MTV
Presented to John Oliver By Yu-Ju Lee MAAMC Marketing and Branding Strategy Dec. 12, 2008 Word count: 4896
Introduction MTV: The Past, Present and Future Launched on August 1981, MTV (Music Television) was the first music cable channel to dominate the music TV channel for almost twenty-five years and has a good reputation in making good-quality programs. Evolving with the changing society and the trend of technology throughout these years, MTV has attempted to adjust its direction and to keep up with the rapid change in the society and technology. There are two main phases in the development of MTV, with the rise of the internet being the essential factor in MTV’s shift from the first phase to the second.
In the first stage, MTV focused on the diversification of programs and channels and also decentralizing the market to manage regional MTV with typically local features. MTV not only offered well-produced programs from music-based programming to lifestyle programs but also launched different channels to cater to specific target groups. For instance, reality show and “MTV unplugged” were the most popular programs at that time. Besides, exclusive brocading of famous stars’ music video, unique acoustic concerts and the annually classic MTV music awards all penetrated to the adolescent’s lives and became part of the pop-culture. Further, MTV vigorously attempted to expand their market globally and localize regional MTV in order to
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develop stronger bonds with its local audiences. In this stage, MTV held enormous leverage in society and culture. Keeping its young and fresh image with the pulse of society, MTV retained its target audiences from age12 to 24.
However, the development of the internet propagated the online media, and this has altered the prospect of traditional media. MTV faced the crisis to compete with other forerunners in online media such as YouTube and i-tune. In order not to lose their dominance in the music media and their target audience, MTV adopted three methods to extend into the internet media and reach their target consumers: to purchase, merge or to collaborate with other mobile or internet media companies. For instance, MTV Urge, MTV Flux, MTV Overdrive, Neopets, Y2M and Atom all target different audiences and perform distinct functions. Yet, MTV had experienced a major failure in purchasing an influential online media, MySpace, which is a multiple sharing platform with more than 100 million audiences. Some analysts said that this failure in bidding for MySpace was a serious setback for MTV because they lost a wonderful chance to draw many young audiences and penetrate into online media market (MTV case study). In addition to confronting the rapid change and development in the internet, MTV still has a lot of hurdles ahead to be overcome. For instance, the uncontrollable consumers are always the big challenge for a brand. The consumers’
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behaviors and thinking nowadays are difficult to harness. However, in a customized-centric era nowadays, the way consumers perceive and use the media can deicide the future of the media. The question is, therefore, can MTV foresee what consumers want in consuming media and cleverly integrate their brand experiences to adapt to the digital age? Or will they be trapped in the turbulent and digital world with the wrong application of strategy? This essay will first undertake an analysis of the macro and micro environment for MTV, and after that analyze MTV brand to discuss its relationship with today’s world. Based on this analysis, a future branding strategy will be recommended.
Macro Environment The reason a brand can be successful in the long term lies in its understanding of the need to adapt to any developments in the environment (Franzen 2006). This shows how significant it is for a brand to observe and analyze the macro environments and adopt positive and useful methods to interact with the environment. Any uncontrollable elements outside the organization that can potentially affect the firm to achieve the expected performance can be regarded as the factors in macro environment (usually known as PESTEL). PESTEL stands for political, economic, social, technological and environmental and legal forces (Hooley et al 1998). Yet, not
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all of them are crucial in every case. Regarding the case study of MTV, social and technological environments are the top two vital factors to influence the future of the brand.
Social environments comprise what the general publics nowadays believe and value, the lifestyle they prefer or the popular culture they are in, etc (Hooley et al 1998). As for the social issues related to the development of MTV, the most influential one is consumers’ changing attitudes toward TV. Modern consumers prefer to watch digital TV than watch traditional TV. Moreover, due to the convenience, freedom and diversity provided by online media, online users can enjoy the visual and acoustic entertainments in the internet and decide the time and frequency thy used. Thus, online media offers a consumer-centered environment for the consumers which is also an appealing element to draw the main users, the youths, to use online media. Without the boundary of time and location in the internet, online users can freely choose to watch their favorite programs online.
