*This is a living document and changes might occur depending on the future development of the business

Business Strategy “AICI TV” Network

NARRATIVE INTRODUCTION

Based on the TNS Moldova Quantitative research “Audience of Regional TV stations in Moldova” 2010, Moldovans get their information from television – 84.2 percent of households having at least one television set. But only the state owned public broadcaster, Moldova 1 channel has nationwide reach, accessible by 99 percent of the population. Even if Moldova 1 was fulfilling its public service mission, it would still not meet all of the local information needs. But Moldova 1 is widely

censured for its adherence to the government’s political line and failure to offer the objective, balanced news, citizens need.More than a dozen local stations operate in Moldovan towns, and these have the potential to become not only sources of local news and information lacking on the national channels but also an alternative to the state broadcaster. However, they are vulnerable in many ways: politically tinged licensing, non-transparent municipal funding, personal-agenda motivated ownership, weak editorial teams, and little experience in managing media businesses, poorly developed local advertising and disinterest from national advertisers, among others.

Formalization of a local television station network would capitalize on these prospects. Together, stations could develop and share better content, meeting “own production” and language requirements, while strengthening their own capacities to offer professional local news. A network could attract advertising offered at group rates with one-buy convenience. It could stand firmer against political pressures, especially if able to attract a loyal and active public following.

First steps in promoting media services in Moldova was taken by different international organizations by promoting and encouraging people to get involved in the media life of Moldova. One of those steps was taken by IREX Media program in Moldova by creating the “AICI Network”. The Broadcasters Association “AICI Network”, is a non-profit association, non-governmental (NGO), a legally registered company , created by the decision of the founders, to coordinate the activities;, to represent and protect the professional standards, to produce programming, sale of commercials, and to protect the technical and scientific interests of its members who were admitted to the Association based on their activity in the field of TV broadcasting. AICI Network’s Vision is to be close to each TV viewer in all regions of the country, creating an atmosphere of excellence.AICI Network’s Mission is to be independent, transparent, fair and profitable and at the same time, loyal to the public who watches AICITV. Short-term Strategic goals: obtain national coverage of at least 50% by the end of 2011 and 90% by the summer of 2012; broadcast a full 8 hour program schedule by the end of next year and of 16 hours starting the year after; using several distribution channels (fiber optic, satellite and over the air); continuing the improvement of the website making it more functional and attractive.

“National coverage is a monopoly of the government. There are few alternative sources of information in rural areas,” –- local station manager. (2008 Media Sustainability Index)

Sources of News

The long-term goal is to become a national TV network accessible to each and every home in Moldova.

TARGET MARKET

Republic of Moldova is a small country situated in Eastern Europe. The total population is 3,419,403. The potential market for the media network is of the age group 12-74 which is 2,841,149 people and the majority of the population lives in rural areas of Moldova. Based on the TNS Quantitative research1 which covered 24.1 % of population between 12-74 years old, we see that 84.2% of respondents use TV for watching the news and 29% from the internet.

Based on the data from Internet World Stats2 for 2010, 30% of the population (1,295,000) are using internet daily compared with 10.6% in 2006, which is a great advantage and opportunity for AICI TV network.

If in only 4 years the percentage of people using internet has increased by 20%, the future trends can be expected to continue increasing. As discussed above, the news and, general interest programs and movies will be broadcast on TV as well as on the internet through the website (www.aicitv.md) which will offer to the people the access to news 24/ hours per day. The market is much bigger than just the active population in Moldova. Moldovan people which are working abroad are a potential market also, mainly because they are interested in learning what is going on in their own country.

The advertising market is developing rapidly: it was estimated at $23 million in June 2007, a nearly 72 percent increase from 2006. About 57 percent goes to television, but almost none to the local markets, with major advertisers preferring national or Chisinau coverage and potential local advertisers virtually untapped. AICI Network targets two types of clients, the advertiser and the viewer: 1. Business to business (B2B); businesses (the advertisers), NGOs and other organizations in need of promotion, TV services or joint programs;2. Business to Consumer (B2C); the viewer or end user or consumer who is interested in watching good programs and movies, trustworthy and transparent news.

1 Audience of Regional TV stations in Moldova, Quantitative research by TNS Moldova, 07th, July 2010 2 http://www.internetworldstats.com/euro/md.htm

MARKETING PLAN

Product Description

The AICITV network has many unique and interesting programs.

I. The daily newscast consists of news from the regions as well from the capital city. Each member of AICI Network is responsible for providing news to the Network Operations Center, after which the newscast is produced and broadcast at the same time in the regions and on the www.aicitv.md website.

II. The following AICITV’s programs are produced by the regional stations as well as the Network Operations Center:

1. Trasee (Trails) program.

The main goal of this weekly 30 minute program is to discover  Moldova as an ingenious, optimistic and dignified country, though its people, places and events that deserve attention. “Trails” is produced by the Network Operations Center in Chisinau, but each station has the responsibility to find interesting stories, situations and people in the regions which deserve to be known, to be listened to and to learn from.

