Viacom Executive Discusses Southern Europe Growth Businesses

Photo by Joel Ryan/Invision/AP
Milan will in 2015 host the MTV EMAs, whose 2014 edition in Glasgow featured Ariana Grande

The Paramount Channel in Spain and France and MTV Italy have done well for the company, and improving economies also help

Southern Europe has shown signs of improved economic and advertising sales trends in 2014, and some TV network owners from the region have mentioned better momentum over the past year.

But one particularly bullish comment about Southern Europe came from Viacom president and CEO Philippe Dauman in August. "MTV Italy continues to be a great story for us," he told an earnings conference call then, before adding: "We launched the Paramount Channel in Spain two years ago, and it has since grown to become the most-watched network in our international portfolio."

Viacom has company-specific reasons that have made Southern Europe a ‎success story for it, beyond general economic trends. As managing director, South Europe, Africa and Middle East for Viacom International Media Networks, Raffaele Annecchino has worked with his team on strengthening such key markets as Italy, Spain and France.

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While analysts have focused much attention this year on Viacom’s acquisition of U.K. broadcaster Channel 5, Southern Europe had some key success stories for the entertainment giant. Why? "There are a number of reasons," Annecchino told The Hollywood Reporter in a recent interview. "The economies have improved, which is helping us. We have been investing in enlarging our portfolio, such as the Paramount Channel in Spain, new channel launches and content. We also invest a lot in our portfolio of products in digital.” And the company is also pushing into consumer products.

Viacom doesn't break out revenue or profitability for specific markets, but it has invested in the region to take advantage of its upside potential.

In Italy, the company bought out its joint venture partner in 2013 to give it the full benefit of upside and full control of its destiny in the market. "We decided to acquire, as soon as it was legally possible, 100 percent of MTV Italia from Telecom Italia Media," said Annecchino. Viacom previously owned 49 percent and now controls the business and gets its financial benefits. Unlike in other markets, MTV Italy is not a pay TV network but a free-to-air channel.

"We can now lead and drive our future strategy for the next few years," the executive added. "Since the acquisition, our total [viewing] share has grown 13.5 percent [in the fiscal year ended in September]. And viewership in the target core audience was up 25 percent.”

The MTV brand in particular saw a viewer increase of 24 percent in the 4-plus age group and 38 percent in the core commercial target 15-34 demo. And MTV Music, which is on free-to-air as well, saw an increase of 40 percent in the 15-34 demo, becoming the leader in the free-to-air music space in Italy, according to the company.

“How did we do it? It was the combination of local and global, our glocal strategy,” said Annecchino. “We have original content from our international networks, such as Jersey Shore and Awkward, in combination with strong local commissioning, such as [gymnastics doc reality show] Ginnaste and Il Testimone (The Witness) [which puts stories, events and people otherwise overlooked into the spotlight]."

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Pay TV network Comedy Central, meanwhile, posted a 12 percent viewership gain in Italy in the fiscal year in its target 25-54 demo, despite strong competition.

Annecchino also touted Viacom's strength in digital and social media, in Italy and beyond. "We use our social media and our technology to contact our viewers every day and drive them to the channels," he said. "Including all our platforms, which are digital, Web applications, social, and of course the TV channels, we have more than 40 million contacts per month in Italy.”

Driving this number of touch points were 2.4 million monthly unique visitors for MTV Italy’s mtv.it site; 2.3 million followers on social media, particularly Facebook; and the MTV app, which reached 1.5 million downloads during the latest fiscal year.

With Italy doing so well, Annecchino also sees signs of follow-on benefits.‎ "The MTV EMAs 2015 we will have in Milan," he said. "It is important news that shows that Italy is a key market."

In Spain, one of Viacom's big success stories has been the free-to-air Paramount Channel. "We launched the Paramount Channel two years ago, in the middle of the worst post-war [economic] crisis of Spain. The channel is one of the most successful channels in Spain today," said Annecchino. "We set a record with 2.2 percent share in the 4-plus demo in August."

He added: "We launched a channel in a market that two years ago was challenged, and now it is one of the best growing markets. The economy is coming back. We had an average of nearly 135,000 people in August."

The figures represent more than 50 percent growth over the previous year, which delivered a peak primetime performance on Aug. 21 during the movie Black Snake Moan, when the network hit a 4.3 percent share and 574,806 viewers. The network's best day was Aug. 3, when it had an average share of 3.6 percent.

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Why has the Paramount Channel resonated with viewers? "It is a modern movie channel," said Annecchino. "It has an app. We invite an actor to watch one of their movies live and interact via the application with viewers. Javier Bardem did it, for example."

His team had the first Paramount Channel in Spain, but Viacom has since started rolling it out to other countries, including in France, another of Annecchino's markets.‎ How has it done in France? "We are celebrating the first year," he said. "We were the number-one movie channel in the 25-49 [demo]. We are really, really happy.‎"

The network has reached more than five million viewers per month, including nearly two million in the 25-49 demo.

France has also been a focus for Annecchino and his team in other areas. In November, the company launched its 18th network in the country, saying it offers more pay TV channels than any other international media company in France. Nickelodeon 4Teen is modeled after U.S. network TeenNick, dedicated to Nickelodeon programming targeting girls 7-14.

“In France today, we are the international media company with the largest number of channels,” Annecchino told THR. “We started investing in France many years ago, but the last six, seven years we have progressed with MTV and Nickelodeon. We also acquired a games channel, Game One, and we have added new brands, such as My Nick Jr. We can compete face-to-face with Disney.”

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Why has growing the portfolio of channels been important? “We provide our [pay TV partners] with all audiences, from young viewers to kids, music and adults…. The reason for our success in France is we provide customers and partners the widest portfolio of brands and have adapted our content to new technologies.”

Annecchino also sees further upside in France: “Our scale is helping us, and the fact that the economy is recovering. It allows us to grow more than others.”

Email: Georg.Szalai@THR.com
Twitter: @georgszalai

 

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