The Multi-channel Media House Model

Modern Times Group MTG ABNasdaq OMX Stockholm : MTGA, MTGB 1

2010 Capital Markets Day

Anders Nilsson, Chief Operating Officer

Hein Espen Hattestad, CEO MTG Norway

The Multi-channel Media House Model


How we built the Media House in Scandinavia

•• SwedenSweden

•• NorwayNorway

•• DenmarkDenmark

Analogue shutdown completedAnalogue shutdown completed

•• Norway : Q4 2009 Norway : Q4 2009 (Regional Shutdown)(Regional Shutdown)

•• Sweden : Q4 2007 Sweden : Q4 2007 (Regional Shutdown)(Regional Shutdown)

•• Denmark: Q4 2009 Denmark: Q4 2009 (National Shutdown)(National Shutdown)

Level playing fieldLevel playing field


Successful triple play effect with huge potential

Digitalisation of TV distribution

Launch of secondary channels

Complementary positioning of channel portfolio

Bundled sales

CompletedCompleted with resulting with resulting

rise in penetration!rise in penetration!


rise in penetration!rise in penetration!


rise in audience sharerise in audience share!!


rise in audience sharerise in audience share!!

Implemented with resulting Implemented with resulting

closing of price discount to closing of price discount to

incumbents & increase in incumbents & increase in

market share!market share!


closing of price discount to closing of price discount to

incumbents & increase in incumbents & increase in

market share!market share!


increase in reach!increase in reach!


increase in reach!increase in reach!


Sweden – Impact of Introduction of the Media House

PositioningTV3 Penetration

TV Advertising Market Share Index

31.636.1

44.641.5

2006 2009

MTG TV4

2006 Q1 2010

100

107112

2007 2008 2009

MTG

Commercial share of viewing (15-49)


Norway – Impact of Introduction of the Media House

Positioning


TV3 Penetration


2006 Q1 2010

100114 126

2007 2008 2009A

ge


100113 123

2007 2008 2009

Denmark – Impact of Introduction of the Media House


PositioningTV3 Penetration


2006 Q1 2010

Ag

e


Huge Potential remains from Triple Play Model

Norway 2009Sweden 2009

49.9

57.2

T V2 Gro up

CSOV (15-49)

Share of Spending

41.5

54.6

T V4 Gro up

CSOV(15-49)

Share of Spending

•• Penetration Penetration –– potential to raise levels for secondary channelspotential to raise levels for secondary channels

•• Audience Share Audience Share –– complementary positioning increases combined reachcomplementary positioning increases combined reach

•• Pricing Pricing –– undeserved discount to incumbent consistently erodingundeserved discount to incumbent consistently eroding

==

Monetization of rising Media House audience share clear from dramatic market outperformanceMonetization of rising Media House audience share clear from dramatic market outperformance


Summary

GDP Growth X

Advertising Market Growth X +

TV Advertising Market Growth X ++

MTG Media House Growth X +++


Building the Media House in Emerging Europe

2010

Lithuania:

Hungary:

Czech:

Slovenia:

Bulgaria:

Estonia:

Latvia:

Main competitor

Estonia

Latvia Private

Lithuania

Czech

Slovenia

Hungary

Bulgaria

Emerging footprint

Population: 37 million

Weekly reach: 22 million

Scandinavian footprint

Population: 20 million

Weekly reach: 11 million


Building the Media House in Emerging Europe

Digitalisation of TV distribution

Launch of secondary channels

Complementary positioning of channel portfolio

Bundled sales

Challenge market leaderChallenge market leader


Bulgaria

PositioningChannel Penetration

Media House status

Secondary channels

Potential to increase

penetration

Bundled sales

Men

Ag

e

Women

0

20

40

60

80

100

Diema Diema 2 DiemaF NOVA

2007 2008 2009

Commercial share of viewing & Market share index (2008=100)

0

20

40

60

80

100

120

140

2008 2009 YTD

0%

10%

20%

30%

40%

50%

MTG MS

MTG CSOV

bTV CSOV


Czech Republic


Media House status

CT1 CT2

Nova

Prima

NOVA CINEMA

Prima COOL

BARRANDOV

30

35

40

45

50

55

60

30 35 40 45 50 55 60 65

Women Men

Ag

e

0

25

50

75

100

2008 2009

0%

10%

20%

30%

40%

50%

MTG

MS

MTG

CSOV

Nova

CSOV

Secondary channels


penetration

Bundled sales

Commercial share of viewing & TV Advertising Market Share Index

0

20

40

60

80

100

2008 2009 YTDPrima COOL


Baltics


Media House status

Secondary channels


penetration

Bundled sales

ESTONIA

Commercial share of viewing & TV Advertising Market Share Index

0

20

40

60

80

100

TV3 TV6 3+

Estonia Latvia Lithuania

2009

0

10

20

30

40

50

2008 2009 YTD

85

90

95

100

105

110

115CSOV Estonia

CSOV Latvia

CSOV Lithuania

MS Estonia

MS Latvia

MS Lithuania


Clear Growth Potential

CountryEU-

country

TV market

size 2009

Ad

spend/capita

Sales full

year 2009

TV ad

market CAGR

(03-07)

Est.

average CPT

index

SCANDINAVIA 1 029 m€ 53 € 384 m€ 8% 100

ESTONIA

LATVIA

LITHUANIA

SLOVENIA 792 m€ 9-31 € 210 m€ 7-27% 20-50

BULGARIA

CZECH

HUNGARY


Summary

•• Higher advertising market growth in Emerging vs. Western EuropeHigher advertising market growth in Emerging vs. Western Europe

– low ad spend per capita

– low CPT levels

– higher historic growth rates

• TV will benefit most as is only national reach media in some markets & has high market share in all markets

• Successful roll-out of Media house strategy + benefits of digitalization are continually boosting market shares

• Substantial incremental operating leverage moving forward


2010 Capital Markets Day

Anders Nilsson, Chief Operating Officer

Hein Espen Hattestad, CEO MTG Norway

The Multi-channel Media House Model

The Multi-channel Media House Model

Education

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