Has the MTV Generation grown up and switched off?

MTV’s audience in the US is on the slide, but Robert Bakish, president and CEO of parent company Viacom International Media Networks, says the 32 year-old network’s future growth lies in tapping into the potential of emerging markets such as the Middle East
By Shane McGinley
Sun 20 Jan 2013 09:53 AM

On August 1, 1981, at 12:01 am, US television viewers switched on their TV sets and MTV — a cultural phenomenon which would help define a generation — was unleashed into their living rooms and their lives. From Queen to Michael Jackson to Britney Spears, music fans would wait with baited breath for the latest video offering from their favourite idol, before rushing out eagerly to buy the single and plaster the poster on their bedroom wall.

The basis for many a quizmaster’s question the world over, the first video shown on MTV was The Buggles’ ‘Video Killed the Radio Star’, a choice which proclaimed to the world that radio was official dead and the visual medium was taking over.

Fast forward more than 30 years and the kids of 2013 no longer wait patiently to watch their favourite videos as they are available on demand anywhere, any time at the click of a mouse on YouTube. Music shops are now considered retro as today’s music fans can order, download and listen to their favourite tracks almost as fast as they can change the channel.

Reaching for the remote is indeed what many TV fans seem to be doing these days as Generation Y complains that the 2013, 32 year-old version of MTV no longer plays music videos and is populated by reality TV shows, dating programmes and chat shows. Has the MTV Generation grown up and moved on and has MTV passed its sell-by date?

“I think it has a shelf life,” Robert Bakish, president and CEO of parent company Viacom International Media Networks admits, as we sit in an Abu Dhabi hotel. “But it also means you evolve,” he backtracks. “Music is still a critical part of what we do, we still do videos… We do things like world exclusive previews across all our MTVs.”

The debate over the future of MTV is one that is currently being mulled in the US, especially as investors express concerns about the channel’s 31 percent year-on-year drop in primetime ratings during the 2012 autumn season.

With MTV representing 18 percent of Viacom’s advertising revenues, the ratings slump resulted in Viacom’s stock price dropping 13 percent in a matter of weeks. The disappointing performance resulted in Todd Juenger, a US analyst from Bernstein Research and one of Viacom’s harshest critics, downgrading his rating for the company from “market perform” to “underperform”.

Juenger was quoted as saying he believed some of the shows currently on air “have definitely not grabbed pop culture attention” and teenage music viewers have “plenty of alternatives to MTV.”

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Despite these claims, Viacom’s CEO Philippe Dauman moved to assure analysts in November that MTV is “not broken” and said the network was still “highly successful” among its core audience and he has “no concerns about MTV’s vitality going forward.” As evidence, Dauman said its latest show — a reality programme about dating online called ‘Catfish: The TV Show’ — was the channel’s most successful launch ever.

Viacom’s latest quarterly results show advertising across the media networks rose 5 percent in the year ended 30 September  2012, while revenue for the sector was stable and only up 1 percent to $9.194bn across the same time period.

Bakish has worked for Viacom since 1997 in a variety of roles since joining the entertainment giant, which in 2010 was the world’s fifth-largest media conglomerate after The Walt Disney Company, Comcast, Time Warner and News Corporation. His division, Viacom International Media Networks, consists of 145 TV channels in 160 countries and territories.

His promotion in 2011, from his previous position as president of MTV Networks International, is a clear sign of the company’s drive to focus on expansion into new emerging markets as its more mature US home market begins to age.

Following the launch of MTV Europe in 1987, subsequent versions were rolled out in Latin America, Asia Pacific, Africa and Russia. As the network passed its silver anniversary, MTV Arabia was launched in 2007 in conjunction with Arabian Television Network, a subsidiary of Arab Media Group, the largest media group in the United Arab Emirates. Airing on the Nilesat satellite channel, the station planned to target an audience of 190 million from its base in Dubai.

“Unfortunately, today the Middle East business is a small business,” Bakish concedes. “But if you look at the demographics here it has extraordinary potential.”

MTV Arabia was rebranded as MTV Middle East in August 2011 and, the following December, a Middle East support website was launched, which allowed viewers to request music videos, vote for artists and watch live performances. The site was available in English and Arabic and is hoping to bolster its popularity among the region’s booming youth population.

A clear example of the potential for the brand in developing markets can be seen in the network’s experience in India.

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“[MTV India] is an example where we decided to focus on it three to five years ago because we believe in its potential in terms of the number of households, GDP growth and the fact they have an established television market.

The Indian launch is a joint venture between Viacom, IndiaCast and Indian broadcaster TV18. Its regional advertising sales are handled by IndiaCast’s Dubai office and the launch was IndiaCast’s second venture in the region, having launched Hindi entertainment outlet COLORS in September 2010.

