Mediaset and Digital TV

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Mediaset and Digital TV
Rome, 12 April 2007
2
Agenda

• Digital TV in Italy
• Italian DTT
• Mediaset and digital TV

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Terrestrial TV is the main TV distribution
platform in Italy most households receive still
analogue terrestrial television
TV Platform Penetration in Italy (year-end 2006)

• All households have access to Terrestrial TV
• 23 million analogue terrestrial households (99)
• 10 national and 600 local analogue terrestrial
  channels
• 95 of audience concentrated on terrestrial
  channels
• Other platforms have limited penetration
• Cable and IP-TV penetration negligible
• Only 25 of total households have satellite TV

24.6
Free
Pay
Sources Federcocomin Auditel Sky Italia GkF
Fastweb Booz Allen Hamilton analysis
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Positioning of digital TV platforms in Italy
Satellite
Cable TV over DSL
PAY SUBSCRIP-TION
PAY A LA CARTE
Digital Terrestrial (DTT)
Offering and cost
FREE MULTI-CHANNEL
Analogue terrestrial
Ca. 10
Ca. 25 - 50
gt 100
Ca. 50 - 100
Number of available TV channels
Source Booz Allen Hamilton analysis
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Contents and offering models Italy
Soccer
Blockbuster movies
Soccer
Content value
Video on Demand
News
38
55
0
10
15
22
Offering model (monthly ARPU in )
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Agenda

• Digital TV in Italy
• Italian DTT
• Mediaset and digital TV

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Many broadcasters have been investing on DTT
Network Operator
N. Muxend of 2006
Players who invested on DTT

• 6 national network operators (10 Muxs)
• Over 80 local TV broadcasters
• 15 free content providers
• 2 providers of pay TV services
• 15 interactive channels and over 100 interactive
  services on air in the last 2 years
• 2 mobile TV networks
• 3 mobile TV operators

2
2 (1 DVB-H)
2
1
1
Hutchinson
1 DVB-H
Sources DGTVi FUB Booz Allen Hamilton analysis
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DTT enjoys a considerable success
Drivers for DTT success
DTT STB penetration - 000, at end of month -

• Content offering
• Free channels
• Premium contents (pay per view)
• Interactive services
• Availability of advanced (interactive) receivers
  at low prices
• STB state incentives (in 2004-2005)
• STB price cut (from 300 in 2004 to less than
  100 in 2007)
• Accessibility
• Plug and Play installation
• Affordable pay offering

1
2
3
Sources GfK Booz Allen Hamilton analysis
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On March 1st, 2007, Italian switch-over started

• On March 1st, 2007, Rai and Mediaset stopped
  analogue transmissions on Cagliari of
• Rai Due
• Rete 4
• QOOB
• These three channels are now available only on
  digital TV platforms
• Next Monday Aosta
• Local households
• can use a 70 subsidy to buy a digital TV
  receiver
• receive a letter by the Italian Minister of
  Communication about switch-over
• can call a dedicated free-toll number

April 15, 2007
March 1, 2007
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Italian DTT allows more than 30 free channels, 2
PPV services and 9 radios
National digital TV offering (29 free-to-air
channels and 2 PPV services, 9 radio channels)
National analogue TV offering (10 free-to-air
channels)
Canali free
PPV
Radio
Sources DGTVi Company reports and press
releases
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Agenda

• Digital TV in Italy
• Italian DTT
• Mediaset and digital TV

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In the last 3 years Mediaset developed an
innovative digital TV strategy on the terrestrial
platform
Mobile TV
Free multichannel
Pay TV
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Mediaset is a vertically integrated broadcaster
with operations in Italy and Spain
Mediaset Group
R.T.I. SpA
Videotime SpA
Elettronica Industriale
Publitalia SpA
Italy
26,280 hours of scheduling, 48.1 of which in
house production
Publiespana SAU
Gestevision Telecinco SA
Gestevision Telecinco SA
Spain
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In Italy, Mediaset is a leader in the free-to-air
arena, and is becoming an important player in the
Pay-TV business
(1) Audience 24h, target 4-64 years (2)
Includes revenues from license fee (3) Does not
include revenues from Spain Sources Auditel
Nielsen AGCOM Mediaset Booz Allen Hamilton
analysis
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Mediaset has leveraged the DTT platform as an
opportunity to innovate and reinvent the
Television core business
Innovations introduced by Mediaset
New Digital TV business models
1
2
3
4
Commercial iTV - The Super TV -
Multi-channel - Free Targeted Channels -
DVB-H- The mobile TV -
Pay TV - The Pre-paid PPV model -

