ReadSpeaker and MTV France

1
ReadSpeaker and MTV France

• Best in France Case Study
• January 10, 2005

Team ES2 C Amlan Saha, Pierre Bonnet, Robert
Shan, and Spencer Altman
2
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!

3
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

4
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

5
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

6
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

7
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

8
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.

9
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.

10
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.

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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

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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

13
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.

14
Essential Advice

• ReadSpeaker
• Outsource to launch a start up in France, dont
  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

15
We Thank

• Roy Lindemann
• Partner ReadSpeaker
• Former Vice President, General Manager of MTV
  France

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Our Team ES2-C

• Amlan Saha
• Pierre Bonnet
• Robert Shan
• Spencer Altman