Vivendi

Vivendi, a world leader in communications and entertainment, is active throughout the entire network chain, from the production and publishing of content (video games, music, audiovisual works and films) to its distribution, primarily via digital networks.

Vivendi relies on the strength of its creative staff, engineers and major brands. Vivendi’s businesses all pertain to the digital and new technologies sector. They focus directly on end-consumers through strong brands, including Activision Blizzard, Universal Music, SFR, Maroc Telecom, GVT, and Canal+, which offer digital-quality creative content, telephony and high-speed Internet services. These common points represent competitive advantages for Vivendi that allow it to develop strong skills, in particular in subscription management, branding, distribution platforms, content creation and copyrights, through a productive exchange of know-how and by the anticipation of technological developments.

Vivendi’s performance is largely due to its subscription-based economic model: the Group’s expertise is strongly linked to the capture of subscribers, customer loyalty and the optimization of subscriber-related revenue. This business model represents a major strength because it provides a recurring and therefore predictable revenue stream. Combined with the close attention paid by the Group to its customers, this approach allows its businesses to create innovative new services in response to a growing demand for mobility and high-speed services.

Vivendi’s development strategy includes strengthening its existing businesses, implementing synergies among entities when they create value, and expanding its presence in high-growth territories or in operations related to its businesses that show high-growth potential.

In a period of steady growth in the use of digital services and their distribution models, Vivendi offers all its operating entities the necessary stability and support to successfully respond to these changes.

Thus, since its inclusion within the Group, GVT, the most recent company to join the Vivendi Group, has been able to accelerate its investment and growth through resources provided by Vivendi. . It has also launched new products in Brazil (in partnership with Universal Music, SFR and Canal+ Group), which will allow it to strengthen its reputation for innovation and competitiveness.

Vivendi also seeks to obtain exclusive control over its operating entities in France that have outstanding minority interests and expects to acquire the relevant minority interests when and if the conditions are favorable. This strategy allows Vivendi to focus its efforts solely on controlled entities, and explains the sale of minority holdings such as NBC Universal.

Vivendi has dedicated considerable financial and human resources to strengthening the competitive position of its businesses (i.e., through the purchase of TPS by the Canal+ Group, the purchase of Bertelsmann Music Publishing by Universal Music, the purchase of the fixed-line-Internet activities of Télé 2 France and Neuf Cegetel by SFR, the purchase of four telecommunications operators in Africa by Maroc Telecom Group and the merger between Vivendi Games and Activision that led to the formation of Activision Blizzard). The Group is focusing on strengthening its growth in emerging countries (acquisition of GVT in Brazil, Canal+ Group operations in Vietnam and Africa, as well as partnerships involving Activision Blizzard and UMG in Asia and the Middle East). It is also implementing an ambitious and proactive policy based on innovation, investment in creation and networks, and synergies between businesses.

Innovation

Vivendi puts innovation at the core of its development strategy. The continued launch of innovative products and services, combined with its diversification initiatives, strengthens the commercial and financial results of its subsidiaries as well as their leading market positions in content, platforms and interactive networks.

Through a number of innovative offers aimed at the general public (e.g., the new Evolution neufbox, the first play-on-demand offer in the French television market), SFR is enhancing its customers’ day-to-day digital experience. At the same time, the operator has taken an active approach to expanding its operational scope in activities related to its core businesses such as new, connected home services (SFR Homescope). For the past several years, Universal Music Group has been successfully involved in a number of diversification efforts, entering into marketing agreements with partners, signing “360°” agreements with its artists, offering a range of services and content directly to music consumers, and investing in merchandising. Innovation is also a high priority for Maroc Telecom Group, which offers services that incorporate the latest trends, such as Mobicash, the mobile phone-based money-transfer and payment solution. Canal+ Group is enhancing its customers’ experience by providing a wide range of premium content and interactive services, at a time when the number of terminals connected to the Internet, and screens on which it is possible to access programs, is increasing. Finally, the efforts of Activision Blizzard are materializing: its studios have implemented development processes of incomparable quality, allowing them to release the most innovative games, in terms of both player participation on social networks and ergonomics. For example, the use of movement-capture technology in the game Call of Duty: Black Ops allows for incredibly realistic facial expressions.

In October 2010, Vivendi formed an Innovation Division to strengthen this trend. Its purpose is to increase the number of internal initiatives, stimulate organic growth, and identify new growth vectors. This approach is centered around four major axes:

• launching new plans for robust growth;
• developing cooperation between Group businesses;
• increasing visibility and accelerating the success of internal innovation plans within each business; and
• encouraging the recognition of external innovation.

To meet these objectives, the Innovation Division uses teams within each business area to implement a network of recommendations by the various communities of experts, together with the Group’s assets in developing related operations.

A regular report on innovation within the Group is provided to the Management Board and Supervisory Board. An Innovation Committee and a “Greenlighting” committee were formed to establish priorities and approve the allocation of specific resources for growth and diversification plans.

For example, GVT is using the expertise of Canal+ Group and SFR in connection with its launch of a pay-TV offering in Brazil. This exchange of know-how is resulting in an acceleration of the operational implementation of the projects, which minimizes the risks incurred.

Each of Vivendi’s businesses are facing similar technical challenges, with the emergence of common consumer needs, and competition from the same players. To give the Group greater oversight and enhance its prospects, the new Innovation Division will promote cross-disciplinary work on strategic issues, encourage the recognition of the ecosystem of startups, and coordinate diversification initiatives.

Through this approach, the Group’s aim is to implement ambitious development projects that will generate opportunities for growth or differentiation from its competition, at a time when digitalization and growth in network capacity and connectivity create major prospects for innovation.

Vivendi has achieved a number of accomplishments which it will seek to multiply, by combining them with forward-looking initiatives to identify leading growth sectors for the Group in coming years. These accomplishments include UMG’s launch of Power Music in Brazil for GVT subscribers, Maroc Telecom Group’s offering of The Universal Music Plan in partnership with Universal Music and MTV , as well as the marketing of Canal+ Group subscriptions at SFR stores.