• Enhancement of commercial TV with interactivity
  to
• Innovate TV formats / digital contents
• Propose new advertising formats
• Introduce new services

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The SuperTV is based on the Plus of
interactivity
1.) The SuperTV
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New digital TV business models introduced by
Mediaset Multichannel
Innovations introduced by Mediaset
New Digital TV business models
1
2
3
4
Commercial iTV - The Super TV -
Multi-channel - Free Targeted Channels -
DVB-H- The mobile TV -
Pay TV - The Pre-paid PPV model -

• Free target generalist channels. i.e.
• Kids channel
• Interactive tele-shopping channel
• Third party channels carriage

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A kids channel, independent news channels and a
teleshopping channel are now broadcasted by
Mediaset DTT network
2.) Multichannel
Third party channels (carried by Mediaset)
Mediaset channels

• International news
• General News
• Movie and TV production news

• Free kids channel with general contents
• Cartoons
• Movies
• Others
• Games (interactive)
• Interactive teleshopping channel

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Digital TV, internet and mobile TV Boing
multimedia strategy
2.) Multichannel
Boing is available also on mobile phones, thanks
to agreements with Tim and H3G
The new website BOINGTV.IT offers content
information as well as games and news for kids
and their families
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New digital TV business models introduced by
Mediaset Prepaid PPV Model for access to
Premium contents
Innovations introduced by Mediaset
New Digital TV business models
1
2
3
4
Commercial iTV - The Super TV -
Multi-channel - Free Targeted Channels -
DVB-H- The mobile TV -
Pay TV - The Pre-paid PPV model -

• Premium Contents a la carte no subscription,
  accessible prices

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Mediaset Premium - a simple and powerful
modelthat allows everybody to access premium and
quality contents, with no subscription and in an
anonymous way
3.) Pay per view
B
A
Select and buy the match
Buy the card in a shop and insert it in the STB
C
D
Recharge the card (buying a voucher) once credit
is exhausted
Enjoy the match!
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A wide range of content is offered on Mediaset
Premium
3.) Pay per view
Soccer
Movies and TV series
Reality
Theatre, opera and concerts
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Mediaset Premium results
3.) Pay per view
2.574.000
More than 2 Million end users estimated to enjoy
Mediaset Premium services
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New digital TV business models introduced by
Mediaset DVB-H
Innovations introduced by Mediaset
New Digital TV business models
1
2
3
4
Commercial iTV - The Super TV -
Multi-channel - Free Targeted Channels -
DVB-H- The mobile TV -
Pay TV - The Pre-paid PPV model -

• Mobile TV service operator and content provider
  on DVB-H TV receivers gt First concrete
  implementation of digital dividend

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In Italy two business models on Mobile TV
emerged, with Mediaset playing an important role
in both
4.) Mobile TV
Positioning along the Mobile TV Value Chain
Content Provisioning
Packaging
Trans-mission
Accessto Customer
Case A MNO-Broadcaster partnership (TIM/VF-Medias
et)
Mediaset
Others
TIM
TIM
Vodafone
Vodafone
other
other
Mediaset is carrier for all telcos and packager
of its channel bouquet.Mediaset channels are
available to all MNOs
Case B MNO Integrated model (H3G)
H3G
Mediaset
H3G operates along the entire value chain
Note Additional content is provided by 3rd
parties
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In particular, Mediaset developed an open
platform enabling TIM and Vodafone to offer TV
contents to their customers with minimal upfront
investments
4.) Mobile TV
Other Contents
Mediaset (Network Operation)
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Mediaset contributes key content to the operators
4.) Mobile TV
Mediaset content contribution
Canale 5
Best of MediasetNetworks (simulcast)
Rete 4
Mediaset Premium PPV (Serie A, events, ...)
Italia 1
Boing (Kids ch. in JV with Turner, DTT exclusive)
Mediaset Premium PPV (Serie A, Ch. League, ...)
Mediashopping
Maurizio CostanzoShow (DTT exclusive)
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In summary, Mediaset has been heavily
contributing to digital content innovation and to
digital TV market development
Areas of Innovation driven by Mediaset

• Innovation of free TVenhanced commercial TV,
  new free channels, new digital contentsnew
  advertising models

Innovation of pay TVno subscriptions, pay TV
competition on an open platform
Technology Innovation usingopen DVB standards
MHP, DVB-H, High Definition
Innovation of Information Society Services for
everybodyi.e. T-government