ReadSpeaker and MTV France

Best in France Case StudyJanuary 10, 2005

Team ES2 – C: Amlan Saha, Pierre Bonnet, Robert Shan, and Spencer Altman

Company Introductions

ReadSpeaker Swedish Company Web-based Technology Why come to France?

France 2nd Largest Country in Europe

New legislation in France made product a necessity

Do company values fit the French culture?

Without legislation, cultural attitudes towards product would be significant problem

MTV France American Company

managed from London Television and

Entertainment Why come to France?

€ 5 Billion advertising Do company values fit

the French culture? No!

Company Introductions

ReadSpeaker Constraints

Tax Level Social Security Cost Work Protection Policies

Product Adaptation to France

Required French Version of Software Product

Required French Sales & Marketing Representative

Essential Advice Outsourcing is Essential

for small start-ups in France

MTV France Constraints

Tax Level Social Security Cost Work Protection Policies 35 Hour Work Week Non-French Brand Identity

Product Adaptation to France French Production of Programming vs.

Importing American Production If American: Dubbed-French vs.

Subtitled? Different Viewing Habits of

Audience Essential Advice

Do not underestimate cultural differences across functions: product, marketing, and HR

ReadSpeaker Market Basics

Entered France in 2004 Translation Software which transforms the text on web-

pages into audio New Legislation in 2004 makes it mandatory for all

public websites to be handicapped-friendly Users of this legislation are the visually-impaired, senior citizens,

illiterate, dyslexic and other learning disabilities

Forecast Target all 8,000 Web-Sites of public and governmental

organisations in France by 2007 Target eLearning Web-providers

MTV Market Basics

Entered the French market in 2000 Music Television Non consolidated Forecast

Target sales 2004 : 3.4M€ Target distribution revenue 2004 : 4 M€

Distribution about 5 Million households 45 employees

Company products

ReadSpeaker What products are

produced in France? Everything is developed &

produced in Sweden. Only sales & marketing offices in France.

Sales & marketing regionalised

MTV Localized content

(Short programs, commercials spots, on air marketing, and some live interactive show)

are produced in France Produced in France in

order to be close to the source of content such as record labels

A maximum level of local production is reached

Company's clients

ReadSpeaker The company's clients

are Public organizations

(government, town councils, prefectures, local administration agencies)

eLearning web-centres

The clients expect a better & more natural result than the solution offered by Microsoft.

MTV The company's clients are

Communication agencies Record Labels Brands

The clients expect good ratings & quality audience.

Limited cable & satellite distribution network in France. Limited network penetration compared to UK, Germany and Italy

Why it went to France

MTV “MTV should be in

every household on the planet”. Today: 384 million households around the globe in 140 countries via 31 localized TV channels and 17 Web sites.

ReadSpeaker Go where the legislation is

favorable to the software product

UK, Germany, Italy are also being considered.

France has huge growth potential + the service is obligatory for public organizations.

Company values

ReadSpeaker The local office is a sales &

marketing unit only. The values of the company

remain in Sweden in the corporate office.

Swedish people are more conscious about handicapped issues than the French.

MTV Music, being international,

and innovation are the core values of the company

Being international is perceived as being American in France: it does not fit with company values?

The company does not know how to manage its values in all the countries,

Values topic is a huge internal debate every year.

Constraints in France

ReadSpeaker Worst constraints are tax,

rigid labour laws that protect employee insterests and administrative red-tape.

In the UK, Social security taxes are only 15%

Local subsidiary is outsourcing to avoid the risk of recruitment error.

MTV Arriving in France perceived as

dangerous. Partners tend to protect themselves by collaborating with other companies.

Discovered the importance of cultural differences.

Worst constraint is the cultural battle between US and France.

Watching American content is natural in the UK or Scandinavia, but not in France

Achieved only 5% of planned partnerships in first year, 10% in the second year

Had to review objectives.

Adaptation to France

ReadSpeaker No

MTV French HR dept French Legal dept 35 Hours work week Employee representative

elections Local production unit Local office New Legal Training policy

Key Constraint Costs

ReadSpeaker Key costs are taxes

MTV Key costs come from local

marketing Version adaptation and

production cost of dubbing or sub-titling.

Retrenchment benefits are prohibitively high.

Training is compulsory. Social Security tax

Key Benefit Numbers

ReadSpeaker Quality of the workforce. France & Paris are good for

attracting top managers due to cultural reasons.

Product quality Good logistics & infrastructure in

France Good health care system funded by

the state through taxes Big market High growth potential

MTV Big Market, 5B€ “Television sans

frontiere” allows MTV to avoid the 40% quotas of French content on the channel.

Essential Advice

ReadSpeaker Outsource to launch a

start up in France, don’t employ due to risks and costs associated with hiring and firing workers.

MTV Do not underestimate the power

of cultural differences in determining your product and even HR policies

We Thank

Roy LindemannPartner ReadSpeakerFormer Vice President, General Manager of MTV France

Our Team ES2-C

Amlan SahaPierre BonnetRobert Shan

Spencer Altman