CASE STUDY

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YNOT TV IN TURKEY IN 1993*

As VP for New Business Development, Chuck Vandersee was hired with one goal in mind: new

markets. The television market in the United States was viewed as largely saturated; YNOT TV had

acquired rights to syndicated series that it then distributed around the world. Chuck built his reputation

entering difficult markets. Most of the American studios had given up on Africa. But not Chuck. He did

not know how to “give up.” In spite of significant initial resistance, he pushed through negotiations and

successfully signed deals in countries such as Nigeria and Uganda. He was viewed as a “pioneer.”

Chuck was now pondering Turkey. He had little experience in the region—it seemed now might

be an opportune time to acquire some. He just received a call from Oszgur Toraman. Oszgur wants to

buy packages of YNOT TV programming, and he claims he is willing to pay a premium!

YNOT TV

YNOT TV is in the business of selling programming. The company does not produce its own

shows, but distributes movies and multiple seasons of syndicated series. Chuck’s job is to negotiate

deals with stations around the world. His preference is for “package” deals that include bundles of

movies and multiple seasons of television shows. Most of these deals constitute multi-million dollar

annual contracts.

TURKEY

Turkey is a Muslim country located between central Asia and northern Africa. Although people

within the country are gradually liberalizing in terms of their social values, the government remains rigid

in its imposition of standards that endeavor to keep the culture virtually stagnant. Television is one of

the vehicles that the government continues to control, in an attempt to protect the social values

attributed to Turkish culture.

The television market in Turkey is severely restricted. According to local law, Turkey’s state-

owned television station, TRT is the only television station allowed to operate in the country. The only

shows that air on TRT are those considered consistent with local values according to the government.

The younger generation is increasingly opposing staunch adherence to traditional values. In

addition, the young population has a significant voice. Whereas, in the United States, 37% of the

*This case is based loosely on a real situation. Many of the names and events have been disguised or modified for the purpose of illustration for the intended class discussion. Copyright © 2012 by Neu Academic Press. To order copies or request permission to reproduce materials please go to http://www.study.net. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet or transmitted in any form or by any means—electronic, mechanical, photocopying, recording or otherwise—without the permission of Neu Academic Press.

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population is under 35, more than 58% of Turkey is comprised of people under 35. And many of those

people already have at least limited access to Western media through travel and/or village-owned

satellite dishes.

YNOT TV IN TURKEY

YNOT TV has an existing relationship with TRT, but one he considers weak. TRT refused to

engage in bundle deals and instead only purchases a small number of movies and episodes from select

series. Among the movies TRT has purchased are Superman, The Black Stallion, Chariots of Fire, Herbie

Goes Bananas, The Sound of Music, Beauty & the Beast, ET, Star Wars and Driving Miss Daisy. Episodes

TRT has purchased are from shows such as “I Love Lucy,” “The Brady Bunch,” “The Cosby Show,”

“Growing Pains” and “The Muppet Show.” In essence, TRT engaged in a policy of “censorship” by

rejecting content considered too offensive or controversial according to claimed Turkish standards.

TRT’s annual contract with YNOT TV amounts to less than $500,000.

NEW TV

After hanging up the phone, Chuck immediately did some preliminary research. Oszgur Toraman

is the son of one of Turkey’s wealthiest industrialists, whose multi-billion-dollar holding company owned

banks, public utilities, manufacturing facilities and several radio stations. Rumor had it that Toraman

Enterprises had a strong reputation with the Turkish government. Oszgur is slowly taking control of his

father’s enterprise.

At the helm, Oszgur has created New TV, which operates out of Frankfurt, Germany. From there,

New TV is broadcasting into Turkey via satellite. New TV is getting around the local Turkish ban on

private television by beaming its signal to a satellite, which “downlinks” the signal to a master antenna

in Turkey. That signal is then de-encrypted and broadcast to land-based antenna throughout Turkey.

When Oszgur contacted Chuck, he stated that he wanted to buy a large volume of content and

that he was hoping to develop a long-term relationship. He is interested in movies such as Terminator II,

Pretty Woman, Rambo, The Shining, 9 ½ Weeks, Alien, Desperately Seeking Susan, Beverly Hills Cop,

Weird Science, Basic Instinct, Saturday Night Fever, Robocop, Home Alone, Hunt for Red October, Cape

Fear, Aladdin and Teenage Mutant Ninja Turtles. Included among the series of interest are “Cheers,”

“Falcon Crest,” “Murphy Brown,” “Magnum PI,” “Roseanne,” “Baywatch,” “Married with Children,”

“Beverly Hills 90210,” “Dallas,” “LA Law” and “National Geographic Explorer.”

In their conversation, Chuck did express one concern, that is, about possible governmental

intervention. At that point, Oszgur smiled. “I had dinner last week with the prime minister. He will not

offer any sort of public approval. But he has agreed to turn a ‘blind eye’ to our operations.” According to

Oszgur, people in Turkey no longer strictly adhere to the values claimed by the government to be

“Turkish values.”

And, as previously stated, Oszgur was willing to pay a premium. He offered to pay $3,000 to

$4,000 for what TRT only paid $1,000.

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THE CHALLENGE

As Chuck considers this potentially lucrative opportunity, he finds himself staring blankly out the

window. He still thinks it might be too good to be true. While Oszgur went out of his way to mention his

long-term interest, Chuck wonders what sort of long term there could be with a company operating

outside the existing legal framework. Sure, Oszgur claims to have the tacit permission of the prime

minister, but what if the prime minister changes his mind—or what if control over the government

changes hands? While the current contract with TRT is not huge, it could grow into something much

larger, particularly if TRT decides to liberalize its programming. Part of the reason Chuck had been

maintaining a relationship with TRT, in spite of its small size, was with an eye toward significant future

potential. TRT trusted Chuck, and that sort of trust is essential to any business relationship.

Chuck could not escape the excitement and lure of how profitable this arrangement could be in

the short term, but he was concerned also about possible negative ramifications to YNOT TV’s

reputation. American companies around the world are accused of Western imperialism in their alleged

attempts to export American values without regard for local customs. If anything were to go wrong with

this arrangement, it could seriously handicap his ability to do business in Turkey in the future. Besides,

was it YNOT TV’s place to deliver a product to an unwelcoming market? Although Oszgur claimed that

people in Turkey want new programming, why have they not spoken up on their own?

As Chuck began to focus his eyes, he turned back around to face his desk. If he did not respond

to Oszgur, he felt confident Oszgur would attempt to find programming from someone else. He needed

to act quickly so that the decision was his to make.

Feel free to take the position of Chuck Vandersee or of an advisor to Chuck Vandersee. How should

Chuck respond to this opportunity and why?