MTV India is primarily aimed at young adults aged fifteen to 34, with a collection of music programming, talk shows, fashion and style shows, Bollywood-style comedy shows and adventure shows.

“We made major investments there and today we have one of the top diversified Indian media entertainment companies in film and television. [The Middle East] market over time has similar potential,” says Bakish.

“It has some challenges in that it doesn’t have what India had at the time and that was a really established market. There are some players but the ad market is a little opaque. It is a little harder to get things going here but there is clearly an opportunity.”

The success of MTV India in its home territory eventually led to Viacom seeking to tap into the lucrative Indian expatriate market in the Middle East and in August 2012 it launched the channel across the region from a base in Dubai.

Bakish says he is eager to unlock similar potential for its English and Arabic versions in the Gulf. “We have been in the region for a while… We survived, like everyone, in the downturn but we do have a 24-hour MTV feed out of Dubai and we also syndicate programming to MBC and Nickelodeon. I am confident with attention we will figure it out.”

According to research firm Informa Telecoms & Media, there are nearly 80 million TV households in the Middle East and North Africa, while industry reports predict ad spend growth in the region is set to grow by 5.8 percent in this year. In order to be a success, Bakish says his team needs to unlock both audience ratings and advertising revenue in order to gain a greater share of the market.

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“You need both to have a sustainable presence over time. We are looking at ways to bring various formats [to the Middle East]. We would love to do local versions of other formats. We have done [US teen skills show] ‘Made’ here in the past and we’d like to do more of that. Ultimately, there is clearly a local production opportunity and the challenge is getting a model together that supports ongoing vitality of it.”

Like its regular TV viewing figures, the 2012 MTV Video Music Awards — the network’s biggest event — also suffered ratings woes and saw its audience in the US dip from 12.4 million in 2011 to just 6.1 million last year.

Despite this, Bakish believes large-scale MTV-branded events could still prove to be a catalyst to stimulate growth in emerging markets and he would be eager to leverage their marketing potential by staging a major regional awards show in the UAE.

“I would love to do a big event here,” he says energetically, but adds it is dependent on how fast the company can increase its presence in the regional television market.

“I think it would make more sense here if we had a broader, decent business base but you look at a city like Dubai or Yas Island, there is the potential to do something there, whether it is around music or fashion… We would love to do it.”

According to the Pan-Arab Research Council (PARC), advertising growth over the last year has been led by a handful of markets, including the UAE, Saudi Arabia, Kuwait and Qatar, with Saudi Arabia likely to record growth of eleven percent this year.

It is therefore no surprise that MTV India is also looking to expand into the Saudi Arabian market and tap into both a lack of competition in the sector and the presence of a largely untapped Indian expatriate population.

Anuj Gandhi, group CEO of operator IndiaCast, says while Dubai will remain the company’s main sales hub it is looking to appoint sales representatives for the kingdom.

“I don’t think it will require us to open offices but if it makes business sense of course we could have reps… Saudi is a market you could probably look at a rep… If it makes sense we will not say no,” he says.

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While Saudi Arabia may be some way off, inspiration can be taken from the statuette of a spaceman given to winners at the MTV Video Music Awards each year.

Symbolising man’s walk on the moon, the spaceman was used as inspiration for MTV’s early designs and visual icons in the 1980s. As interest in the moon has waned, so has viewing figures for MTV. However, NASA last year got a boost when it looked to Mars as the next source of inspiration and enjoyed great success. Let’s just hope MTV doesn’t have to go to a galaxy far, far away to find a new audience. MTV Mars and the Intergalactic MTV Video Awards live from the Red Planet does, however, have a nice ring to it.

Revealed: Inside the minds of Generation Y

Viacom has carried out a major global survey of what they have called the Millennials, those born from 1981 onwards. It is the first time the region has been included and features results from Egypt and Saudi Arabia.

Millennials are those born from 1981 onwards, they are a more influential segment in Middle East than in other countries. Around the world the Millennial’s average on total population is 34 percent while in the Middle East is 48 percent, almost the half of entire population.

Millennials are occasionally known as Generation Y and it is the largest generation since the Boomers — according to US Census data there are around 2.5 billion globally (out of just under 7 billion total population).

They are overwhelmingly positive, happy and optimistic about their lives right now, not being scared by the word “failure”: it’s not so much about failing but experimenting, again, seeing what sticks.

Middle East Millennials are more determined to make the most of their lives (Egypt 89 percent, Saudi Arabia 91 percent).

Millennials believe internet changes the way they think about the world more (Egypt 88 percent, Saudi Arabia 82 percent).

In Middle East Millennials are more internet addicted than in other countries: 71 percent in Egypt wish to spend less time online but he can’t (KSA 54 percent).

Fifty five percent of Middle East Millennials in Egypt would rather stay at home than go on holiday without access to the internet (KSA 39 percent). More than four in five in the Middle East stay connected wherever they are.

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