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Week 4 - Assignment
Case Study: Portugal’s TVI - Media Capital Gro
Read the article “Becoming a Broadcasting Leader in 10 Years:
A Case Study of Portugal’s TVI – Media
Capital Group” from the International Journal on Media
Management. Evaluate the success of TVI, the
Portuguese broadcaster, in leading the country’s broadcasting
market in only ten years. In your paper:
Analyze why the acquisition of the Media Capital by the Prisa
Group created many advantages.
Explain diversification strategies as well as growth strategies
adopted by TVI.
Describe TVI’s differentiation strategy and its major
competitors.
Assess TVI’s targeting and segmentation approaches.
Use the SWOT analysis provided in the case and explain how
TVI should develop strategies to
successfully face its future challenges (e.g., cable, other
technological innovations, telephone
companies entering the competition, industry and economic
threats, etc.)
Your paper must include an introduction, a well-developed
body, and a proper conclusion. Be sure to

include a properly formatted reference page, using APA style as
outlined in the Ashford Writing Center.
[email protected], EBSCOhost, and ProQuest are good starting
points for your search. It is also highly
recommended that you search through the specialized journals
in media management (e.g., Journal of
Media Economics, Journal of Media Business Studies,
International Journal of Media Management, and
Academy of Management Journal).
Do not forget to consult the BUS699 Library Research Guide
for further search tips and ideas.
The paper
Must be five to six double-spaced pages in length (not including
title and references pages) and
formatted according to APA style as outlined in the Ashford
Writing Center
(http://writingcenter.ashford.edu) .
Must include a separate title page with the following:
Title of paper
Student’s name
Course name and number
Instructor’s name
Date submitted
Must use at least two scholarly sources in addition to the course
text.
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Description:
Total Possible Score: 7.00
Distinguished - Thoroughly analyzes why the acquisition of the
media capital by the Prisa Group created many advantages.
Proficient - Analyzes why the acquisition of the media capital
by the Prisa Group created many advantages. Minor details are
missing.
Basic - Partially analyzes why the acquisition of the media
capital by the Prisa Group created many advantages. Relevant
details
are missing.
Below Expectations - Attempts to analyze why the acquisition
of the media capital by the Prisa Group created many
advantages;
however, significant details are missing.

Non-Performance - The analysis on why the acquisition of the
media capital by the Prisa Group created many advantages is
either nonexistent or lacks the components described in the
assignment instructions.
Distinguished - Comprehensively explains the diversification
strategies as well as growth strategies adopted by TVI. The
explanation is thoroughly supported with reference to the article
and other scholarly sources.
Proficient - Explains the diversification strategies as well as
growth strategies adopted by TVI. The explanation is supported
with
reference to the article and other scholarly sources, but the
explanation is slightly underdeveloped.
Basic - Explains the diversification strategies as well as growth
strategies adopted by TVI. The explanation is minimally
supported with reference to the article and other scholarly
sources. The explanation is underdeveloped.
Below Expectations - Attempts to explain the diversification
strategies as well as growth strategies adopted by TVI;
however, the
explanation is not supported with reference to the article and
other scholarly sources and/or is significantly underdeveloped.
Non-Performance - The explanation on diversification strategies
as well as growth strategies adopted by TVI is either
nonexistent
or lacks the components described in the assignment
instructions.

Distinguished - Comprehensively describes TVI’s
differentiation strategy and its major competitors. The
description is thoroughly
supported with reference to the article and other scholarly
sources.
Proficient - Describes TVI’s differentiation strategy and its
major competitors. The description is supported with reference
to the
article and other scholarly sources, but the description is
slightly underdeveloped.
Basic - Describes TVI’s differentiation strategy and its major
competitors. The description is minimally supported with
reference
to the article and other scholarly sources. The description is
underdeveloped.
Below Expectations - Attempts to describes TVI’s
differentiation strategy and its major competitors; however, the
description is
not supported with reference to the article and other scholarly
sources and/or is significantly underdeveloped.
Non-Performance - The description of TVI’s differentiation
strategy and its major competitors is either nonexistent or lacks
the
components described in the assignment instructions.
Distinguished - Thoroughly assesses TVI’s targeting and
segmentation approaches. The assessment is thoroughly
supported
with reference to the article.
Proficient - Assesses TVI’s targeting and segmentation

approaches. The assessment is supported with reference to the
article,
but the assessment is slightly underdeveloped.
Basic - Partially assesses TVI’s targeting and segmentation
approaches. The assessment is minimally supported with
reference
to the article. The assessment is underdeveloped.
Below Expectations - Attempts to assess TVI’s targeting and
segmentation approaches; however, the assessment is not
supported with reference to the article and/or is significantly
underdeveloped.
Non-Performance - The assessment of TVI’s targeting and
segmentation approaches is either nonexistent or lacks the
components described in the assignment instructions.
BUS699.W4A1.05.2015
Analyzes Why the Acquisition of the Media Capital by the Prisa
Group Created
Many Advantages
Total: 1.00
Explains Diversification Strategies as well as Growth Strategies
Adopted by
TVI
Total: 1.00
Describes TVI’s Differentiation Strategy and Its Major
Competitors Total: 1.00

Assesses TVI’s Targeting and Segmentation Approaches Total:
1.00
6/7/2019
2/3
Distinguished - Comprehensively explains how TVI should
develop strategies to successfully face its future challenges. The
explanation is thoroughly supported with reference to the
SWOT analysis provided in the article and other scholarly
sources.
Proficient - Explains how TVI should develop strategies to
successfully face its future challenges. The explanation is
supported
with reference to the SWOT analysis provided in the article and
other scholarly sources, but the explanation is slightly
underdeveloped.
Basic - Explains how TVI should develop strategies to
successfully face its future challenges. The explanation is
minimally
supported with reference to the SWOT analysis provided in the
article and other scholarly sources. The explanation is
underdeveloped.
Below Expectations - Attempts to explain how TVI should
develop strategies to successfully face its future challenges;
however,
the explanation is not supported with reference to the SWOT
analysis provided in the article and other scholarly sources

and/or is
significantly underdeveloped.
Non-Performance - The explanation on how TVI should develop
strategies to successfully face its future challenges is either
nonexistent or lacks the components described in the assignment
instructions.
Distinguished - Clearly and comprehensively explains the issue
to be considered, delivering all relevant information necessary
for
a full understanding.
Proficient - Clearly explains the issue to be considered,
delivering enough relevant information for an adequate
understanding.
Basic - Briefly explains the issue to be considered, delivering
minimal information for a basic understanding.
Below Expectations - Briefly explains the issue to be
considered, but may not deliver additional information
necessary for a basic
understanding.
Non-Performance - The assignment is either nonexistent or
lacks the components described in the instructions.
Distinguished - Employs persuasive and applicable information
from credible sources to develop an ample analysis or synthesis
of the topic. Viewpoints of experts are scrutinized thoroughly.
Proficient - Employs applicable information from credible
sources to develop an analysis of the topic.