A second social factor is consumers’ changing attitudes towards consuming music. With the overflow of sharing music online, the public can easily download music from the internet for free even it is illegal. However, consumers deem that many
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people download illegally, so it is not inappropriate to follow the crowds. Moreover, to buy a CD may be too expensive for consumers in the economic recession time, so they choose to consume music for free rather than purchasing a CD in the shops. The attitudes they hold towards music today is that music is a kind of indispensable entertainment deeply connected to people’s life but not worth spending money on. Thus, it implies that the essential and intangible value of music still exists in consumers’ minds but the substantial and countable value of music shrinks or disappears because customers can easily access the music for free through diverse channels.
A third social factor is the changing of the ways people socialize especially for the youth. Young people used to build their social lives or broaden their social groups through the internet. High registrations on MSN, Skype, MySpace or facebook verify the high rating in usage and how significant these online platforms are for consumers in their daily lives. To be a member in these online platforms seems to be a global uniformity for people all around the world, revealing their own identity and address on the network. When young people want to make friends, they tend to ask for others’ MSN or Skype accounts instead of asking for their phone numbers or addresses. Thus, the intense social connections online proves how these online media pierce into
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youngsters’ lives and form a culture trend in the society.
These three social factors which could have an impact on the future of MTV brand are related to one influential and rapid development in technology: the internet. The internet not only changes how people use media, consume music and socialize but also initiates the prosperity of the online media market and impairs the conventional media market. There is strong competition in online media. The dominant online media are eager to expand their market, and the traditional media plans to shift to digital era in order to sustain their target audience. Along with the prosperity of internet, internet-accessed mobile phones permeate more and further intensify the power of internet. Mobile TV, which means watching TV through mobile phones, also becomes more prevalent with the trend. Therefore, the internet is sweeping the media market just like a huge typhoon with striking force, and MTV seems to be in the typhoon eye that attempts to confront the rigorous and turbulent tests ahead with shrewd perception and outlook. Having considered the external macro forces influencing MTV, the internal forces will now be examined.
Micro Environment Some groups which can directly affect the organization reaching their objectives are
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customers, competitors, channel members, partners, suppliers and employees (Wood 2003). These constitute the micro environments. In order to realize a competitive advantage for a brand to enter into a particular industry, a competitiveness analysis tool such as Porter’s (1980 cited Wood 2003) five forces framework (see appendix 1) is needed to better understand the customers, the suppliers and the other related organizations with whom they may be competing. But before probing into the factors which decide the competitive environment in the industry, the industry the brand aimed at entering into should be defined first. MTV as an international brand attempts to undertake a smooth transition from a primary music television cable channel to a multiple platform that provides music entertainment on both online and offline media. The industry they have targeted to penetrate is defined as the global multi-platform music and entertainment industry.
Next, Porter’s five forces framework will be adapted for MTV (see figure 1) to analyze the competitive environment MTV confronts. In this industry, buyers, as customers who consume the music entertainments, have more bargaining power and can drive where the market goes because customers nowadays can choose their customized media. Thus, their bargaining power is high. In the contrast, suppliers, as independent artists or the music companies, have lower power to influence the market
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because they need to pay multiple media platforms to broadcast their works. Besides, if a competitor is ambitious to enter into a global multi-platform music and entertainment industry, they must invest and spend a lot in order to distribute their online and offline media platforms globally. Thus, although it is not hard to obtain the skills to manage the online or offline media, the cost of entry in multiple global media is quite high. Overall, the threat of potential entrants is medium. In terms of the threat of the substitutes, since the definition of entertainment is broad and not limited to only listening to music, any other leisure activity, such as seeing a movie or reading can make people feel entertained and relieved. Therefore, the threat of substitutes is high. To sum up, Porter’s five forces framework reveals that the competitive rivalry in global multi-platform music and entertainment industry is high. Any companies that can provide good services to entertain the consumers and satisfy the consumes’ recreational demand can be considered as one of MTV’s rivals.
