The Market

Telenovela attract vast audiences in both developing and developed countries. The potential number of Telenovela viewers around the world was estimated by the Boston Globe in 2004 at two billion. According to Venevision, their potential customer list for Telenovela numbers 350 television channels worldwide. The industry produces over 12,000 Telenovela television hours annually, at an average cost of US$48,000 per episode.

Historically more than 65,000 television hours have been purchased annually in Latin America alone and more than 53 per cent of Latin Americans between the ages of 12 and 64 are believed to be regular viewers of Telenovela.

Eastern Europe is one of the most dynamic markets for Telenovela. The introduction of a dedicated pan-regional Telenovela channel in 1998 shows the growth potential of the Telenovela in East and Central Europe. Between 2002 and 2003 its distribution increased in some markets such as the Czech Republic by over 100 per cent. In Bulgaria, the increase was 40 per cent; in Romania, 30 per cent; and in Poland, 15 per cent. Subscribers increased by 30 per cent overall.

Asia is second only to Latin America in terms of Telenovela popularity. China in particular and the region in general continue to be subject to restrictive regulation, both on content and on accessibility. The market, however, is undergoing a process of deregulation, and despite difficulties, sales to this region, which until 2000 represented 5 per cent of the total budget of Telefe International SA, with whom the company has distribution relationships, grew to 12 per cent in 2001 and have continued to grow since. Following growth in this market over the last three years, Asia now accounts for 30 per cent of the business of Coral International (the distribution arm of a Telenovela producer in Colombia). These markets may also provide the Group with the opportunity to generate revenues through the licensing of Format rights. An example of this is India (through the Star Platform) where Dori Media Group's "Rebelde Way" has been locally re-produced.

The power of Telenovela and the loyalty they generate are very strong in the US Hispanic market. In cities with substantial Hispanic communities such as Los Angeles, successful channels, broadcasting Telenovela hits sometimes achieve higher prime time ratings than any English-language broadcasting network channels. Of the top twenty Spanish language TV programmes among Hispanic viewers, seventeen were Telenovela at the end of March 2004. Although this market has plenty of Spanish channels which include Telenovela as part of their output, there is no dedicated Telenovela channel. Advertisers spent an estimated US$3.09 billion in 2004 to market their products to an estimated 39.9 million people in the US Hispanic community, which is the fastest growing community in the US. It is estimated that by 2010, US Hispanics will spend US$1 trillion a year on goods and services, an increase from US$444 billion a year on goods and services today. The Group believes that current advertising expenditure in this sector does not adequately reflect the increase in purchasing power of the US Hispanic population.

Once a country develops a taste for Telenovela, the next natural step is to introduce a dedicated Telenovela channel, such as in Israel (VIVA, and VIVA Platina – two Telenovela dedicated channels owned and operated by the Group), in Eastern Europe and in Malaysia, where a channel is being prepared these days.


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	Telenovela Telenovelas What is Telenovela The Market	The Market Telenovela attract vast audiences in both developing and developed countries. The potential number of Telenovela viewers around the world was estimated by the Boston Globe in 2004 at two billion. According to Venevision, their potential customer list for Telenovela numbers 350 television channels worldwide. The industry produces over 12,000 Telenovela television hours annually, at an average cost of US$48,000 per episode. Historically more than 65,000 television hours have been purchased annually in Latin America alone and more than 53 per cent of Latin Americans between the ages of 12 and 64 are believed to be regular viewers of Telenovela. Eastern Europe is one of the most dynamic markets for Telenovela. The introduction of a dedicated pan-regional Telenovela channel in 1998 shows the growth potential of the Telenovela in East and Central Europe. Between 2002 and 2003 its distribution increased in some markets such as the Czech Republic by over 100 per cent. In Bulgaria, the increase was 40 per cent; in Romania, 30 per cent; and in Poland, 15 per cent. Subscribers increased by 30 per cent overall. Asia is second only to Latin America in terms of Telenovela popularity. China in particular and the region in general continue to be subject to restrictive regulation, both on content and on accessibility. The market, however, is undergoing a process of deregulation, and despite difficulties, sales to this region, which until 2000 represented 5 per cent of the total budget of Telefe International SA, with whom the company has distribution relationships, grew to 12 per cent in 2001 and have continued to grow since. Following growth in this market over the last three years, Asia now accounts for 30 per cent of the business of Coral International (the distribution arm of a Telenovela producer in Colombia). These markets may also provide the Group with the opportunity to generate revenues through the licensing of Format rights. An example of this is India (through the Star Platform) where Dori Media Group's "Rebelde Way" has been locally re-produced. The power of Telenovela and the loyalty they generate are very strong in the US Hispanic market. In cities with substantial Hispanic communities such as Los Angeles, successful channels, broadcasting Telenovela hits sometimes achieve higher prime time ratings than any English-language broadcasting network channels. Of the top twenty Spanish language TV programmes among Hispanic viewers, seventeen were Telenovela at the end of March 2004. Although this market has plenty of Spanish channels which include Telenovela as part of their output, there is no dedicated Telenovela channel. Advertisers spent an estimated US$3.09 billion in 2004 to market their products to an estimated 39.9 million people in the US Hispanic community, which is the fastest growing community in the US. It is estimated that by 2010, US Hispanics will spend US$1 trillion a year on goods and services, an increase from US$444 billion a year on goods and services today. The Group believes that current advertising expenditure in this sector does not adequately reflect the increase in purchasing power of the US Hispanic population. Once a country develops a taste for Telenovela, the next natural step is to introduce a dedicated Telenovela channel, such as in Israel (VIVA, and VIVA Platina – two Telenovela dedicated channels owned and operated by the Group), in Eastern Europe and in Malaysia, where a channel is being prepared these days.