Basic - Identifies applicable information from credible sources,
but may neglect the application of such information toward the
analysis of the topic.
Below Expectations - Presents information from external
sources, but such information may lack credibility and/or
relevance.
Neglects to apply such information toward the analysis of the
topic.
Distinguished - Displays meticulous comprehension and
organization of syntax and mechanics, such as spelling and
grammar.
Written work contains no errors and is very easy to understand.
Proficient - Displays comprehension and organization of syntax
and mechanics, such as spelling and grammar. Written work
contains only a few minor errors and is mostly easy to
understand.
Basic - Displays basic comprehension of syntax and mechanics,
such as spelling and grammar. Written work contains a few
errors which may slightly distract the reader.
Below Expectations - Fails to display basic comprehension of
syntax or mechanics, such as spelling and grammar. Written
work
contains major errors which distract the reader.

Distinguished - Accurately uses APA formatting consistently
throughout the paper, title page, and reference page.
Proficient - Exhibits APA formatting throughout the paper.
However, layout contains a few minor errors.
Basic - Exhibits limited knowledge of APA formatting
throughout the paper. However, layout does not meet all APA
requirements.
Below Expectations - Fails to exhibit basic knowledge of APA
formatting. There are frequent errors, making the layout
difficult to
distinguish as APA.
Explains How TVI Should Develop Strategies to Successfully
Face Its Future
Challenges
Total: 1.00
Critical Thinking: Explanation of Issues Total: 0.50
Critical Thinking: Evidence Total: 0.50
Written Communication: Control of Syntax and Mechanics
Total: 0.25
Written Communication: APA Formatting Total: 0.25

6/7/2019
3/3
Distinguished - The length of the paper is equivalent to the
required number of correctly formatted pages.
Proficient - The length of the paper is nearly equivalent to the
required number of correctly formatted pages.
Basic - The length of the paper is equivalent to at least three
quarters of the required number of correctly formatted pages.
Below Expectations - The length of the paper is equivalent to at
least one half of the required number of correctly formatted
pages.
Distinguished - Uses more than the required number of
scholarly sources, providing compelling evidence to support
ideas. All
sources on the reference page are used and cited correctly
within the body of the assignment.
Proficient - Uses the required number of scholarly sources to
support ideas. All sources on the reference page are used and
cited correctly within the body of the assignment.
Basic - Uses less than the required number of sources to support

ideas. Some sources may not be scholarly. Most sources on
the reference page are used within the body of the assignment.
Citations may not be formatted correctly.
Below Expectations - Uses an inadequate number of sources
that provide little or no support for ideas. Sources used may not
be
scholarly. Most sources on the reference page are not used
within the body of the assignment. Citations are not formatted
correctly.
Written Communication: Page Requirement Total: 0.25
Written Communication: Resource Requirement Total: 0.25
Powered by
Becoming a Broadcasting Leader in 10 Years: A Case Study
of Portugal’s TVI—Media Capital Group
Paulo Faustino
Autónoma University of Lisbon, Portugal
Jonkonping International Business School, Sweden
The main objectives of this article are to analyse (a) some
media group strategic corporate management
options, especially within the television segment; (b) as well as
identify critical success factors to achieve
leadership. Some future challenges are also identified within the

scope of new broadcasting technologies
such as Internet protocol television, cable, satellite, and digital
terrestrial television.
TV Market Context and Development
of the TVI—Media Capital Group (MCG)
TVI and the Television Sector in Portugal
The strong influence of the Catholic Church on TVI
(Televisão Independente or Independent Television) was
evident in minute detail: The first TVI logo—used until
1994—was designed to look like the number four made
from a Christian cross. Figure 1 shows the various logos
TVI has adopted since its foundation until now.
TVI was essentially broadcasting imported programs
in its early years. At a time where Sociedade Indepen-
dente de Comunicação (SIC) was betting on less usual,
even alternative, programs, TVI was strongly investing
in foreign “family” programs and game shows that were
popular in other countries. Meanwhile, SIC was betting
on Brazilian soap operas, an audience phenomenon of
guaranteed success, establishing a strategic partnership
with Brazilian TV Globo, the largest soap opera producer
in the world.
SIC equally opted for betting on bolder films and
series, namely of an erotic character, which aroused
the interest of an audience not used to these types of
programs because RTP (Radio and Television of Portugal),
as a public television station, was not allowed to show
this type of content. RTP attempted to do so in 1991,
before the emergence of private television stations, when
The Empire of the Senses, a film by Japanese director Nagisa

Address correspondence to Paulo Faustino, Director of Media
XXI
and Director of Master in Media Management, Autónoma
University
of Lisbon, Visiting Researcher of Jonkonping International
Business
School, Sweden. E-mail: [email protected]
Oshima was broadcast, resulting in a strong controversy
between the Church and RTP, given that the former insti-
tution defended that a public television station (such as
RTP) was not allowed to show films of such a nature,
even at late hours. The comment made by the archbishop
of Braga, D. Eurico Dias Nogueira, who affirmed to have
learned more from 10 min of the film that in his entire
life, became famous.
TVI as a Project Associated With the Church
and a Project Integrated in MCG
TVI started its activity as the second private television oper-
ator in Portugal on February 20, 1993. When Portugal
joined the European Union in 1986, the debate on private
television channels was brought to the forefront because
only RTP had been operating in the country since 1957.
In 1989, the Television Law (Law number 58/90 from
September 7 revoked by Law number 31–A/98 from July
14, which was subsequently revoked by Law number
32/2003 from August 22) was approved, which “marked
the end of the state monopoly and enabled private enti-
ties to pursue television activities, under licensing granted
by the Portugal Government, following public tender.”1
Approximately 6 years after its foundation, TVI was
acquired by the communication group Media Capital in
1998, having initiated a new stage marked by the ambi-
tion of becoming a new leading station in Portugal.2

When José Eduardo Moniz became the managing director
of TVI, the station started presenting better results,
rapidly going from a station doomed to failure to an
audience leader in Portugal.
The International Journal on Media Management, 9(4), 151–163
151
1993–1994 1994–1996 1996–2000 2000–2007
Source: Company
Figure 1. Independent Television (TVI) logo evolution
from 1993 to 2007.
In 2005, Media Capital (the main TVI shareholder)
was acquired by the Prisa Group, a Spanish media group
present in 23 countries. The MCG started with a weekly
newspaper, Independente,3 having sold this weekly publi-
cation in 2001 to Inês Serra Lopes and other shareholders.
In the last 6 years this group has concentrated its activi-
ties mainly in the television, radio, and Internet sectors.
Media Capital’s press holdings consist of magazines and
newspapers, including the local partner of the Metro
newspaper. The complete holdings of the MCG as of 2006
are presented in Figure 2.
TVI is one of the MCG companies, presently being the
most important broadcasting operator in Portugal, with
leading brands in the majority of segments where it is
present such as television, radio, the press, outdoor, and
Internet. MCG activities may be summarized as follows:

� Television business—TVI and NBP (television and
production).
� Music—FarolMúsica (record label) and MC Enter-
tainment (a production company for theatre
plays, concerts, and events) and Media Capital
Radio, which owns Rádio Comercial, Rádio Clube
Português, Cidade FM, Best Rock FM, and Cotonete
(the only online radio in Portugal).
� Media Capital Editions, which owns social maga-
zines such as Lux, Lux Woman, Maxmen, and Grazia
within the generalized press segment and titles such
as Casas de Portugal, Briefing, Revista de Vinhos, and Auto
Comércio within the specialized press segment.
� Internet—IOL portal.
� Outdoor advertising—Media Capital Outdoor
(MCO).
� Other business areas—several partnerships and
joint ventures in areas like cinema and the daily
press.
In December 2005, the shareholder structure of MCG
was as follows: The Prisa Group (Vertix, SGPS, SA) was
the largest shareholder; RTL, a television company owned
by the Bertelsmann group, was a close second; followed
by Berggruen Holdings, Ltd. and Miguel Pais do Amaral
holding. During 2006 and 2007, the Prisa Group devel-
oped an aggressive strategy (involving a takeover bid)
to reinforce its shareholder position, having achieved a
94.4% share in the end of the first quarter of 2007.4