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Based on the analysis above, it can be seen that MTV is in a highly competitive industry. Yet, if MTV wants to hold a dominant position in this industry, the understanding of the brand competitive advantage is crucial. From analyzing the strengths and weaknesses of MTV and the existing resources they own (the distribution of their media at present), the internal problems of MTV are clarified.
The most influential strength for MTV is its brand experiences. As an international brand for over 25 years, MTV is well-known for producing various kinds of good-quality programs, having a close relationship with the music industry and symbolizing a pop culture icon in the society. However, the most significant weakness 9
is linked to its strengths: MTV, a long-lasting brand, is too stable to swiftly shift it into a brand which can satisfy the consumers’ needs in the internet era. The truth is that what has happened in the internet has been fast and volatile. However, MTV is a bottom-up structure company which means they distribute diverse power on the sub-divisions and unify different opinions from the sub-division in order to achieve the consensus (lecture handout). So it is time-consuming and slow to make a decisive decision for a company with bottom-up structure. For such a company in the rapidly-changing media industry, such as MTV, it is a challenging feat to adapt to the digital age in a short time. Besides, the bottom-up structure also leads to the decentralization of MTV and a loss of its central corporate identity. The localization of regional MTV is a good example of this. Furthermore, the reason MTV can not successfully transfer into an online media and hold a stable position in this market is connected with the failure to bid for a renowned online media firm, MySpace in 2005. As a result, MTV had to adopt a diverse market segmentation strategy in order to strengthen the distribution of platforms and maintain their target audiences.
The Boston Matrix (Henderson 1970 cited Johnson et al 2005, see appendix 2) is a model to assess the balance of the brand portfolios, which is also a market analysis for a brand. With two dimensions, market growth and market share, the model illustrates
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four stages of product life cycle and associates cost and strategy within different stages. Below, the Matrix has been adapted for MTV (see figure 2).
The product in the first phase, the launching or introductory phase, is called problem child to depict a launching product in a rapidly-growing industry which need to invest a lot to be noticed and promoted but the return on investment is low. MTV’s sub-brands such as Atom, Y2M, MTV Overdrive and MTV Urge are categorized in this phase because all these products belong to the high market growth area, digital media industry, but these products were just launched in this market so the market share is low. However, a problem child has the potential to gain market share and
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become a star in the second phase, growing phrase. Stars are products with a high market share in a fast-changing industry though extra investment is needed in order to sustain the growth and to maintain the market leadership. For instance, two of MTV online media, MTV Flux and Neopets, are stars which can distinguish their products with the competitors through joint-venture cooperation (collaborate with mobile firms) or selected target segmentation (focus on children or young adults) to hold a high market share in the online media industry. Yet, if the market growth slows down, stars will become the cash cows if they are still the leaders in their market category. With a high market share in a slowly-growing industry, cash cows are the products in the stable and mature phase to gain the profit to maintain the business in a company. MTV cable channel which contributed 85% to the profits in the parent company, Viacom, is a cash cow in the low-growth traditional media industry. Thus, based on the Boston Matrix, it is obvious to see that MTV has a balanced portfolio which manages sufficient amount of problem children and stars that can be the potential products in making the money in the future. In addition, MTV maintains a cash cow to generate cash to sustain the company. In accordance with the analysis of the forces for the micro environment, the opportunities and threats for MTV will be demonstrated next with the consideration of the influential factors in the macro environments.
