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SERBIAMedia Market

OverviewMarch 2011

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Serbia•The global crisis has had a severe negative imact on Serbia! "tting its c"rrenc# $thedinar% "nder ress"re! ca"sing o"t"t to contract sharl# and making access toe&ternal 'nance more di(c"lt and more e&ensive) *e remain ca"tio"s abo"t therosects +or recover# in the short term! altho"gh the worst ma# be behind "s) EBR,has +orecasted -)0. /, growth in 2011)

•Television remains the dominant medi"m in Serbia! with aro&imatel# . share o+net media investments) Serbians are among the heaviest T3 viewers in E"roe with0. higher viewershi than average E"roeans $)0 ho"rs er da# vs) -)2%) This isartl# ca"sed b# the availabilit# o+ a wide variet# o+ channels thro"gh 4TA broadcast)*ith its abilit# to reach a wide range o+ the o"lation! T3 has been and will remainthe most cost5e6ective media) 7owever! growth is "nlikel# to o"tace the marketgiven the dominance T3 has in Serbia alread#) *e have 22. decline in broadcasteradvertising reven"es in 2008) At the ending o+ 2010) we meas"re -. increase inadvertising)

•4"rther a"dience +ragmentation is likel# to res"lt +rom the la"nch o+ digital channels)State broadcaster Radio Television o+ Serbia $RTS% la"nched Serbia9s 'rst digitalchannels in :ovember 200; in advance o+ the analog"e switch5o6 sched"led +or Aril2012) 7owever! the availabilit# o+ new channels on 4TA ,TT will not necessaril#+ragment the market m"ch +"rther! as cable and ,T75based a# T3 is alread# rob"st inSerbia)

•The 'nancial crisis has created additional challenges +or the T3 market) Serbia9stelecomm"nications minister has s"ggested that RTS will need the state9s hel indeveloing digital channels to not +all behind neighboring nations! whose broadcastersco"ld take a"dience share awa# +rom Serbian channels) To this end! RTS9 transmission

"nit has been s"n o6 into an indeendent coman# and the government has ledgedto s"bsidi

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Serbia

•In 2010) T3 commercial brakes have been sold rett# close to there sellingcaacit#! on the other hand in 'rst "arter o+ 2011 hasn9t shown increase in sold5o"t)

•Internet media hold romise in Serbia! b"t it will take time be+ore moreoort"nities +or advertisers emerge) At the moment! Internet still has less than2. share o+ investments C imacted b# relativel# low Internet enetration $onl#-0. o+ the o"lation is online C rimaril# the wealthier strata o+ the o"lation%and the virt"al absence o+ an Internet search marketlace) Online advertising isb# +ar e&ected to be the market9s growth driver! albeit o6 o+ low levels) *e+orecast -?. growth on average over the ne&t 've #ears) *ith an "nder5develoed online advertising sector! mobile will remain +ar behind other marketsdesite sat"rated tele5densit# levels distorted b# m"ltile SIM card ownershi)

•*e e&ect rint to grow in line with the market and maintain its share o+ totaladvertising reven"es as internet enetration remains low) As recover# ens"es!the rint market has otential to average 2. growth over the ne&t #ears) Inthe long5term! we wo"ld e&ect this share to grad"all# decline)

•4rom D"l# 1st 2010) two maor E"roean "blishing ho"ses! Ringier A)/) and A&elSringer A)/) oined +orces on Serbian market! as well as the# did in most >EEco"ntries! and +o"nded coman# named Ringier A&el Sringer Media A/ $Ringier

Aksel ringer Media A/%)

•Radio Stations B82 and Radio S are dominant la#ers! while in general radiohas maintained its share o+ advertising reven"es at aro&imatel# ?. over theast #ears) *e +orecast it to remain in this range +or the ne&t 've #ears)

•O"tdoor has lost share grad"all# b"t has the otential +or health# growth asinventor# is "graded and higher "alit# ven"es come to market)

ource: Magna global Advertising 2010 Forecast

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T3 is the main medi"m #ear b# #ear

Source: AGB

Serbia C Media Segmentation:et B"dgets $.%

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+30+!"

+23

TOTAL 30 50 65 80 95 115 175 206 161 175

+1#+21

F28.F28.

F2-.F2-.

F1G.F1G.

+1$

F?.F?.

F?.F?.

F-.F-.

+52

F11.F11.

F-0.F-0.

F-0.F-0.

Source: AGB

:et investments in 2010 increased b# ;)G.)

%22

5-0.5-0.

5-2.5-2.

51.51.

 +$&"

  F-.F-.

 F2)?.F2)?.

 F1-).F1-).

F2.F2.