TVI’s position was built in only 10 years of operation.
The group has synergies with several entities, involving
production of television and music contents as well as
organization of cultural events. Distribution of movies
and sports rights has allowed this group to reach a
Media Capital
Television Advertising Internet ISP RadioPress
TVI
NBP
Lux Channel
Protocol with
Sports TV
“mupis”
MCO TV
TC
IOL
Vizzavi Magazines:
Lux Brand
Briefing
Casas de Portugal
Maxmen
Notícias Choque
Poster
Recreio
Revistas de Vinho
Portuguese Wine
Newspapers:
Metro

Cidade FM
Nostalgia
Radio Comercial
Rádio
Renascença
MCO Radios– Radio
XXI
Other Areas
Movies – CMCL; Fox/MGM; Miramax; and independent north
american
production companies
Music
Fairs – Expolider
Exhibitions
Sports – União de Leiria
Figure 2. Media Capital Group, 2006.
152 Faustino
unique position within the competitive media sector,
which reflects a clear growth strategy and high manage-
ment dynamics. Media Capital made an initial public
offer, in 2004, to the Lisbon stock market.
Conquering the Leadership and the Market Context
In the beginning of the 1990s, television market guide-
lines were well defined. RTP (the public channel) enjoyed
a broadcasting monopoly, with two generalist channels:
RTP1 (with a market share of approximately 80%) and
RTP2 (with the remaining 20% of the market). This domi-

nance allowed them privileged access to the best inter-
national shows and the most popular national events,
such as Globo’s Soaps (the Brazilian soaps considered the
best in the world) and football matches. Due to their
status as a public service broadcaster, they also benefited
from large sums from government support, along with
advertising revenues. At this time, the penetration rate of
television sets in Portuguese homes was already around
95% and, although the national population was spending
less time watching television than in average European
homes, average daily consumption was relatively high.
This situation made it difficult for new private competi-
tors to enter this industry in several ways:
1. Any new operator had to support its own activities
through advertising, in direct competition with
the two other channels mentioned earlier.
2. The economic recession in Europe in 1992 caused
smaller global investment in advertising, with
special impact on the more expensive media such
as television.
3. In addition, because it did not seem reason-
able to foresee a significant increase in television
set sales, audiences had to be conquered at the
expense of rivals.
4. Finally, the high costs of operating broadcasting
stations made it impossible from the beginning to
target specific market segments and would even-
tually decrease the number of private projects
aimed at creating new generalist channels.
Competition in the Television Market

Access to the national TVHH market was an additional
imperative that potential operators had to satisfy. In this
sense, SIC decided to use state company RTP’s broad-
casting network from the beginning, which allowed it to
ensure an initial coverage of 50% of the Portuguese popu-
lation and continuous expansion with time. TVI decided
to build its own network using the land occupied by
Rédio Renascença (owned by the same group), with an
investment of approximately E20,000,000.
However, it was not a good idea to have such large
geographical coverage when the majority of the viewers
did not even know how to get the new channels on their
new television sets. To reinforce its position during its
initial stage (1995), SIC undertook an intense educational
campaign all over the country, not only to help with
the channel setting on television sets, but also to intro-
duce the experience of their shows, combined with an
offer consisting of a diversified program portfolio, a high-
quality news bulletin, Brazilian soaps, and an aggressive
campaign to acquire advertising.
In the period between 1995 and 2001, the initial effort
made by SIC paid off, with this channel becoming a tele-
vision audience leader, both during the day and in prime
time. However, with the sale of TVI in 2000 and the
complete changes made to their program schedules in
2001, TVI conquered the leadership, having maintained
that position.
The main factors behind SIC‘s leadership loss were
its refusal to broadcast “Big Brother” (a reality show
broadcast by TVI) and bad management of program
stocks concerning Globo Soaps. “Big Brother” was a
show of doubtful quality and interest, besides the fact

it was a rather expensive product (around E5,000,000).
SIC did not quite understand its effects on the market
and underestimated its impact, having refused to
include it in its programs. On the other hand, TVI,
although in serious financial difficulties, decided to
take this step, completely changing its image with
the viewers. This product was a huge success, having
contributed to relaunch TVI within the television
sector.
Management and Program Development
and Strategies
Growth, Strategy, and Business Synergies
To Media Capital, the Prisa Group represented a strong
partner for future development. The experience enjoyed
by Prisa in the press, radio, and paid television segments
helped the MCG continue its growth, as well as exploit
synergies and develop joint ventures. Presently, Media
Capital has a strong shareholder base that brought
together the main media group in Spain (and one of the
biggest in Latin America). According to Juan Luís Cébrian,
president of Prisa,5 “Portugal is a market that we already
know and we believe to have a strong growth potential.
We want to work with our Portuguese colleagues from
the MCG to exchange experience and knowledge, as well
as develop the business.”
TVI—Media Capital Group 153
When examining the structure of the group and
the balance of activity in 2004 and the beginning of
2005, one finds that Media Capital has been diver-

sifying its businesses within the specialized press,
radio, television (including cable), Internet (access and
multimedia contents provider), outdoor advertising and
record industry sectors, organizing musical and cultural
events, as well as business fairs and exhibitions, and
extending its activities to distribution of movie rights
and participation in an anonymous sports football club
society.
On January 28, 2005, at the Media Capital “Investor’s
Day” (shareholder meeting), the Chairman of the Board,
Miguel Paes do Amaral, presented three main points
concerning the organization’s growth strategy aimed at
obtaining profits:
1. Structural growth of the working businesses—
through market growth balance (considering
price and volume variables), together with growth
of the group’s advertising investment and devel-
opment of new revenue areas in every media.
2. Concentration of efforts toward cost efficiency—
by economy of resources involved in operational
structures; maintaining of CAPEX at minimum
levels; and exploitation of contents, promotion,
and synergy of costs associated with the group.
3. Continuous investment evaluation—by managing
program and marketing costs, as investments, and
through evaluation of the group portfolio and
growth opportunities through potential creation
of value.
During this same meeting, the Chairman of the Board
also discussed potential exploitation of contents, adver-
tising, and promotion synergies across several group

media:
� “Quinta das Celebridades,” a TVI reality show,
“used” by MCG radios, Lux magazine, and the IOL
portal.
� Exploitation of TVI’s news content by outdoor
advertising; MCO; and contents exchange between
Agência Financeira (financial information Web
site), Mais Futebol (sports information Web site),
and Portugal Diário (generalist Web site), all of
which are owned by the IOL portal.
� TVI, Media Capital radios, and free weekly news-
paper Metro, were encouraged to share news with
each other.
On February 20, 2006, also during the presentation made
on Investor’s Day, some objectives of the Media Capital
general strategy for profitable growth were also defined:
1. Structural growth in current business:
� Use leading positions to leverage an increase
in prices and market shares.
� Achievement of additional revenue from
group content and new platforms.
2. Focus on cost efficiency:
� Keeping lean operating structures and
CAPEX at minimum levels.
� Exploiting cross-synergies to reduce costs
within the group.