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Micro and Macro Environments: opportunity and threat The opportunities for MTV to extend their market and hold their brand leverage are based on to what extent MTV can shift their strength, brand experiences to the online media. To merge with the internet giant, Yahoo, or to begin the partnership with the other online dominants, is the fastest way to penetrate into online media (MTV case study). Probably, to digitalize popular programs in MTV such as reality shows or hold online MTV concert to attract the audience is another choice to extend MTV power. However, the threats to MTV are manifold and uncontrollable. From internal perspective, localization of MTV made MTV lose the unifying brand image worldwide. In terms of external perspective, the decline of traditional TV and the rapid rise and strong competition in online media put MTV in a dilemma: MTV lost majority of offline audience and had difficulty in smoothly shifting into digital media. Furthermore, the fickle and unpredictable consumers in the 21st century make MTV face more unknown challenges in order to be a leader in the global multi-platform music and entertainment industry.
Dynamics of environment Regarding predicting the future changes or contriving future strategies, the turbulence in the strategic environment for an organization will decide how practical the
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environmental analysis is (Lynch 2006). The strategic environment for MTV is classified as high turbulence level due to the high complication and rapid change in the environment so it is changeable, unpredictable and unforeseeable. The development of MTV products should follow the rapid change of technology and consumer behaviours in order to keep its connection with the world. However, MTV is considered to be in the stage of flux in the strategic drift (Johnson et al 2005, see appendix 3), suffering from its delay to respond to the change in technology and shift into digital age. Thus, it is better for MTV to adopt emergent strategy under this situation because this strategy is reckoned as a learning process which is highly flexible to adapt to the environmental change and learn the experiences from the errors every time. Through tests and mistakes, the emergent strategy has evolved time after time (Lynch 2006). However, is this emergent strategy beneficial to the brand identity for MTV? Next, the connection between the MTV brand and today’s world will be explored.
MTV brand According to Kapferer (2004), brand identity prism (see appendix 4) is to assist understanding of the conception of brand identity, including uniqueness, aims, visions, values and personality and to position the brand better to accomplish the competitive
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advantage. From external and internal facets, the core brand value should be consistently appreciated and valued by the staff in the company and the customers (Fill 2002). Below, brand identity prism has been adapted for MTV (see figure 3) to analyze how consumers perceive MTV (the physique, relationship and reflection they sense toward MTV) and how the staff in MTV perceive MTV (the personality, culture and self-image MTV holds to communicate with the consumers) and verify the core brand value of MTV. The six elements used to analyze and determine the brand identity of MTV will be defined first: physique, personality, relationship, culture, reflection, and self-image.
Physique is physical appearance of a brand like brand prototype that describes what the brand is, what it does and how it looks like. Personality is the inner features of a brand which is considered as brand characteristics with the help to communicate its goods to the target audiences. Relationship is how a brand interacts with the consumers through transactions or providing the services which is especially obvious in the services or retail companies. Culture is the core value of the brand which represents its central, distinctive and powerful features that differentiate the brand with other competitors. Reflection is how the consumers imagine or reflect themselves when consuming the goods of the brand and self-image is the features 15
which consumers identify themselves and would like to be reflected by using the products (Kapferer 2004).
To apply these definitions of six elements in the brand identity prism to MTV, MTV can be interpreted as what is shown on figure 3. In terms of the consumers’ aspects, MTV is regarded as the music cable TV which offers the entertainment to the audience and made the audiences feel energetic, youthful and delighted after watching their programs. However, although MTV manifested to maintain the young, fresh and progressive features in order to deliver the trendy image to the target audience aged from12 to 24, the target audience didn’t sense this trendy and cutting-edge image toward MTV. Instead, they forsook MTV and turned to be the users of other online media so MTV lost many young audiences and couldn’t keep up with the trend of digital media to be the leader in the online media. Besides, even though entertainment is the core value in MTV, MTV can’t maintain a clear and unifying global brand identity in music entertainment industry. MTV is decentralized in order to fit into the culture in different countries and build a deeper connection with the local audiences (MTV case study). Thus, people worldwide project MTV culture in different ways on the basis of their own experiences to interact with the regional MTV brand.
