Bill Roedy

China’s a huge trading partner for Australia, are there particular lessons for dealing with China?

I’m based in London, but I joke that I spent more time in China than I did in my UK operation.

China is difficult in the media world, there’s no question, but often they say there’s no global strategy, no international strategy without China, so failure is not an option. You have to figure it out.

That being said, I’ve been working with China for 20 years now, but there’s always a curveball that comes out when you least expect it.

Sure enough, a couple of months ago there was a ban on all foreign programming in prime time, and then [in February] the supposed successor to [president] Hu Jintao made a tour in the States and I’m told backed a new deal with the film studios which allows more films to come into China and also loosen perhaps the controls a little bit.

So there’s a lot of going back and forth, but it’s been slow and other businesses are easier.

You know, China, [it’s] a huge market for Volkswagen, Unilever. In the media world, because of the scrutiny and the desire for more control, it’s been slower going but I’ve always maintained that you’ve got to have a strategy, you have to persevere.

I think online provides some opportunity.

When I was last there I met some online television companies that are very interesting, getting pretty good viewership, not under the same restriction as television.

Consumer product is a big business for MTV networks and also Time Warner and Disney; you can get away from some of the controls with a consumer product business very importantly.

Of course, then you have to fight another challenge, which is piracy.

So China definitely has challenges that other countries do not have, but you’ve got to be there.

What we chose to do early on was play it by the book, develop relationships with the government; don’t do anything illegal.

I think MTV now has four offices in China and there’s award shows, the brand’s being established, there’s actually very good distribution but not the 24-hour channel. The 24-hour channel only exists in the Guangdong area and that was done on a deal that we give distribution for CCTV9 in hotels in exchange for landing rights. I think to this day MTV is the only branded 24-hour channel in Guangdong. So there’s been progress but it is slow going.

What has the GFC meant for your business in last few years?

Well, like everyone else there was a huge slowdown in 2008, particularly in the advertising side.

The MTV network has a business model that’s based on many different revenue streams. Advertising, when I last checked, was probably just under 50% so that was the most impacted. It rebounded somewhat in 2009 and it grew a little bit in 2010 and even 2011. I think it was flat last quarter and maybe even a little bit down, whereas the affiliate revenue grew by about 16%.

So the answer is yes, it has had an impact, but the good news is with the diversity of revenue sources you can work your way through it.

But there’s no question that it’s affected the media like it’s affected everybody else.

Sure. Now, the rise of Apple would have to be one of the biggest changes to the music industry over the past decade or so, along with the popularity of YouTube. What have these trends meant for MTV?

Well, less than you would think, because essentially it is a television business.

Apple changed everything for the music business – it’s now more a la carte as opposed to a bundled album, and it’s a lower margin business not only because of Apple but many other factors. So Apple has been a good thing for MTV in a way, because iTunes has forged another means of distribution for product.

And the iPad has also been good for the added revenue you would get from apps.

YouTube is interesting too because YouTube is now the largest source of music videos.

Of course, MTV has music in it and it’s been really the soul of the channel, but when you look to MTV, the mother channel, you’ll see that most of the programming is non-music. MTV has been able to spin off many channels that are all music.

So, in Australia for example, we have MTV Classic, which used to be VH1, and we have MTV Hits and those are spinoffs of the main brand that are almost completely music.

Music is still very strong on the spinoff channels, but on the main channel it’s less [important] and what happened there as the music video became more of a commodity, you generated much higher ratings and a deeper connection with your audience through other types of programming, which is exactly what MTV did.

So even though YouTube plays quite a few videos, it really doesn’t impact the business that much.

When you’re talking about other programming, you’re referring to reality TV?

Gosh, there is so much reality on MTV. MTV I suppose invented reality, but there’s other stuff too such as comedy.

Is reality TV a fad or is it something that will be with us for a long time?

I think it’s with us forever, the way it’s going now. It’s not only MTV; it’s all the channels now that have some form of reality programming.

Is that because it’s cheaper or because people, especially kids, prefer to watch it?

I think it’s more the latter. It started off as cheaper but when you have a hit such as Jersey Shore [American reality TV series] the expenses increase to almost any other type of show would be because the cast wants more money, the production budgets become higher, etcetera, etcetera.

Of the two reasons you listed, it’s more that’s what the people want to watch.

Has there been a dramatic change in what people want to watch over the past 20 years? Reality TV is more popular these days, but is there anything else you’ve noticed?

I think in the future it’s about big hits, because of this fragmentation with all the multiple platforms and YouTube launching around 100 channels soon.

Oddly it puts more value into large audiences, into aggregating audiences because that’s what advertisers like, particularly if they want to launch a new product.

I think we’re going to see even more emphasis on hits and people wanting to watch hits and people wanting to watch a lot more live programming.

And obviously tastes change from generation to generation, so there’s been a lot of change over the years.

But the main difference is the idea of having a hit and therefore you have to have the capital, you have to have the size, and scale will become even more important going forward.

Thank you so much, it was lovely to talk to you.