3. Best practices in the sector:
� Program and marketing investments orien-
tated toward returns.
� Focus on leading, reference media assets
aimed at organic growth.
Business Area History
Television. In 1999, Media Capital acquired the
majority of TVI’s capital, having relaunched a second
Portuguese private channel in 2000. In the beginning of
that year, TVI’s market share was 18%, with this channel
having surpassed SIC in the third quarter with 33.3%.
TVI’s position was due to its prime-time programs, a
combination of a news bulletin of a popular character,
followed by soap operas, Portuguese series, and the first
edition of the “Big Brother” reality show.
In the beginning of 2002, Media Capital’s activity
within the television sector was expanded with the acqui-
sition of 45% of NBP’s social capital (the main Portuguese
soap opera and popular series production company and
supplier for TVI). In the last quarter of 2002, Media
Capital bought the remainder of NBP, through the acqui-
sition of VAL.
NPB integrated production companies FEALMAR and
Multicena (with 5 studios employing over 500 collabora-
tors); Empresa Portuguesa de Cenérios, which provides
set design services—construction, assembly, decoration,
and assistance; Casa da Criação, responsible for devel-
oping television scripts produced by NBP; Camarins, a
television and film acquisition, management, mainte-
nance, and commercialization logistics platform; and

EMAV, a unit orientation directed toward audiovisual
equipment leasing and management. Not associated with
any particular company within the NBP structure, a
workshop company also exists to train soap opera actors,
as well as an audiovisual creation and production area
and a center to export television contents produced by
NBP.
Within the television sector, TVI’s activity is supported
by RETI, a network owned by TVI since its launch in
1993. Unlike other Portuguese television channels, TVI
does not lease Portugal Telecom’s services to broadcast
its transmissions.
154 Faustino
Internet. In March of 2000, Internet service provider
IOL was launched as a portal, having become the place
to launch other group brands and contents, as well as
encourage sales of products and services including adver-
tising. Overall, 20 sites were launched and linked to
publications, television channels, theme contents and
entertainment, personal pages, and editions of exclu-
sively electronic publications such as Portugal Diário and
Mais Futebol.
IOL also promoted free services or paid additional
services such as e-mail, chat and search engines, and
ticket purchases through Plateia IOL. Of special interest is
“Cotonete.Iol,” the first Portuguese digital radio channel
that allows personalization of music lists accessible to
each user. Media Capital is also the owner of ISP Vizzavi,
acquired from Vodafone.

Press. Since May of 2000, the MCG offers specialized
titles associated with its Lux brand: Lux magazines, Lux
Woman and Lux Deco (no longer existing)—which are also
associated with the contents of television magazine Lux.
Media Capital continues to publish media and adver-
tising newspapers Briefing, Casas de Portugal (real estate),
Maxmen (men’s magazine), Notícias Choque (popular photo-
journalism), Poster (movies and music, aimed at young-
sters), Recreio (children), Revistas de Vinhos and its English
version Portuguese Wines.
In May of 2001, Media Capital sold Sociedade de Comu-
nicação Independente, editor of newspaper O Indepen-
dente, a weekly newspaper that had created the group
years ago, which had been in serious financial difficulties
for many years. The newspaper was acquired by a group
of 10 investors, including directors Inês Serra Lopes and
Vítor Cunha. This newspaper closed down in September
of 2006.
Media Capital has maintained a more reduced activity
in the press segment through Feira das Vaidades, SA, a
publisher of women’s, men’s, and tabloid magazines. In
October of 2003, Media Capital redirected its investment
priorities to the audiovisual and Internet sectors, having
almost abandoned its activities within the press sector by
selling its subsidiary Económica, the publisher of news-
papers such as Diário Económico and Semanário Económico,
to Recoletos (a Spanish subsidiary held by British media
group Pearson).
Since 2004, Media Capital, through its subsidiary
Meglo, SGPS, SA, has established a joint venture with
Swedish group Metro International SA. Meglo is the
co-publisher of the Portuguese edition of free commuter
newspaper Metro. This daily was launched in December of

2004, being distributed in Lisbon’s subway. Media Capital
Multimedia, which is responsible for local contents
production, holds 35% of Metro’s social capital and Metro
International, being in charge of the project’s opera-
tional management, also owning 65% of the publisher’s
social capital. This daily newspaper has an average
number of 30 pages of news concerning areas such
as society, economy, sports, international, leisure, and
advertising (the only revenue source for this publication).
On an international level, Metro has 61 different editions
in European cities, as well as North and South America
and Asia.
Radio. In 2003, radio stations owned by Media
Capital (Romântica, Capital—now extinct—Cidade FM,
Nostalgia, and Rédio Comercial) all underwent restruc-
turing regarding their editorial and program guide-
lines. Commercial strategies were also redefined for all
services.
Rádio Comercial was relaunched on February 15,
2003; its programs consisted essentially of musical
successes of the 1980s and 1990s, as well as information
(short, every hour) aimed at the young adult segment
(25–44 years of age). Best Rock FM followed Rédio Comer-
cial’s tradition, becoming a successful pop-rock music
station (from the 1990s until today), aimed at an audi-
ence between 18 and 26 years of age. When presented
to the investors, Best Rock was described as being neck-
to-neck with RFM, the leading station for this particular
segment, integrated in the Rádio Renascença group.
Cidade FM was revamped to play more Portuguese
music, targeting young people aged 17 to 24. Nostalgia
disappeared, having been replaced by Rédio Clube

Português. This station was restructured to play
Portuguese and International pop-rock classics of the
1960s, 1970s, and 1980s, targeting adults between 42 and
55 years of age.
The radio production and broadcasting activities
developed by Media Capital channels are complemented
by service provision to advertisers and the general public,
mainly recording of commercials in the radio station
studios and exploitation of merchandising, through
commercialization of theme CDs associated to TVI’s soap
operas or other themes. On August 12, 2004, the High
Authority for Social Communication authorized Media
Capital to buy the entire capital of Rédio XXI, through
MC Rédios/Rédio Comercial.
Advertising. During the launch period for the new
TVI programs, different synergies were developed with
the outdoor advertising companies acquired by Media
Capital in 1999 and 2000. During this period, Media
Capital acquired some of the main companies that owned
a powerful network of outdoor and public transport
advertising formats.6
Within the outdoor advertising sector, Media Capital
owns 14,000 billboards in several areas, through MCO
TV, set in the Lisbon and Porto subways, Carris de Lisboa,
Transtejo (ferries across the Tagus River), Fertagus (Tagus
River bridge trains and Lisbon buses), SATUO (Oeiras
monorail), STCP (Porto buses), TUB (Braga transports),
REFER (railway network), as well as having advertising