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According to these analyses of brand identity for MTV, it is apparent that entertainment is the bridge MTV builds with today’s world. MTV provides various kinds of entertainments from the primary broadcasting of popular music videos to diverse programs focused on lifestyle information, interviews, or documentaries, etc (MTV case study). However, there are too many kinds of entertainments for youngsters to choose and consume in addition to watching MTV programs at home. Furthermore, if young people are eager to watch their favorite artists’ latest MV, they
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can key in the name of this song on YouTube to search for related videos instead of sticking to MTV programs to wait for the MV. Thus, if MTV only offers general entertainments, it is hard to justify how MTV really means or represents in today’s world and gradually MTV will lose the real connection to its target audiences. Yet, MTV had been the cultural icon several years ago in the light of young and refreshing image but why MTV lose its meaning to its consumers nowadays? First, diverse and consumer-centric online media replace the functions of MTV such as i-tune and YouTube; consumers can experience multiple choices of entertainments freely on these online media platform. MTV failed to predict how consumers consume entertainments. Second, the major consumers of entertainments are youth so the brand in the entertainment industry should be more sensitive to the trend of the popular culture, fashion and social values than consumers themselves. To maintain the young and trendy image is the indispensable requirement for MTV to attract their target audiences, youngsters. However, how to really interact with these youngsters to deliver these brand characteristics and let them identify MTV as a young and progressive brand which is vividly living in part of their lives is a key issue to connect MTV to the consumers nowadays. Finally, every global brand has an internationally distinctive brand culture which can adapt to each region but the brand culture for MTV is regionally diverse. Besides, some sub-products of MTV are incoherent with
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the original MTV cable such as Neopets and Atom, it is difficult for consumers to identify them as part of MTV’s products from the naming or contents of the channels. The vague brand identity of the products in MTV and the indistinct brand culture of global MTV lead MTV to lose the bright and identical brand identity all over the world. Therefore, if MTV brand wants to have a closer relationship with the world today, ensuring the young image along with the consumes’ perception is very crucial but to be more interactive with the audiences or to be more innovative to create or guide the pop culture and become a cultural icon is more significant. Through altering consumers’ perception toward the entertainments MTV provided from simply good-quality music or programs to the culturally meaningful programs which correspond to people’s values and beliefs nowadays, MTV can have a clear brand position or competitive advantage to vie with the other competitors in online or offline media. Further, to devise a globally recognizable and identical brand identity for MTV and integrate all their sub-brands to follow this brand identity will centralize the resources of MTV, maximize their brand power and have more links to the world.
Recommendation: a future brand strategy for MTV According to Cowking and Hankinson (1996, p.3), a global brand is defined as the
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brand “offers consumers across the world, a consistent (i.e. standardized) proposition and the same product formulation.� Based on this definition, it is clear to see that MTV is not a global brand although it a brand available globally. The localization of MTV makes MTV communicate different messages with people worldwide but there is still a definitely strong strength for MTV- its brand recognition and reputation. Almost people all around the world heard about MTV and could identify MTV as a music TV channel. Thus, if MTV longs for penetrating into online media, the leverage of MTV brand can benefit its sub-brands to go into the market more smoothly. Additionally, MTV can extend its good brand reputation to build a single and unified global brand identity in order to develop a stronger tie to the global consumers and the regional MTV can maintain their local culture and features based on this global brand identity. Therefore, an umbrella brand will be utilized to help MTV achieve the unified global brand identity in its online and offline media.