2. “Consumed in Moldova” program.

This informative program analyses the quality of consumer products and shows the process of making them. The program targets all demographics, since it’s both informational and entertaining, between the ages of 17 – 65, 70% - women and 30 - % men.

3. “I have the right” program.

This monthly 30 minute program illustrates common human rights violations and offers solutions to them. Based on the SWOT technique, 4 experts analyze the Strengths, Weaknesses, Opportunities and Threats for finding the solution for the violation. The program is dynamic, with short interviews and presenter’s comments.

4. “Between the Dictionary and the Street” program .

A program that teaches people how to speak Romanian correctly. The main idea is to focus on

the most common mistakes made in everyday life. It is easy going and funny, it shows people on the street making mistakes and laughing at themselves. Broadcast daily and produced by the Network Operations Center in Chisinau.

5. “Events of the day” program .

Every day of the year has its own history. It is very interesting to learn what happened in the same day many years ago. Were there events that changed the world? And what is happening today?

6.“Generation against” program.

The main goal of this program is to learn what the problems of the young generation are and to find solutions on how to overcome them? “Generatia contra” is the program that debates the most relevant and important problems faced by the young generation and offers solutions.

7. “In the orchard of love” program. It is a weekly program that reveals authentic folklore through

interviews about performers, bands, dynasties of popular music masters and traditions. Program topics: “Aniversaries of folklore bands”, “Traditions and customs of calendar holidays”,”Customs and traditions in national cuisine”,”Popular masters”, “Folklore performers from Moldova and abroad”,”Popular dance traditions and continuity”,”Village holidays”, “Folklore for children”,”Painting eggs on Easter”,”Wedding customs and other family traditions”, “Popular theatre during winter holidays”, etc.

8. “Trips to home” program.

“Trips to home" is a program about destinies: successes and failures. A program which tells unbelievable life stories of people that changed their lives through bold actions. Each Saturday, the heroes of our program will open their hearts and tell the stories that marked their lives. You will be able to learn success stories, but also

tragedies; unique cases how to fight deadly diseases as well as amazing achievements.

9. „ ”The art of health” program .

Every woman wants to be beautiful regardless if she is relaxing in the spa or choppings wood and carryingies buckets of water.  This monthly 30 minute program encourages women to care forof themselves. The show tackles topics related to women’s health and beauty. It is produced and broadcast monthly.

Place. Distribution strategy

“AICI” Network is the first regional network which has regional news and programs produced by regional TV stations. In network’s news and programs one can find information from: Cimislia, Ceadir-Lunga, Comrat, Congaz, Criuleni, Drochia, Dubasari, Orhei, Soroca, Soldanesti, Ungheni and Chisinau. Recently AICI TV started its broadcasts on SUN TV Network on the INFO Channel and on Accent TV in Chisinau and Balti regions. At this moment AICI TV Network can be seen incovers 18 cities (~ 500 villages) around Moldova with a population of around 2, 044, 626 people, or 60% of the population of Moldova. The distribution strategy also includes increasing theour coverage in Moldova to be able to reach every person in Moldova and more and not only.

The network’s website www.aicitv.md offers the possibility to watch the news and programs anytime the person wants and has time. Additionally each Network member will hasve a special portal page on the website which will contains information about each region such as: history, traditions, places to visit and other interesting and important information. Also the website has the goal of informing all Moldovans in the country and abroad. Due to the harsh economic situation there are a lot of citizens abroad working to help their families.? They have the right to be informed, and to have the most important news from the capital but also from their region, from their home. AICI TV aims to reach each Moldovan in the country or abroad and to bring the home to each person!

Promotion strategy

1. INTERNET BANNER PLACEMENT and CROSS PROMOTIONSInternet cross promotions have been executedwill be developed by selecting the most popular websites that have more than 1000 unique visitors per day. According to the website statistics placed on www.metrica.md , the most popular sites in Moldova for the selected target audience are www.odnoklasniki.md , www.unimedia.md, www.facebook and, www.moldova.org .

2. POSTER PLACEMENTADVERTISING IN THE PUBLIC TRANSPORTATION Public transportation is very popular in Moldova and advertising in the buses and minibuses is very effective. This promotion advertised the programs, TV stations and the regional footprint of the AICI Television Networkwill be run by a paid subcontractor in charge of placing, changing and reporting the work. The posters in the public transportation will be changed twice. As soon as the posters are placed, a complete photo report will be sent to AICI representative.

3. SOCIAL MEDIA Social media are media for social interaction, using highly accessible and scalable communication techniques. Social media is the use of web-based and mobile technologies to turn communication into interactive dialogue. Social networking now accounts for 22% of all time spent online. During the launch campaign interaction between the users of www.facebook.com, www.odnoklassniki.ru and other social media will increased the awareness of AICI TV as well as provided positive feedback about the website, newscast and other general entertainment programs broadcast on AICI TV.