activity around city structures and fixed urban adver-
tising spots (nets and big formats) and through the
Portuguese bus network.
In July of 2004, Media Capital established an agree-
ment with Médias et Régies Europe, SA for the acquisition
of 35% of the capital of TC, Publicidade em Transportes e
Meios de Comunicação SA (Advertising in transport and
communication means, SA), which also operates within
the Lisbon and Porto urban structure segment, MCO.7
Other areas. The remaining business areas in which
Media Capital is involved are music, movies, fairs, exhi-
bitions, and sports. Within the music segment, the
group develops its activity through Media Capital Enter-
tainment, a company aimed at booking actors, career
management, and organization of musical and cultural
events, especially record producing, live music presenta-
tions, and other events associated to radio and television
programs owned by Farol Música. In October of 2004,
Farol Música established an agreement for the exclusive
distribution and sale of Warner Music in Portugal, as well
as encouragement of synergies with Portuguese artists
represented by the national label.
Within the movie segment, Media Capital manages
movie rights through a partnership with Castello Lopes
Multimédia and agreements with FOX/MGM, Miramax,
and independent North American production compa-
nies. Within the fairs and commercial exhibitions
segment, Expolider is responsible for the conception,
organization, and implementation of events. The partic-
ipation of Media Capital in União de Leiria’s Anony-
mous Society places the group within the sports activity,
through a Portuguese Premier League football club. In
2004, Media Capital, SGPS was admitted to the stock

market (Euronext Lisbon).
Other General Strategy Elements
To better understand the extent of the success of Media
Capital’s strategy for the television segment, Table 1
shows audience evolution since the foundation of TVI
(1993) until recent years (2006).
As already suggested, the public channel (RTP) did not
have a market-orientated strategy before the emergence
of private channels. In this sense, it is not surprising that
SIC achieved the first position in the ranking of most
seen channels in Portugal only 3 years after initiating its
broadcasting activity, dethroning RTP1 and sending RTP2
to the last position. On its turn, TVI occupied the third
position but lost share consistently until 1997, having
Table 1. Audience Share Evolution of Free-to-Air TV
Channels
Television Audience Share—Four Main Free to Air Channels
(1992–2006) (Percentages)
Anos RTP 1 RTP 2 SIC TVI
1992 72,2 17,9 8,5* **
1993 61,5 17,6 14,3 6,6
1994 46,9 9,8 28,4 14,7
1995 38,4 6,4 41,4 13,8
1996 32,6 6,5 48,6 12,3
1997 33,0 5,6 49,3 12,1
1998 31,5 6,2 49,2 13,1
1999 28,5 6,0 48,1 17,4
2000 24,3 5,6 42,2 20,8
2001 20,1 5,6 34,0 31,9

2002 21,1 5,3 31,5 31,4
2003 23,8 5,0 30,3 28,5
2004 24,7 4,4 29,3 28,9
2005 23,6 5,0 27,2 30,0
2006 24,5 5,4 26,2 30,0
Note. Source: Marktest/MediaMonitor, http://www.ics.pt/index.
php?op=cont&lang=pt&Pid=78&area=330, retrieved May 2,
2007.
RTP=Radio and Television of Portugal; SIC=Sociedade
Independente
de Comunicação; TVI=Independent Television.
only managed to increase its share by one point in 1998.
In summary, TVI’s strategy was based on its character as
a church-depending channel, oriented toward an audi-
ence mostly comprising housewives and youngsters who
watch television in the afternoon.
This acquisition of TVI in 1998 entailed not only
new owners but also a new managing director, José
Eduardo Moniz, who was largely responsible for all
subsequent events in the life of this television station.
With a new corporate management model and a new
program strategy, encouraged by Media Capital, TVI freed
itself from the influence of the Catholic Church and
started assuming a new position within the audiovisual
market.
In 1999, TVI achieved its best result ever (17.4%
of share), gaining audiences both from SIC (leading
channel) and RTP1. TVI resorted to the market, having
bought programs from a then recent Dutch television
program producer, Endemol, which had already supplied
programs with good audience results to SIC (Chuva de
Estrelas—All You Need is Love). In the end of the 1990s,

this producer was strongly betting on an astonishingly
successful television program format all over the world—
reality shows, the best known of which is “Big Brother.”
In just 1 year, TVI’s share increased from approximately
20% to over 30%, this being mostly due to this program
and its subsequent editions.
However, this turning of tides at the station was not
due solely to reality shows; TVI started betting strongly
on national production, namely regarding soap operas.
Todo o Tempo do Mundo, Jardins Proibidos, and Olhos de Água
156 Faustino
were the soap operas that initiated this cycle, having
obtained enormous audience shares. TVI has been betting
strongly on this type of program since 1999, with each
soap opera proving more successful than the previous.
From 2000 onward, Casa da Criação started writing the
scripts for TVI novels, which represents total profession-
alism. The Queluz station realizes that national soap
operas represent a fundamental element to achieve its
targets, on par with reality shows, directing all produc-
tion means toward TVI. The Casa da Criação (soap opera
scripts), FEALMAR, and NBP (producers) end up being
acquired by Media Capital. Therefore, the TVI group now
own all necessary means for station soap opera produc-
tion, from script writing to production, casting, actor
training, and so forth. Table 2 shows the most successful
soap operas.
The year of 2005 represented another important mile-
stone for TVI: The channel attained leadership, with
a 30% share versus the 27.2% share achieved by SIC,

dethroning the latter station, which had occupied the
position of market leader for 10 consecutive years.
Another audience phenomenon, named Morangos com
Açúcar was equally important. Effectively, a very signifi-
cant market segment existed that neither reality shows
nor soaps managed to mobilize in favor of TVI: the adoles-
cent segment. With the start of this soap in 2003 (which
is already in its 4th series), TVI also managed to capture
this target audience.
Two other Portuguese audiovisual sector phenomena
emerged associated to this soap: manufactured music
bands that rapidly reached national sales tops (D’ZRT and
4Taste) and product placement, which entails placing
(advertising) brands in a subtle fashion. This had already
been done in 1998 with the series Médico de Família (from
Endemol), but it was with the series Morangos com Açúcar it
became relevant. It is certainly a very important revenue
source for TVI, as may be observed from the economic
and financial indicators shown in the following
section.
Table 2. List of the Most Successful Independent
Television Soaps
Soap Year Share
Olhos de Água 2001 52%
Filha do Mar 2002 50%
Dei-te Quase Tudo 2006 49%
Anjo Selvagem 2003 48%
MCA II Verão 2005 47%
Fala-me de Amor 2006 46%
Mundo Meu 2005 46%
Nunca Digas Adeus 2002 46%
Ninguém como tu 2005 45%

Queridas Feras 2005 45%
Concerning other general strategy elements, TVI
signed a protocol with Sport TV on March 13, 2006 where
it was established that TVI had exclusive broadcasting
rights for the Portuguese Premier League football games
during the 2006 through 2007 and 2007 through 2008
seasons. TVI will broadcast games from a major team
every week, also holding exclusive broadcasting rights
for all other games.
Another important aspect to be highlighted in this
group’s strategy is the importance given to market rela-
tions: The MCG has a market relations representative
responsible not only for external communications but
also for investor communications and relations. The
mission of the relations representative regarding Media
Capital Investors is to supply relevant information, in
a consistent fashion, to all interested parties involved,
in the sense this ensures the possibility of correct
company evaluation any moment (regardless of the char-
acter of the news in question) to minimize investor
risks.
As part of this information policy, the MCG presents
quarterly results (according to legal requirements), orga-
nizes meetings between the Media Capital Management
team and investors, as well as a visit of the chief
financial officer or the Investor Relations to the sales
side at least once a year, also organizing an annual
event (Investor’s Day) with the participation of people
responsible for the various business units. Investors and
analysts are also allowed to participate in regional and
sector conferences, conference calls, and visits in Lisbon,
when required. Media Capital provides the following
regular information and presentations: news, mandatory