An umbrella brand is a brand that covers series of sub-brands which are more or less related and converges these sub-brands into one voice but simultaneously these sub-brands still can preoccupy on its sub-conversation in specific target markets through different communication channels and promotional mix (Anon 2003, Joiner
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2007). The most principal advantages of umbrella brand are to boost a new, nameless or flagging product brand with the reputation and leverage of corporate brand and maintain the brand consistency and longevity for a long time (Anon 2003). Yet, the disadvantages of the umbrella brand are just the other side of its strengths: if one of these product brands suffers from some scandals or negative news unfortunately, the corporate brand will be affected by the association with them. Furthermore, new product brands are hard to be noticed under the primary communication of one clear message in umbrella brand. However, in the case of MTV, to announce and convey a unified message to global consumers is very significant at this moment because it will be helpful for people to identify, trust and interact with MTV brand more. Especially when MTV wants to stretch their leverage to online media which is a new media could be used and reached by worldwide people in the 21st century, global brand identity is more vital in the boundless internet world. Thus, a distinct and consistent global brand identity for MTV is necessary and significant to reinforce its brand leverage nowadays.
Because the primary consumers of entertainment especially popular music are young people aged from 12 to 24 and most of online users are between these ages, the target
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audience of MTV basically will maintain the same as what MTV set originally. However, MTV brand is positioned as a culture icon for young people worldwide stating their inner voices, reflecting their attitudes, and living with them along with the change of trend in every second in the global village. Based on this brand positioning, MTV WoW is devised to be the unified message to communicate MTV’s global brand identity. There are two reasons to justify that it is the appropriate communication message for MTV to deliver globally. Firstly, WoW is like young people’s habitual expletive to express their surprise, amazement and fancy when they see something fabulous. Similar to what they perceive and project to MTV, MTV brings them sparkling, magical and resonant feelings and offers them “WoW” experiences. Secondly, WoW can be interpreted as “Wireless of World” to demonstrate MTV’s goal to penetrate the online media and to be a “wireless” global music entertainment brand. Therefore, all sub-brands of MTV will follow this global brand identity, “MTV WoW”, to adjust their names slightly. For instance, MTV Urge will be renamed as MTV WoW-Urge and Atom will be shifted to MTV WoW-Atom in order to be more recognizable as the sub-brands under MTV.
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Besides, in order to promulgate MTV’s global brand identity, “MTV WoW” ,to make it become an identical global symbol for MTV, an online campaign called “MTV, WoW your voice” will be launched to execute the influential and symbolic shifting of MTV brand. An independent official website will be designed for this online campaign and be linked to every MTV related sub-brand website. Through expressing any thoughts about what you think you relate to MTV (any formers experiences or impressions you had about MTV) in this online campaign, the participants can have the chances to attend “Wow MTV concert” which is also held to celebrate MTV’s change in branding this time. The iconic super stars that had the unique relationship with MTV in the former time like Michael Jackson and Madonna will join in this concert with some popular singers worldwide nowadays such as Jack Johnson, U2 and so on to state the belief “Music forever and MTV forever”-whatever how the world changes, MTV will evolve with the music and always stay with all audience. Besides, this concert will air live on MTV WoW cable channels worldwide and on MTV WoW-Flux so all online or offline audiences can take part in this activity simultaneously and online audiences can share their opinions with other online users during the concert. The promotional mix to promote these series of “MTV WoW” activities including online campaign, “MTV, WoW your voice” and “MTV WoW concert” will focus mainly on online marketing like online advertising, key-word
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buying and affiliate networking and the primary advertising on TV will be specified to launch only on MTV cable channels all over the world.
Through this integration of MTV brand to achieve a unified global brand identity, “MTV WoW”, the consistency between MTV’s sub-brands and MTV cables can be achieved. In addition, the links between online and offline media channels of MTV and the regional MTV cables will be intense due to the consistent communication of one voice. Thus, MTV WoW proves to the world their integrated capability on the multi-platform media and also articulates powerful declaration to permeate young people’s lives and build closer relationship with them.
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References
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Lynch, R. L., 2006. Corporate Strategy. 4th ed. Harlow: Financial Times Prentice Hall.
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Appendix 1: The five forces framework (by Porter 1980 Cited Wood 2003)
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Appendix 2: The Boston Matrix (by Henderson 1970 cited Johnson et al 2005)
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Appendix 3: Strategic drift (by Johnson et al 2005)
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Appendix 4: Brand identity prism (by Kapferer 2004)
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