100 2006 2009 2007 2008 2009 MTG TV4 MTG Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 4
  5. 5. Norway – Impact of Introduction of the Media House TV3 Penetration Positioning Age 2006 Q1 2010 Commercial share of viewing (15-49) TV Advertising Market Share Index 114 126 100 2007 2008 2009 Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 5
  6. 6. Denmark – Impact of Introduction of the Media House TV3 Penetration Positioning Age 2006 Q1 2010 Commercial share of viewing (15-49) TV Advertising Market Share Index 113 123 100 2007 2008 2009 Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 6
  7. 7. Huge Potential remains from Triple Play Model • Penetration – potential to raise levels for secondary channels • Audience Share – complementary positioning increases combined reach • Pricing – undeserved discount to incumbent consistently eroding = Monetization of rising Media House audience share clear from dramatic market outperformance Sweden 2009 Norway 2009 54.6 57.2 41.5 CSOV(15-49) CSOV (15-49) Share of Spending Share of Spending 49.9 T V 4 Gro up T V2 Gro up Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 7
  8. 8. Summary GDP Growth X Advertising Market Growth X+ TV Advertising Market Growth X ++ MTG Media House Growth X +++ Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 8
  9. 9. Building the Media House in Emerging Europe Scandinavian footprint Main competitor Estonia: Population: 20 million Estonia Weekly reach: 11 million Lithuania: Latvia Private Lithuania Latvia: Czech Hungary: Slovenia Czech: Hungary Slovenia: Bulgaria Bulgaria: Emerging footprint 2010 Population: 37 million Weekly reach: 22 million Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 9
  10. 10. Building the Media House in Emerging Europe Digitalisation of TV distribution Launch of secondary channels Complementary positioning of channel portfolio Bundled sales Challenge market leader Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 10
  11. 11. Bulgaria Channel Penetration Positioning 100 80 60 Age 40 20 0 Diema Diema 2 DiemaF NOVA Women Men 2007 2008 2009 Commercial share of viewing & Media House status Market share index (2008=100) MTG MTG bTV MS CSOV CSOV 140 50% 120 40% Secondary channels 100 80 30% Potential to increase 60 20% penetration 40 10% 20 0 0% Bundled sales 2008 2009 YTD Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 11
  12. 12. Czech Republic Channel Penetration Positioning 60 100 55 80 BARRANDO V CT1 CT2 Prima 60 50 Age Nov a NOVA CINE MA 40 45 20 40 0 Prima COOL Prima COOL 35 2008 2009 YTD Women Men 30 30 35 40 45 50 55 60 65 Commercial share of viewing & TV Advertising Market Share Index Media House status MTG MTG Nova MS CSOV CSOV 50% 100 40% Secondary channels 75 30% Potential to increase 50 20% penetration 25 10% 0 0% Bundled sales 2008 2009 Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 12
  13. 13. Baltics Channel Penetration Positioning 100 80 60 40 2009 20 0 Estonia Latvia Lithuania TV3 TV6 3+ ESTONIA Commercial share of viewing & TV Advertising Market Share Index Media House status 50 115 CSOV Estonia 40 110 CSOV Latvia Secondary channels 30 105 100 CSOV Lithuania 20 95 Potential to increase MS Estonia 10 90 penetration MS Latvia 0 85 MS Lithuania 2008 2009 YTD Bundled sales Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 13
  14. 14. Clear Growth Potential TV ad Est. Ad EU- TV market Sales full market average Country spend/ country size 2009 year 2009 CAGR CPT capita (03-07) index SCANDINAVIA 1 029 m€ 53 € 384 m€ 8% 100 ESTONIA LATVIA LITHUANIA SLOVENIA 792 m€ 9-31 € 210 m€ 7-27% 20-50 BULGARIA CZECH HUNGARY Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 14
  15. 15. Summary • Higher advertising market growth in Emerging vs. Western Europe – low ad spend per capita – low CPT levels – higher historic growth rates • TV will benefit most as is only national reach media in some markets & has high market share in all markets • Successful roll-out of Media house strategy + benefits of digitalization are continually boosting market shares • Substantial incremental operating leverage moving forward Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 15
  16. 16. 2010 Capital Markets Day Anders Nilsson, Chief Operating Officer Hein Espen Hattestad, CEO MTG Norway The Multi-channel Media House Model Modern Times Group MTG AB Nasdaq OMX Stockholm : MTGA, MTGB 16

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