information, monthly audience reports, quarterly results
presentation and broadcast, specific company presen-
tations, general assembly communications, and yearly
accounting reports.
As already suggested regarding TVI’s program
strategy, a strategic approach to prime time (8 p.m.–
12 a.m.) and the hours prior to prime time (6 p.m.–8 p.m.)
exists, as well as in the quarters with bigger seasonal
advertising investment (2nd and 4th quarters). Regarding
target audiences, TVI has defined as the segment repre-
sented by housewives between 25 and 44 years of age
and their families as its most relevant commercial target.
To achieve market share among its target audience,
TVI ensures different programs are broadcast over week-
days and weekends. One differentiating aspect of TVI’s
programs compared to other television channels has
been a greater focus on soap operas and other televi-
sion shows starring national actors. Figure 3 shows this
television operator’s program strategy in a more system-
ized fashion, this being based on three aspects: informa-
tion (28%), fiction (32%), and entertainment (24%). Other
programs (sports and international, among others) repre-
sent only 16%.8
FOCUS ON RETURN: - Prime time
- Strong quarters
- Audiences in relevant
demographic profiles
Market audiences with
high relevance on

advertising revenues
Selective key target
time slot
Define priorities
for programming
budget
Define & fine tune
programming grid
Housewives
ABC 1 25/54
Housewives
ABC 1 25/54
Families 4–44
Adults: > 15
Access to prime –
time
Prime – time
Night – different
for weekday/weekend
> ¾ of TVI
Programming
investment on these
time slot
Focus on most

profitable quarters
News & sports done in
- house
Portuguese
fiction/NBP/TVI
International most
acquired to majors
Entertainment is
locally adapted/produced
REVIEW STRATEGY BASED ON MARKET REVIEW
DAILY GRID BASED ON AUDIENCES
Figure 3. Key factors of Independent Television’s (TVI)
programming strategy.
Main Economic and Financial Indicators
Since 2001, MCG’s revenue has been increasing with the
exception of 2003, where a slight decrease occurred. As
seen in Figure 4, group revenue was approximately 221
million euros in 2005, the highest amount ever regis-
tered. Regarding total revenues, 72% originated from TV,
7% from radio, 7% from the outdoor business, and the
remaining 14% originating from all other businesses. In
2006, Media Capital revenue reached 230 million euros,
which represented a 4% increase relative to 2005.
In 2005, Media Capital’s total advertising revenue
represented approximately 24% of the total advertising
investment in Portugal. In Portugal, television represents
42% of the total advertising market with 4% for cable, 7%

for radio, 34% for the press, 12% for outdoor advertising,
approximately 1% for movies, and 1% for the Internet and
other means. MCG accounts for 46% of the total television
advertising investment in Portugal, 30% in radio, approx-
Revenues
200
219 221
230
180
185
190
195
200
205
210
215
220
225
230
235
2003 2004 2005 2006
M
ill
io
n
eu
ro

Figure 4. Revenue evolution.
imately 3% in the press, around 20% outdoor and approx-
imately 30% of the Internet advertising investment.
TVI was the leading television channel in Portugal in
2005, for the first time in its history. TVI had been the
leading station in prime time since 2001, but it reached
an average audience of 34.9% of the market in 2005.
This value translates into average daily contact with over
6.4 million people, representing an almost 2% growth
relatively to the previous year.
TVI’s leading position has also been confirmed by
its more important target audiences, especially women
(36.7% of share) and younger families. TVI has maintained
and reinforced its leadership in prime time, with a global
share of 38.4% in 2005. The second leading channel (SIC)
was 7% behind, with RTP1 registering an audience share
of 25.1%. This growth in TVI’s audience was also seen in
other time slots, with a share growth between 6 p.m. and
8 p.m. from 30.1% in 2004 to 36.7% in 2005. TVI con-
tinuedtoconsolidateitsleadingpositionthroughout2006.
As may be observed in Table 3, the good audience
performance achieved was reflected in economic and
financial results, with a continuous net result (consoli-
dated) improvement: A 136% improvement was observed
between 2003 and 2006.
Regardingthecontributionofeachbusinessarea,asmay
be observed in Table 4, revenue sources associated to the
television business (172 million euros in 2006) constitute
the main MCG business drivers. The weight of the televi-
sion business segment (approximately 25%) in this group’s
accounts has grown over the years, with a 27% variation

having been observed between 2003 and 2006.
158 Faustino
Table 3. Balance sheet and Profit and Loss Accounts
in Millions of Euros
2003 2004 2005 2006 �%2006/2003
Net Assets 318 343 350 349 10%
Shareholders Funds 20 104 131 147 648%
Operational Results 6 29 29 33 500%
Net Results (consolidated) –44 –6 13 16 136%
Source: Elaborated by the author from report and accounts
infor-
mation.
Table 4. Revenue Per Business Segment in
Millions of Euros
2003 2004 2005 2006 �% 2006/2003
Television revenues 135�3 143�4 159�5 172�0 27%
Radio revenues 12�5 14�4 14�9 13�9 11%
Outdoor advertising 15�5 18�9 16�6 17�4 12%
Othersa 36�5 35�4 30�3 26�3 −28%
Total revenues 199�8 212�2 221�2 229�5 15%
EBITDA Television 38�1 41�1 48�4 51�0 34%
EBITDA Radio 1�1 2�0 0�5 0�7 −38%
EBITDA Outdoor
advertising
1�5 2�9 1�5 1�8 16%

EBITDA Other −4.7 −4.5 −9.9 −8.5 80%
Note. EBITDA=earnings before interest, taxes, and deprecia-
tions.
aRefers to businesses: Internet, editing, and audiovisual
producers.
Table 5 shows a more detailed analysis of main televi-
sion economic and financial indicators. A common aspect
may be observed for all indicators: continuous growth
for all years considered. It is also worth emphasizing the
more significant variation in other operational revenues,
besides advertising; in the period between 2003 and
2006, other operational revenue went up by 84%, which
evidences the effort made by the television business to
diversify its revenue sources to reduce its dependence
from advertising. Among TVI’s complementary revenue
sources, the following should be highlighted: program
sponsoring, product placement, contents (soaps) sales to
Table 5. Television—Main Indicators in Millions of Euros
2003 2004 2005 2006 �%2006/2003
Advertising
revenues
120 128 136 143 20%
Other operational
revenues
16 21 23 29 84%

Total revenues 135 149 159 172 27%
Total operational
costs
96 105 111 121 25%
EBITDA 38 43 48 51 34%
Note. EBITDA = earnings before interest, taxes, and deprecia-
tions.
other countries, merchandising and licensing, interactive
television (iTV), and text messages (SMS).
Despite the contribution of the radio segment being
less relevant than that of the television segment—and
similar to that of the outdoor business—the group has
been betting on radio, currently holding a market share
of approximately 30% in terms of advertising investment.
Regarding main indicators, it is possible to observe from
Table 6 that continuous growth in advertising revenues
was verified between 2003 and 2005, a trend reversed in
2006, where a negative variation was registered relatively
to 2005: approximately 11%.
The contribution of the outdoor segment to the
group’s total revenue is slightly superior to that of the
radio segment, although some indicators also suggest
a trend toward stagnation or a decrease in advertising
revenues. It is also worth emphasizing the very signifi-
cant growth observed in 2006 of other revenue sources
associated to this business.
Consequently, a 4% growth in consolidated revenues
was verified in 2006 (to a total revenue of 229.5
million euros), with the television segment increasing by

