As US audiences shrink, the music entertainment network is focusing on emerging markets
With MTV’s television audience in US shrinking and parent company Viacom seeking to foster future growth to emerging markets like the Middle East, a senior executive admitted that the channel “has a shelf life”.
When MTV was launched in 1981, it was considered compulsory viewing for music fans looking to see the latest videos from their musical idols. However, competition from other mediums like YouTube and Netflix has led to a decline in the channel’s audience.
With MTV representing around 18 percent of parent company Viacom’s advertising revenues, investors have expressed concerns about the channel’s 31 percent year-on-year drop in primetime ratings during the 2012 autumn season.
Another blow came when the 2012 MTV Video Music Awards – the network’s biggest event – saw its audience in the US dip from 12.4m in 2011 to just 6.1m last year.
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”.
Robert Bakish, president and CEO of parent company Viacom International Media Networks told Arabian Business in an interview in Abu Dhabi that the network faces some challenges.
“I think it has a shelf life,” Robert Bakish, president and CEO of Viacom International Media Networks told Arabian Business in an interview in Abu Dhabi. “It also means you evolve,” he added. “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.”
Despite concerns over ratings, 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”.
Viacom’s latest quarterly results show advertising across the media networks rose 5 percent in the year ended September 30, 2012, while revenue for the sector was only up 1 percent to US$9.2bn across the same period.
Following the launch of MTV Europe in 1987, subsequent versions were rolled out in 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 190m 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.”
One option on the table in order to promote MTV’s Middle Eastern operation is the hosting of a large scale MTV-branded event in the UAE.
“I would love to do a big event here,” Bakish said, but added it was 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.”