Case Analysis on MTV's New Reality Show.
MTV. Is there any college student today who hasn’t at least heard of MTV? The cable TV icon has proved one thing over time….. it knows where the kids are. In its early years the company was found in 1981, MTV was a radical newcomer in a industry filled with conventional approaches. With it suggestive language and racy images, teens and young adults loved the edgy content and presentation. CEO and chairman Judy McGrath who has been with MTV since its inception and whose first job was writing on air promotions has overseen some significant strategic initiatives. The company pioneered reality television in 1992 with The Real World in which seven young adult strangers lived together in a house and had their lives the good, the bad, and the downright weird videotaped. MTV’s cutting edge real life programming has been, and still is, widely copied. Although ratings for the MTV channel have stagnated for years, its audience is massive. The newwork remains far and premier address for advertisers seeking to reach its coveted 18-34 year old audience. AS a subsidiary of Viacom a film production and cable television company, MTV Networks owns and operates cable networks MTV, VH1, Nickelodeon, CMT, Spike TV, and other channels, including Comedy Central, TV Land and LOGO. It also operates MTV film in conjuction with Paramount Pictures, another subsidiary of Viacom. MTV Networks continues to be the financial engine of Viacom. It accounted for 70 percent of the company’s annual revenue in 2006 and nearly all of it $1.59 billion profit. Despite its long history of knowing what an elusive and fickle audience finds interesting, McGrath must continually juggle the strategic challenges of guiding it $5 billion plus company as it looks for ways to continue its success. Her primary challenges are the company’s digital and global strategies. Pointing to the popularity of social networking sites such as MySpace and Facebook , industry analysts have critized MTV’s digital strategy, claiming that it lock on the youth culture was being threatened. And those criticisms escalated when MTV didn’t buy MySpace, which instead was acquired for $580 million by Rupert Murdoch’s company, News Corporation. However, McGrath counters those criticisms by noting MTV’s digital innovations, especially the virtual worlds it created for many of it shows. Virtual Laguana Beach was introduced in Septermber 2006 as the first of three virtual worlds that MTV debuted in an effort to recapture the audience that had migrated to MySpace and YouTube. Yet, as the media business continues to rapidly change, McGrath feels that her company is prepared. She says, The talents here. We have a plan. We’re moving.
With more than 135 channels worldwide, MTV Networks has an extensive global presences. Using a first in the market strategy that focuses on channels with broad appeal such as MTV Asia, MTV Latin America, and its latest entry, MTV Turkey, MTV is the worlds most ubiguitous TV network, reaching more than 1 billion people worldwide. Now the company is expanding in key global markets with more MTV Networks brands, like Nickelodeon, by using a range of technologies such a cable, satellite, and cell phones. Analysts caution that the key to MTV’s global strategy, however, it sticking with a winning approach that mixes universal youth sensibilities with local tastes. That way the company won’t come across as a cultural imperialist. Despite MTV’s global reach and a 20 percent a year international growth rate, the US division still accounts for 80 percent of overall revenue, which means there’s still a lot of upside potential in the global market. But McGrath and her executive team appear ready to tackle the strategic challenges of both the global and the digital media environments.
Create a Problem Statement
An Analysis of Issues
And Recommended Action
Evaluation Criteria:
• Application of Strategic Management theories and concepts need to be demonstrated in the analysis and recommendation sections.
• Depth of the analysis
• Oraganization and logic
• Quality of writing and the Comformity to case analysis guidelines