8%. Advertising revenues resulting from exploiting the
various media reached 179.2 million euros, which repre-
sents a 4% growth relatively to 2005, mainly supported by
the television segment, which registered a 5% increase.
Operational results (earnings before interest, taxes, and
depreciations) reached 33.4 million euros, which repre-
sents a 16% increase relatively to the previous year. As
already referred to, this good performance is essentially
due to the television business, where the fact that TVI
was the audience leader for the second consecutive year,
in 2006, should be highlighted.
Conclusions and Challenges for the Future
In little over 10 years, the MCG became one of the
most important players within the Portuguese market:
(a) between 1991 and 1994 it was a small press
publisher; (b) in 1998 it was a small media group;
and (c) from 1998 onward it started assuming the
Table 6. Radio—Main Indicators in Millions of Euros
2003 2004 2005 2006 �%
Advertising
revenues
11�2 14�2 14�4 12�8 14%
Other operational
revenues
1�3 0�4 0�5 1�1 −16%
Total revenues 12�5 14�6 14�9 13�9 11%
Total operational

costs
10�9 12�4 14�5 13�2 21%
EBITDA 1�1 2�2 0�5 0�7 −38%
tions.
position of one of the largest media groups, although
it repositioned itself by mainly betting on audiovi-
sual media. Within this context, it may be concluded
that TVI’s success is due to the fact it belongs to a
complete social communication group (i.e., a group inte-
grating television, radio, written press,9 the Internet
and television content production). The existing close
connection between the group’s media products allows
exploitation of various synergies, which may encourage
better performance. A close relation exists between the
various Media Capital companies, which, despite oper-
ating in different sectors, are closely interlinked and
impel the development of their foundation company TVI.
This strategy has been very fruitful for TVI since 2000,
having inclusively allowed this station to reach leader-
ship since 2005. This is thus the second consecutive year
TVI manages to lead the Portuguese generalist audiovi-
sual market, with data from the first quarter of 2007
confirming this trend. TVI is starting, at the present
moment, to consolidate its position of undisputed audi-
ence leader among all Portuguese television channels.
Nevertheless, the television market is very volatile, as

well as being vulnerable to changes; thus, any innovative
strategies or strategies aimed at relevant but yet uniden-
tified market niches may reverse the situation.10
Regarding the market and specifically the television
segment, Media Capital estimates that in the next few
years the advertising market will grow between 1% and
2%, with television advertising growing in line with
this market. Advertising revenues are estimated to grow
above overall market growth, with increases in total
market share and total television segment revenues
remaining stable. Concerning costs, it is predicted that
program costs will remain stable, considering stable
market conditions and increased television content
production efficiency.
For the last 5 years, TVI has been an audience leader;
this is expected to continue as long as the station continues
to bet on Portuguese fiction production (soap operas and
series), reality shows (internationally successful formats),
and broadcasting of football games. Similarly to what may
be observed for any business, ups and downs will occur,
as did in the month of June of 2007, when the World
Cup was broadcast—national team games were broadcast
by the competition. However, we should expect that the
decrease in audience verified in that month (June) was
the consequence of this particular situation and that it
will not endanger the channels leading position. In this
context, as suggested by Johnson (2006), the broadcasting
industry is affected by six main factors:
1. Loss of share is an influence for a television
network.
2. Advertisers: big customers.
3. Business concentration.

4. Expensive, high-risk program structure.
5. Reality TV—shorter lead time and no real syndica-
tion.
6. Cable and satellite roles.
According to Johnson, some distribution changes have
occurred in the television business; namely, broad-
band and Internet Protocol TV (IPTV), Voice Over
Internet Protocol, Video On Demand, Satellite Surge,
and Tivo/Personal Video Recorder (PVR). Johnson also
believes multiple stakeholders exist (see Table 7), as well
as sources of pressure on TV broadcasters, as may be seen
in the Figure 5. In this context, TVI’s managers need to
consider all aspects to improve business in the future.
TVI’s managers know advertising also depends on
audience shares, wishing to keep an eye on possible
competition such as growth of cable penetration in
Portugal. According to Aris and Bughin (2005)
Growth opportunities in TVI’s current free-to-air business
are limited. Its markets share is under threat due to
increasing audience fragmentation, partly due to new
digital media platforms. Portuguese cable11 penetration
has been growing, especially in affluent cities and, in
the long run, digital terrestrial television (DTT) may also
be a threat. So far, DTT licences granted some few years
ago have been annulled due to breach of commitment by
the licensees. In addition, RTP is increasingly becoming a
real competitor, after the changes occurred in the public
broadcasting concept. The future role of SIC (private tele-
vision competitor) is also still unknown. Therefore, TVI
will have to address certain issues proactively in the
future. (p. 244)

Table 7. Outdoor—Main Indicators in Millions of Euros
2003 2004 2005 2006 �%
Advertising
revenues
15�1 19�30 16�53 16�88 9%
Other operational
revenues
0�03 0�03 0�06 0�52 1,840%
Total revenues 15�54 19�33 16�59 17�40 12%
Total operational
costs
13�90 15�78 15�07 15�63 12%
EBITDA 1�50 3�40 1�51 1�77 18%
tions.
Advertisers - ROI
- Targeting women aged 18–49.
- Premium time for shows focused on the 18–34 group and with
high ratings
Government - Seeking control and regulation of shows

Viewers - “Good programs”
Investors - ROI
Figure 5. Multiple stakeholders and pressure on TV
broadcasters. Note. Source: Johnson (2006).
160 Faustino
According to Vogel (2004)
Assuch,thegreatcash-flowandwealth-generatingmachine
that is cable inexorably attracted the attention of major
participants in telcos, as they are called. With fibre optics
and the appropriate digital switching devices, telephone
and cable services are technologically similar� � � . Clearly,
television sets are no longer passive devices. (p. 286)
In Portugal, cable companies offer basic packages
with over 40 channels but also additional, selective,
subscription-based exclusive contents (e.g., almost exclu-
sive access to first league football broadcasting). In this
context, Ribeiro (2007) mentioned that the next few years
will be characterized by important transformations, as
well as the emergence of new challenges for television
market players whether carriers, paid television chan-
nels, contents providers, or final consumers.
Although TVI’s competitors have already diversified
to themed TV and operate in several cable channels, TVI
offers only a seasonal subscription channel during “Big
Brother” episodes (24 hr per day and 7 days per week).
It should be mentioned that TVI’s future will also need
to take into account the fact that the cable television

market in Portugal may suffer major changes due to left
off the take over public bid launched by Sonaecom on
Portugal Telecom and PT Multimédia, the company that
holds cable channels. The Sonaecom Group, with pres-
ences in mobile telecommunications (through Optimus)
and ground communications (with Novis), as well as
in the media (through Público and Rádio Nova), has also
been showing an interest in investing in the audiovisual
segment, currently in the test stage for an IPTV offer
called Smart Tv. IPTV describes a system where a digital
television service is delivered using the Internet Protocol
over a network infrastructure of Internet channels.12
In the end of the first half of 2007, Portugal Telecom,
through its subholding, also launched an IPTV service
using the brand “Meo.” According to Griffiths (2003),
“with digital technologies, there is little distinction
between the way television signals and other data
are transmitted” (p. 18). This means that the differ-
ence between television contents and other contents is
starting to fade. In this market context, some opportuni-
ties and threats exist for Media Capital. Figure 6 enables
us, through summary SWOT analysis, to identify factors
that will influence the success of the MCG, particularly
TVI. In this context, this operator will also face some
important future challenges; namely, the following:
1. How to access the new platforms? The Portuguese
government will reopen the public tender for
attribution of DTT13 licences by the end of
2007, with the participation of several interested
parties, including Media Capital.
2. How to enter the cable business? Media Capital
has been attempting to create cable channels;
however, this intention has been barred by the

