Mondo TV’s Matteo Corradi

Mondo TV CEO Matteo Corradi tells TV Kids about the benefits of putting co-productions and well-known brands at the heart of the company’s business strategy.

Mondo TV is one of Europe’s leading producers and distributors of animated feature films and TV series. The group consists of four companies located in Italy, France, Spain and Switzerland. It owns a library of 1,600 half-hours of TV episodes and 90 TV movies. Established in 1964 with the aim of importing animation into the Italian market, Mondo TV has branched out through the decades into production and co-production and today is home to such evergreen properties as Puppy in My Pocket, Angel’s Friends and Sissi, the Young Empress.

TV KIDS: How have you reorganized the company?
CORRADI: Four years ago we decided to change Mondo TV’s business model and strategy. We decided to move away from the business model that is typical in this industry—idea, animation, toys. We went to the toy makers worldwide, the publishing companies and the online game companies and proposed joint ventures with them: fifty-fifty operations on their famous brands in order to do an animated TV show. This strategy brought the group 27 co-productions currently in place with 15 different co-producers on five continents. That has allowed us to be the most active producer of animated TV shows in the world at the moment, in terms of quantity, because we are going to have 650 half-hour episodes ready in 18 months. Our main clients are York, which is a big public Chinese group; Abu Dhabi Media, which is a major media branch of the Abu Dhabi government; the Baraem and Jeem channels from Qatar; and Aurora World Corp., the famous Korean toy company. And we are working with three American companies: Toon Goggles for Eddie Is a Yeti, Lawless Entertainment for Adventures in Duckport and Animagic for Bug Rangers. We are also working with Russian Mobile Television for Cat Leo. So we have an extraordinary world of co-producers, and our business model is very simple: we co-produce with them, we share the costs and the revenues. It is nice because they are happy with our TV distribution and we are happy with their toy distribution. The business risk is very low because we participate in 27 projects, so we have 27 eggs in our basket—some eggs will be cooked well; some eggs will not! But this is part of the game, and with 27, the risk of big problems for the company is very small.

TV KIDS: And this has worked very well for the company’s market cap?
CORRADI: Exactly. Three years ago our share price was €0.37 ($0.41) and the market cap was around €15 million ($16.7 million). At this moment our share price is around €4.50 ($5) and our market cap, including the two controlled companies that we were able to list in the last three years in France and Switzerland, is around €165 million ($184 million).

TV KIDS: Unfortunately many companies working in the children’s business have struggled in the last few years. Has your international strategy helped you?
CORRADI: Now we are doing only 10 percent of our turnover in Italy and 35 percent in Europe, so 65 percent is coming from outside Italy and Europe, mainly from China, North America and from the Gulf area. I think the problems that our competitors are having are due to the fact that they are still focusing on TV license fees. Of our turnover, which in 2016 will be €32 million ($36 million), only 10 to 15 percent is coming from TV fees. The rest is coming from L&M and toys. And the nice thing about our company—and we published the Q1 preliminary results on April 1—is that we have EBITDA that is 75 percent of the revenues and EBIT that is 40 percent of the revenues. This is the main point of our company. We have an enormous marginality because our business is very simple and secure. We have zero debt and total equity of the group is €41 million ($46 million). So we are in a very good position. And with the show Heidi, Welcome Home we are entering the teen soap-opera business. That is also another part of the business that we think will be very important for the future: we serve kids from 2 years old, with the preschool shows, up to 18 years old with Heidi.

TV KIDS: You mentioned China. How important is it to have partners there now?
CORRADI: China will become in a few years the new United States for media. China’s box office is sometimes three times what it is in the U.S. It’s amazing. So we made a big agreement with York, which is a publicly listed company in Shenzhen and Shanghai. I travel to China four times a year. We are co-producing in China. We are selling our library in China and our toys, and all the co-productions we are doing are airing in prime time on CCTV. China today is 45 percent of our revenues, and in the future this will increase dramatically.