4. OUT DOOR PROMOTIONOutdoor promotion has a big advantage reaching a bigger percentage of the population due to the fact that every person can see it from a child to an adult.. The Outdoor wasill be placed at the entrance and exit of the network’s member’s cities of coverage as well as in Chisinau where there werewill be placed several outdoor promotions. The main goal of this promotion wasis to promote the AICI brand, to inform people about the Network and convince them to watch the news and other interesting programs.

Collaborations and PartnershipsAICI TV has contracted several consulting companies for conducting surveys, statistics

and other reports about AICI TV recognition, likeness and awareness in the capital as well as around Moldova. AICI TV works with AGB3 Company which provides everyday ratings for AICI TV network. The AGB data is interpreted by D3 a consulting company which offers consulting services/surveys elaboration and organizations. Another important partner for AICI TV is TNS4 Company which conducted several market studies and surveys for each TV station – member of AICI TV Network as well as for the Network as a whole.

Over a year of collaboration with AGB, TNS and D3, brought the AICI Network a lot of useful information, insights and data allowing the team to learn the needs and desires of the viewers and to learn . Be aware of about the brand awareness of AICIthe brand and the programs as well as to learn how to use the data for marketing and sales processes.

3 http://www.agb.md/ - AGB consulting 4 http://www.tnsglobal.com/global/europe/moldova/ TNS Moldova AICI TV partner

Also the collected data has helped each stakeholder understand the importance of ratings, surveys and reports conducted by different prestigious companies. Each local TV station builds its future strategies based on the researchreceived data, assuring a better compliance with needs and whishes of the clients.

Additionally the reports and surveys results are used in sales presentations and offers to different potential clients which present AICI Networks as a strong reason to advertise.starting company, because it values investments and people’s opinions.

AICI TV TeamAICI TV has a very talented and professional team. Each member of the team has

proven experience in TV and journalism fields as well as other professional experience which helps in achieving the final goals of the business. The central team of AICI consists of an Administrator, Text Editor and Technical Director/Cameraman, three TV producers, two Video Editors/Cameramen, a Correspondent/Presenter, Sales Person, Traffic and Master ControlDiGi TV Assistant and , Chief Accountant. Additionally AICI TV network hired seven production consultants to help in producing the general interest programs, shows and newscast.

Besides the main team, each member of the association has its own team of video editors, cameraman, presenters, and correspondents and producers, working in regions to collect and produce news as well as programs and reportsentertainments about local places, traditions, values and people.

Bonuses and RewardsThe management team has planned a rewards program for its team based on their

contribution to the achievements and involvement in the company’s goals achievement. The sales person is planned to receive 5% bonus from sales revenue starting with 2012.

All additional rewards to the team will be managed by the Administrator of the Network depending on the successes and achievements of a team member. The planned budget includes an amount of $2000 for quarter of the year which will be awarded to the team after a short evaluation (written or verbal).

FINANCIAL SUMMARY

AICI TV Network’s financials depend on the following key assumptions:

General assumptions:

1. Focus on initial eleven regional markets and partially Chisinau (Orhei, Cimislia, Cantemir, Drochia, Rezina, Soroca, Balti, Ungheni, Comrat, Congaz, Ceadir-Lunga) for 2011

2. Acquire modern broadcast equipment for production and cover some operational costs from the MPM grants in 2011

3. Continue to sign contracts with additional cable television companies who use fiber optic/digital transmission

4. As an additional channel of distribution, to network with satellite companies, like FOCUSAT

5. Program schedule of 8 hours per day achieved in 2012 - maintain quality general entertainment programming necessary to achieve assumed local revenue shares

6. AICI Network’s Coverage2011 50% of Moldova's population covered2012 75% of Moldova's population covered2013 100% of Moldova's population covered

7. Additional distribution in 2012 most likely Cahul and other new regions

8. National Inflation 7.90%Revenue assumptions:

9. Equipment grant - $ 160, 750; production grant- $ 24,500; news room equipment grant -$ 68,750; business grant - $ 17,500.

10. In 2012 AICI Network will receive additional grants of $ 200,00011. The price per spot in the revenue model will increase by 50% by year 201512. First AICI TV Network revenues expected in May-December of 2011

Expenses assumptions

13. Sales assistant to be hired in August 2011, administrative assistant to be hired in September 2011

14. The salaries of the Lawyer, Sales Manager and Administrative Assistant are estimates, based on the current market price

15. Sales person will receive 5% bonus from sales revenue starting with 201216. Each quarter $2000 for bonuses/rewards17. Also the salaries for the additional staff is calculated starting with September18. Administrative expenses will increase by 10% in 201219. In 2014 the administrative expenses including the staff expenses will increase by

50% due to an increase in staff hired at the Network