Dori Media Group’s Palti

June 2007

Through its varied subsidiaries, Dori Media Group (DMG) produces novelas in Latin America and in Israel and distributes them in more than 50 countries around the world. It owns and operates TV channels dedicated to novelas in Israel and Indonesia. In addition to this, DMG has also launched merchandising and ancillary businesses revolving around novelas. There is no doubt Nadav Palti, DMG’s president and CEO, firmly believes in the long-term potential of this genre. He talks about plans for the company.

TV NOVELAS: What has been the secret to Dori Media’s international success?

PALTI: Wow, this is the million-dollar question! What I think is part of the secret is that we concentrate on tele�novelas. We take advantage of various opportunities—in Indonesia we launched the BabyTV channel besides our telenovela channel—but 99 percent of our business is focused on telenovelas.

If we look at our competitors, although I don’t consider them competitors because I see them more as joint-venture partners, Televisa is the largest media company in Latin America and it buys a lot of material from us. Rebelde Way (The Rebels), for example, Amor m�o (Looney Love) or Floricienta (Flinder�ella)—which is airing right now and it’s called Lola, �rase una vez—or Rinc�n de luz or Sos mi vida. Televisa buys formats to the programs that we produce in Argen�tina and they make their own versions in Mexico. On the other hand, we are big clients of Televisa’s because we have four TV channels and we buy 4,000 hours a year. So we buy a lot of programming from Televisa.

We are also partners with Televisa. For example, when we did Rebelde Way, we sold the format rights and we are partners in all the ancillary businesses around it, including the music, the live concerts, merchandising, SMS and Internet. So even if you take our biggest competitor in the market, Televisa, we actually have more of a partnership with them rather than head-to-head competition.

The atmosphere that we are working in, because of our unique business model, is a very good one. First of all, we focus on telenovelas, but we are involved in a wide range of TV businesses: we produce, we distribute all around the world, we own and operate TV channels and we have the ancillary-business de�partment. We also have a new-media department. It includes mobile, VOD and Internet sites, which we are [launching] in the last quarter of this year.

Second, we have good product. In the last three or four years we produced around 3,500 hours, most of which are very successful. If you have a good product in show business only the sky is the limit, because everyone wants your content and they are willing to pay a lot of money to get it.

Third, we developed a very good distribution arm called Dori Media Distribution. We work all around the world. The headquarters are in Israel. We have a big company in Switzerland that handles all of Western Europe, as well as Central and Eastern European countries. We have a company in Buenos Aires that deals with all of Latin America, and we have a company in the Philippines that deals with Asia. This year we want to launch a branch in Miami, to deal specifically with the U.S. because that market is growing very rapidly.

We [provide our clients with] service on the ground with local people, in the local language, in the local culture (which is very important) and in the same time zone. You don’t have to wait two days to get answers; you can get an answer the same day. This is the first thing that clients appreciate and like.

TV NOVELAS: What can you tell us about your plans for an office in the U.S.?

PALTI: It will be in one of the cities with the greatest Hispanic populations. The idea is that we want to launch a website. I call it the ultimate site for telenovelas and we want to create a new world for all the telenovela fans. By the way, we have around 2 billion people who watch telenovelas every day all around the world: in Indonesia, Malaysia, Thailand, India, Russia, Eastern and Central Europe, Germany, Western Europe, the Middle East and, of course, all of Latin America. So we want to create for these 2 billion people a new place where they can meet and share ideas, even merchandising. We want to combine two mainstreams of the Internet today: one is MySpace, a community site with user-generated content; and the other is imdb.com. [We are creating] an encyclopedia of telenovelas. We want to launch it with 700 different tele�novelas in our database, and it will include everything about the teleno�velas. You can search by stars, countries, years, music, everything, and also get three- to eight-minute clips that show the main idea of each novela. We also want to provide a novela VOD so you can watch them on the site, but that will be the second stage.

We want to develop a big operation in the U.S. Univision, Telemundo and other channels broadcast telenovelas, whether they are originals or based on English, Mexican or Hispanic formats. You can re-version the Argentinean telenovelas for the Hispanic market. So our office in the U.S. will also deal with extending our novelas into North America.

TV NOVELAS: What other plans do you have for new media?

PALTI: We produce a special telenovela for mobile. It’s a spin-off of a telenovela that we produced in Israel, called The Champion. We’ve produced 25 episodes, three minutes each. This is also good for the Internet. We also use a lot of video on demand, which is very developed in Israel. Last year, a tele�novela of 120 episodes that we broadcast on TV had 20 million downloads on VOD. That’s huge. And this year we want to develop another telenovela for mobile in Israel and maybe one in Argentina.

TV NOVELAS: What synergies are there between your productions in Israel and Argentina?

PALTI: There are a few. We have three different creative teams, and this ties in to the key success that I spoke about before. One team is in Israel and produces the Israeli telenovelas. Also in Israel is the team that creates or buys all the content for the TV channels. And the third is the creative team in Argentina, which is responsible for all the telenovelas we produce or co-produce in Argentina. These three teams create synergy. For example, a few weeks ago, three people from Israel went to Argentina to discuss the new telenovela that we are producing there. It’s called Lalola, and I think it will be the next Betty la fea.

These three people went to brainstorm with the Argentinean creative team, the sales team, the Internet team and with the mobile team. Each team gave its input to make sure that the telenovela, the script and the bible would be better, and not only for Argentina, but also to suit the needs of the rest of the world. They also wanted to create the opportunity to use it online and for mobile. We understand that the market needs not only telenovelas that are 120 to 150 episodes long. It also needs 26-episode weekly novelas for prime time. So for the first time now, with Lalola, we are going to produce a 120-episode daily telenovela and, in parallel, we’ll produce 26 episodes of the same tele�novela. But it will be a weekly, made for prime time, for the more sophisticated countries like Germany, the U.K. or France and for the American channels.

So we are producing something very unique, with a very special pilot that will give you [an indication] of how it would be in 26 episodes. It’s the same idea but a little bit different story. We did this after we learned the needs of the market, and listened to clients who have said they need this kind of story and this kind of product.

TV NOVELAS: How are your TV channels doing?

PALTI: Viva and Viva Platina in Israel are a huge success. Viva is on basic cable and satellite. In Israel, cable and satellite have a penetration of 95 percent, so it’s like free-to-air. Viva is number four, sometimes number five, in Israel if you measure its ratings or share, after the free-TV broadcasters Channel 2, Channel 10 and Channel 1, and sometimes Channel 3. And TelaViva in Indonesia is a huge success, as is BabyTV.

This year we want to launch one or two more channels and we are negotiating in several territories: Thailand, India, Japan, the Middle East and Western Europe. I hope we sign at least one deal during the third quarter of this year.