Pre-MIPTV interview series: Laurent Dumeau, Trace

Laurent Dumeau

One year on from Modern Times Group’s 75% buyout of Trace, Trace Sport Stars CEO Laurent Dumeau talked to Andy McDonald about the group’s new strategy. 

Youth-focused channel group Trace has had a busy year. In February 2014 Modern Times Group (MTG) agreed to buy a 75% controlling stake in the Europe-based channel provider for €30 million, a deal that has both given the firm a major industrial partner as well as spurred it towards a new corporate strategy focused around expansion, digital gains and premium content.

“Last year the big focus for us was of course the acquisition and the early stage of the integration, and I would say things are [now] much clearer and easier,” says Laurent Dumeau, CEO of Trace Sport Stars and senior vice-president, distribution. “The good news is we now have the backup of a very strong industrial partner who is actually pushing us to go beyond our comfort zone. They have a lot of hope and see a lot of potential in the Trace brand.”

Dumeau says that Trace is now spending a lot of time reviewing its strategy to see how it can accelerate its growth – either through its existing products, or new ones. Referring to Trace’s “new strategy” Dumeau says “clearly we have to accelerate our digital presence, our digital tools, and stop saying that we are a digital company but really embrace it.”

Second on Trace’s priority list is generating more premium content. “In a world where lots of content, especially for young people, is free or close to free, you really have to get a differentiator for the brand,” says Dumeau. Third priority is further expansion – both by targeting its products in markets where Trace is already strong, but also by entering new markets, such as Brazil.

MTG’s buyout of Trace closed last June after receiving regulatory approval from the French media authorities. MTG bought the shares from Citizen Capital, Entrepreneur Venture, NextStage and company management, the latter of which retained a 25% stake, in a deal that gave Trace an enterprise value of €40 million. Though Trace is based in Europe, its pay TV and digital platforms are now available in 160 countries to more than 80 million subscribers and the firm has a strong presence across Africa. Commenting at the time of the deal, Trace CEO Olivier Laouchez said that the “African dimension” had been key to MTG’s interest in Trace.

At the time of buyout, MTG’s executive vice-president, African operations, Joseph Hundah, also said that Trace “fits perfectly with what we are doing in Africa and, more broadly, with our linear and digital operations, as well as our content production houses.” He added that the takeover gives MTG “footholds from which we can expand even more in Europe, South America, Asia and Francophone countries around the world.”

Dumeau says that Trace was indeed “extremely keen to really accelerate in Africa last year” and has now opened between 10 and 15 offices across the continent. The firm upped its footprint in Africa through a string of deals in 2014. In August, Trace extended the coverage of its Trace Sport Stars channel after signing a carriage deal with Nigeria-based DTH service provider Montage Cable Television. The deal was the third agreement Trace had struck for the sports lifestyle channel in Africa, after previous deals with DStv and Canalsat Afrique.

In September, the firm also launched Trace Sport Stars on Angola and Mozambique-based pay TV operator TV Cabo’s platform for the first time, and said it was significantly increasing the reach of Trace Sport Stars in the African market, after extending its deal with pay TV firm MultiChoice.

Localisation efforts

Trace also last summer launched a new Portuguese-language music network in Angola and Mozambique called Trace Toca, dedicated to Afro-Lusophone music and culture. This airs popular music from Angola, Mozambique, Cape Verde, Guinea-Bissau, Brazil and the Caribbean, and marks an attempt by the firm to effectively localise its output – a strategy that Dumeau says Trace is keen to replicate elsewhere.

“There are some very large countries in Africa that deserve to have a free localised Trace version,” says Dumeau. “Trace Toca was, within a few weeks, I think, ranking among the 15 highest ranked channels on the DStv platform.” Specifically, Dumeau says that he wants to “develop Trace Sports Stars to make it even more relevant and more localised.” This, he says, can take the form of putting more local faces on the channel. However, he says that it is more efficient to find local partners to help make the output locally relevant.

Trace’s localisation plans don’t just rest on Africa. Though the firm has distribution and partnerships in place across Latin America in countries including Mexico, Colombia and Venezuela, one market that the firm has its sights firmly set on is Brazil.

“Brazil is one of these very, very big markets which is extremely regulated, where you can’t just launch on the back of your international feed. You need to have a local strategy with probably some local partnerships. So we are having some discussions. It’s a complex market [but] if you know Brazil, the young kids over there, all they dream about is music and football, so I think we are quite relevant,” says Dumeau.

“We want to be relevant where we have strong and large urban communities, or people who have an appetite for urban content,” he says of Trace’s global outlook.

In terms of linear brands, Trace currently has five stations on air – Trace Sports Stars, Trace Urban, Trace Tropical, Trace Africa and Trace Toca. However, Dumeau says “we could have maybe between one and four more additional brands” in the next few years.

“We have new ideas to launch new types of music channels, either for specific countries or specific genres,” he says, without giving precise details. “We will remain within our DNA, so we’re not going to go out tomorrow and launch Trace Classical or Trace Jazz. We think there is a way of slicing some genres and then capturing some really specific audiences.” While Trace has plans for new brand launches, this now goes beyond the “linear concept”. According to Dumeau, brands “will be delivered to the end-viewer in many different ways”.

“This year our focus is we want to become like a hub – we want to become the relevant entry point for the urban communities,” says Dumeau. This digital vision includes embracing subscription video-on-demand, but also “a little bit more than that.” He envisions a “proper digital platform to offer urban communities all the content that they like and they want to see”.

One way that Trace hopes to push the digital envelope is by developing more projects like its Trace Music Stars competition. Launched in collaboration with mobile partner Airtel last year, it ran in 14 countries across sub-Saharan Africa, with the final held in March this year in Kenya and the winner picking up a music contract with Universal Music. Dumeau describes the show as “like The Voice” but with “disruptive casting” – with submissions done via mobile phone rather than in person.

Dumeau says he hopes that Trace can take the format to “some big mature markets, probably [in] Europe,” and claims that discussions have also taken place in Central America and Asia. “It’s an interesting business model for us, because you bring the telco into the mix, and telcos are very keen to reach their young audience to retain them and to entertain them.”

Developing content that works in the digital world is clearly a priority for Trace. Dumeau says that developing content in a “more exclusive way, with better and better access to talent” is also increasingly important as the firm strives to make its content more and more premium.

“I think owning our content and delivering content people want to watch is the future. The more you go digital and the more owning the master or the piece of the content is key, because you can put it everywhere,” says Dumeau.

Mobile convergence is also top of mind for Trace, with Dumeau revealing that the firm aims to launch a mobile offering in Africa by the end of the year, in partnership with an existing operator. He says that discussion are already underway for the youth-focused Trace Mobile offering, which will include “a lot of added-value services.” These will include music, news, games, as well as access to exclusive concerts and events, says Dumeau.

Summing up Trace’s aspirations, Dumeau says that “our growth now is much more about how we get deeper in some of these markets: how we get more products, how we get more relevance, how we become a must-have for some of these subscribers.”