Digital Terrestrial Television in Italy The strategy of commercial broadcasters in the digital transition. Sarajevo 30 march 2006
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1 0 Digital Terrestrial Television in Italy The strategy of commercial broadcasters in the digital transition Sarajevo 30 march 2006
2 1 DTT is enjoying a considerable success due to: Government effort (ca. 300 Mln ): Open Legislation (frequencies trading) Public subsidies to STB s (open standards and Interactive) Big Investments from private Broadcasters: networks + contents (more than 600 Mln ) 8 national DTT multiplexes New contents with interactivity and Pay Per View services The DGTVi Role Coordination between all broadcaster, producers and distributors Interoperability A unique Body to deal with Institutional Entities
3 Coverage of DTT signal is growing rapidly Multiplex TNT en Italie¹ Couverture des Multiplex Opérateur Couverture de la population N. Mux Couverture de >70% >70% >70% 70% Chaînes locales > % H3G Canale %(?) >50 N.A. Note: les chaînes locales (actuellement plus de 70) ne sont pas incluses Sources: DGTVi; Analyse BAH Mediaset and RAI have recently announced the start up of 2 DVB H MUX 2
4 3 Terrestrial TV plays a unique and non-replaceable role in Italy TV Platform Penetration in Italy (year-end 2005) Characteristics of Terrestrial TV Terrestrial TV is present in all households 12 national and 600 local channels 100% 75% 50% 99,0% 21 million terrestrial households 95% of audience is concentrated on terrestrial channels Terrestrial TV is a non-replaceable platform for public service and commercial broadcasters (both national and local) 25% 0% Analogue Terrestrial 19,5% Digital Terrestrial 22,8% 5,7% 17,1% Pay 1,0% Digital Satellite Free* IPTV Unique media for 5 million families (older and low income part of population) Cable and IP-TV penetration negligible Free satellite not suitable for local TV (cost reasons) and national broadcasters (rights protection) (*) Includes STB used for piracy reasons up to 2 years ago Source: Federcocomin, Auditel, Sky Italia, GkF, Fastweb, Booz Allen analysis
5 DTT is enjoying success in the Italian consumer electronics context 4 DTT STB sales (97% are interactive) - 000, at end of month Drivers for DTT success 1 Content offering (free and pay) Availability of advanced receivers at low prices 2 3 Accessibility Horizontal and interoperable STBs (MHP, multiple CAS) Plug and Play Affordable free and pay offering % Set top Boxes sold without subsidies January 2004 July 2004 January 2005 June 2005 January 2006 Sans subv. 46% Avec subv. 54% Source: GfK;
6 5 Today in Italy, DTT STB s cost below 100, and are more advanced than STB s in other European countries 390 Price evolution of DTT STB s in Italy (end price including VAT) Comparison of STB s prices in Europa (end price including VAT of cheapest model available) Jan 2004 Mar 2004 Sept 2004 Dec 2004 Apr 2005 Today Source: GfK Marketing Services Italia; Market survey, Booz Allen analysis Italy Spain UK Germany France MHP CAS Modem (V.90) MHP -- Modem MHEG CAS
7 DTT viewers have free access to nearly 30 TV channels and to two different pay-perview services Current DTT offering Main analogue channels in simulcast Sport and sport news i i i i i SPORT i i i SOLOCALCIO News: financial, international, Kids Shopping Music channels i i i i Cinema news Public service channels Religion Pay per View services i i i i i i with interactivity Channels in simulcast New DTT channels New pay DTT services Note: Rete A multiplex (broadcasting All Music, The Club, Camera, Senato ) is not included because its current coverage is below 50% Sources: DGTVi; Sat-Net; Booz Allen Hamilton analysis 6
8 7 and a multitude of more than 100 interactive services and additional free to air contents DTT Offer Information on programs Live Interaction Double Audio Games Additional contents Programming Guide Italian DTT Information services Service (commerce) Interactive advertising Super Teletext Financial info
9 Case Study: Boing et Rai Utile New Kids Channel Boing is addressed to 2 to 14 years old children Not only cartoons but even series, documentaries and movies Boing is a Joint Venture between Mediaset and Turner Broadcasting System New educational interactive games 5 main issues in cooperation with Italian Pubic Administration Consumers Environment Job Family Culture News Channel on DTT Multiple choice of interactive applications Source: Mediaset, Rai, Analyse BAH 8
10 In addition, first trial T-Government services are present on DTT Public Administration Healthcare Local public service portals Sources: Rai; La7; Mediaset 9
11 10 T-Government: Service Structure Example Illustratif TV Access through Remote control Friendly User Service Public Administration Job Education Tourism Health Care Environment
12 Simple PAY TV model, ( 3 5 per event instead of the 50 per month of a satellite subscriber) 1 Purchase of a pre-paid card at the shop Serie A Teams on DTT 4 Regular Replacement (Mediaset) PPV Prépaid on DTT 2 Access to the premium content (through remote or call center) 5 per match Further Premium contents 3 Card Recharge (La7) Call Center / Web / Voucher Blockbuster Movies, Film, Concerts, Reality, 2-3 per «event» Source:, Mediaset, Analyse BAH 11
13 DTT is an extension of today s analogue/free television, capable of competing against other digital TV platforms TV platform positioning (Italy) Offering and costs for the end user PAY SUBSCRIP- TION PAY A LA CARTE FREE MULTI- CHANNEL Analogue terrestrial Digital Terrestrial (DTT) Cable + TV over DSL Satellite Ca. 10 Ca Ca > 100 Number of available TV channels Source: Booz Allen Hamilton analysis 12
14 13 Main Issues in the short future Regional Switch-Off DVB-H first trials
15 14 Regional Switch off: Sardinia and Valle d Aosta DTT ready on July 2006 Sardinia Switch-Off Schedule Gradual Switch off : DTT Broadcasting in the major towns, (red on the map) Final Switch off: DTT Broadcasting all over the Region (white on the map) Valle d Aosta 31 July Dec K households 650 K households
16 15 STB s sales increased in the two Regions DTT Households (31 august 2005) Sardinia 40,000 Valle d Aosta DTT Households (3 march 2006) 333,154 1,500 27,601 DTT Households Pénétration 57,5% Sardinia 51,3% Valle d Aosta Total 41, ,755
17 Preparing to the Switch-Off in Sardinia 16
18 17 Broadcaster et Telco are testing the Mobile TV on DVB H Return channel possible through 3G Free to Air Channel Thematique Channel Premium Contents Services
19 18 DTT can succeed if all the Operators are involved in the process Government Broadcasters Industry
20 19 Challenges for the successful transition to digital TV 1. Role Public Service 2. How to improve the attractiveness of the free channels 3. Role of new services (DVB-H, HDTV)
21 20 Danke Well! Egidio Viggiani Secrétaire général DGTVi Mobile Téléphone Téléfax
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