main infrastructure holder, TV Cabo, which has
a privileged relationship with a Media Capital
competitor, SIC.
3. How to maintain leadership? SIC has been restruc-
turing and improving its performance. On its side,
the public channel (RTP) started orienting toward
the market since 2003, developing a management
strategy focused on profitability.
Similar to other television operators, TVI will face a
market essentially characterized by (a) slow economy,
translated into residual growth for the advertising
market; and (b) competition within the TV market,
Threats
• Difficult macro-economic situation in the country
• Possibility of another private channel
• Migration to Internet and substitute technologies
• Increased competition and offer
• Increased contents and advertising regulation
Opportunities
• New types of programs that have not been covered
• Bet on new technologies and Internet contents
• Bet on cable television and digital terrestrial television
• Contents internationalisation impelled by the Prisa Group

• Emergence of a favourable context to online publications
Weaknesses Strengths
• Prime-time programs at saturation point
• Difficulty to gain morning and afternoon audiences
• Absence of paid theme channels in cable
• Absence of reference information in press
• Weak relationship with the telecommunications business
• Consistent leadership in the last two years
• National production as a differentiating factor
• Leadership in TV advertising
• Synergies between the various group companies
• Good management and relations with the financial market
Figure 6. Independent Television—Media Capital SWOT
analysis.
increasing with the emergence of new offers, supported
by new technologies. In this sense, Media Capital’s
growth in television activity and profitability will not
only involve an increase in TVI revenues, but mostly

activity diversification through new contents transmis-
sion platforms (cable, DTT, IPTV, etc), as well as develop-
ment of new synergies between the various businesses
and rational cost management. In this context, Media
Capital’s growth strategy will entail (a) structural growth
for existing businesses, (b) operational costs optimisation
and efficiency, and (c) adopting of the best program and
management practices.
In conclusion, the MCG will need to define its content
flows in the future by developing a set of new business
areas: the launching of new theme channels after estab-
lishing a deal with TV Cabo, TVI migration to a digital
platform (an area in which Media Capital considers
opportunities exist for new information channels),
exploitation of new multimedia products—SMS services,
teletext and IVR—creation of a TV-shopping business, sale
of contents and services to ADSL service providers, devel-
opment of businesses around musical products and video
contents from Media Capital, exporting of series and
soap operas, and the launch of TVI International14 are
measures leading to future growth.
Notes
1. http://www.ics.pt/index.php?op=cont& lang=pt& Pid=78&
area=330, retrieved May 16, 2007.
2. The first acquisition represented 30% (1998); the remaining
capital (70%) was acquired the following year.
3. However, this weekly newspaper already existed before
the Media Capital Group was formed, within the scope of
Sociedade de Comunicação Independente (SOCI), founded
in 1988. In this sense, it may be affirmed that Media Capital
emerged as a consequence of SOCI’s development.

4. Theseshareholderstructurealterationsalsoledtosignificant
management team changes, namely the exit of the Media
Capitalfounder(MiguelPaisdeAmaral)andtheappointment
of a new president: Pina Moura, former Economy Minister,
in the XV Constitutional Government. On its hand, Manuel
Polanco (son of the Prisa Group founder, Jesus Polanco) was
appointed the man responsible for managing this Spanish
media group’s participations in Portugal.
5. Prisa Group becomes the main shareholder of the Media
Capital Group, which the group announced on November
8, 2005 (http://www.mediacapital.pt/flash/PR-Prisa_Vertix-
081105.pdf).
6. According to a decision by the Media Capital board of direc-
tors, this business area was considered as non-strategic for
the group. In this sense, Media Capital Outdoors is under-
going negotiations to sell the corresponding assets. This
intention was divulged in a communication sent to the
Securities Market Commission (Comiss˜o do Mercado de
Valores Mobili´rios) on July 13, 2007.
7. Media Capital is the second largest outdoor advertising
group in Portugal, having achieved a turnover of 17.4
million euros last year, which represents 7.5% of the total
230 million euros obtained in 2006. However, as already
mentioned, negotiations are under way to sell this business
unit, which is considered as non-strategic.
8. Percentage relative to time occupied in program grid.
9. Although, as already mentioned, this group has been
decreasing its investment in the press segment, partic-
ularly generalist and economic press segments where it
already had a relevant position through Diário Económico and

Semanário Económico. These assets were acquired by Recoletos
in 2002. The only investment Media Capital currently made
within this segment, characterized by a dynamic attitude,
corresponds to free daily newspaper Metro.
10. For example, RTP1 (Radio and Television of Portugal) was
surpassed by Sociedade Independente de Comunicação
(SIC) in 1995, after having been the leading channel in
Portugal for 10 consecutive years. On its turn, SIC was
surpassed by Independent Television (TVI) when its leading
position appeared to be consolidated and guaranteed for
many years to come. RTP1 has been recovering well in this
audience war, and SIC will naturally wish to recover the
position it held for so long. TVI will need to remain atten-
tive, continue to provide the audience with what it wants,
and creating needs such as what happened with reality
shows that had not existed until “Big Brother.”
11. Currently, about 70% of all households in Portugal are
cabled, of which 44% subscribe to a cable service. Market
leader with around 85% share is TV Cabo, a subsidiary of
Portugal Telecom, the Portuguese incumbent.
12. In addition to the aforementioned operators, other compa-
nies also offer Internet Protocol Television services: TV
Cabo, Cabo Visão, and Art Telecom.
13. This tender had previously occurred. A public tender was
opened in 2001 for attribution of the license granted to
PTDP (consortium formed by the Pereira Coutinho Group,
Sociedade Independente de Comunicação, and Radio and
Television of Portugal), although under protest by another
consortium: Media Capital/ONI. This license was revoked
(in March of 2003) due to contract breach by PTDP
regarding the platform launch date, whereby the consor-
tium invoked technological problems and unfavorable

macroeconomic conditions.
14. Account reports of the Media Capital Group
from 2002 and 2003 and institutional Web site,
http://www.mediacapital.pt (February and November of
2005).
References
Aris, A., & Bughin, J. (2005). Managing media companies.
London:
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tele-
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Coleman, H. (1978). Case studies in broadcast management.
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York: Hastings House.
Desmoulins, N. (2004). L’ economie des média. Paris: Puf.
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Freire A. (2004). Estratégia sucesso em Portugal. Lisboa,
Portugal:
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Griffiths, A. (2003). Digital televison strategies: Business
challenges and
opportunities. London: Palgrave Macmillan.
Johnson, G. (2006). U.S. broadcasting: From intertwined growth

to
mature oligopoly to fragmentation. Unpublished manuscript,
Andersen School of Management, University of California at
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Laverón, M. (2005). Estructura y gestión de empresas
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