Estimated :et b"dgets Slit b# MediaSerbia! mill e"r

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T3 MarketO"tlook 

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"Source: AGB

Agenc# estimationHink is the leader in SOS with -G. share!

+ollowed b# rva 2?. and RTS 1 1G.$it is hard to estimate > on >able T3stations since the# do not have clear

rice olic#%

A/B O(cial R> dataHink is the leader in SOS with ?;.

share! +ollowed b# B82 1G. and rva1-.

E&endit"re b# T3 channels Dan5Mar 2011

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SO3H ink has the leadingosition with the -;. SO3)rva is at second lace! RTS

1 has moved on the thirdosition)RTS channels are allowed onl# commercial min"tes er

ho"r! while other T3 channels have 12 min er ho"r

Share o+ 3oice Total R> Investment inE"ro Dan5Mar 2011! Total Individ"als

Source: AGB

R> investmentsH *e note decline inoverall R> investments and E)/R incomarison to 1st J 2010

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#

To T3! >ommercial >ategories Dan5Mar 2011 vs) 2010 $mill) E"r%

Source: AGB

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Mobile roviders are leadingbrands in investments)

/ and Beohemia take the leadin 911)

To T3 Advertisers Brands Dan5Mar 2010 vs) 2011 $mill) E"r%

Source: AGB

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SOSH To advertisers investmost on ink! +ollowed b#

B82! R3A and RTS 1)

SO3H To advertisers getmost o+ their /RKs onink! +ollowed b# R3A

and RTS 1

>hannel slit +or to - advertisers Dan5Mar 2011 $mill) E"r% E) /Rs All ?F $L000%

Source: AGB

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Serbia has heav# T3cons"mers $)2h%E"roean average is

-)2 ho"rs

As a children9s channelsNosava7a# T3

logicall# have the mostchildren viewers) B82!

4o&! ink attract mostl##o"nger ad"lts! whileRTS12 have the oldest

a"dience)

3iewers ro'le Dan5Mar 2011 $Total Individ"als%

Average viewership 5.26 hr/day

Source: AGB

>ommercial viewershi! Dan5Mar 2011

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To rograms incl"delarge n"mber

domestic series!movies and realit#shows) All o+ them

are on RTS and ink)

*ith March data RTS1 take leadosition +rom T3 I:N with 2.

over 21).

3iewing habitsTotal Individ"als! Dan5Mar 2011

Source: AGB ' !:00 ' 2!:00(

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RTS 1 has a maor eak

+rom 18H-0 to 21 d"e tothe :ational :ews andthe ,omestic Serials)

ink takes over theleadershi osition

+rom RTS in Aril 910b"t looses in D"l# d"eto *>) In :ovemberthe# changed their

laces again)

rva had a signi'cantincrease vs) sameeriod in ast two

#ears! and s"rassedthe B82

Total AMRTotal Individ"als! Dan 20085Mar 2011

>ommercial AMR b# ,a# art! TotalIndivid"als! Dan5Mar 2011

Source: AGB ' !:00 ' 2!:00(

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T3 Send b# Month C To channels)o**ercial advertisers ,-& G./s 000 vs& AM. otal ndividuals

Source: AGB

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1!

T3 Send b# Month C I:N )o**ercial advertisers ,-& G./s 000 vs& AM. otal ndividuals

Source: AGB

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1"

T3 Send b# Month C RTS 1)o**ercial advertisers ,-& G./s 000 vs& AM. otal ndividuals

Source: AGB

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1$

T3 Send b# Month C RTS 2)o**ercial advertisers ,-& G./s 000 vs& AM. otal ndividuals

Source: AGB

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T3 Send b# Month C B82)o**ercial advertisers ,-& G./s 000 vs& AM. otal ndividuals

Source: AGB

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T3 Send b# Month C rva)o**ercial advertisers ,-& G./s 000 vs& AM. otal ndividuals

Source: AGB

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T3 Send b# Month C Avala)o**ercial advertisers ,-& G./s 000 vs& AM. otal ndividuals

Source: AGB

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T3 Send Dan"ar#5March)o**ercial advertisers otal ndividuals ,-& G./s 6i7& 2011& vs& 2010&

+168.9%

+17.6%

Source: AGB

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To T3 channels Dan"ar#5March)o**ercial advertisers ,-& G./s otal ndividuals

-25.2%

Source: AGB

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T3 sold5o"t commercial sots6a8%9art 0!%2! (

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T3 sold5o"t commercial and romosots6a8%9art 0!%2! (

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T3 s"mmar# 5 investments

•  otal .) invest*ents ell b8 5&$ *ainl8 due to decline ininvest*ents in categories ;on alco(olic drin?s= and;@air cos*etics=

• )ategories t(at (ave risen are ;