18 July 2012Media in Italy and the digital challengePart 2The Italian Broadcasting Duopolyand Digital Televisionby Davide ...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   The Mapping Digital Media project   I...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   Key legislation in the Italian TV sec...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   The ‘Gasparri’ law   With the „Gaspar...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   The ‘Decreto Romani’   The Legislativ...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012                         Three leading g...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   Duopoly or oligopoly?                ...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   What changes with digital terrestrial...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   Who benefits from digital tv?   Howev...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   Frequencies for the same players   Th...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   A ‘beauty contest’ for frequencies   ...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   Frequencies at auction   The heated d...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   Auction: risks and benefits   Auction...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   The final chance to open the market? ...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   The need for a new regulation   It is...
The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012   Useful links   Open Society Foundatio...
Thanks!If you appreciated the presentation forward it to your friends                    and support our project!         ...
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The Italian Broadcastin Duopoly and Digital Television (part 2)

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Despite the advent of digital terrestrial technology, Italian television is still dominated by the so called "duopoly" between the public service broadcaster RAI and the privately owned broadcasting giant Mediaset. This situation partially results from the way digital frequencies have been allocated, as denounced by different European institutions.
This slide-show is part of the project "Media in Italy and the digital challenge", which quattrogatti.info has carried out with the support of the Open Society Foundation. All episodes are available on quattrogatti.info!

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Transcript of "The Italian Broadcastin Duopoly and Digital Television (part 2)"

  1. 1. 18 July 2012Media in Italy and the digital challengePart 2The Italian Broadcasting Duopolyand Digital Televisionby Davide Morisiand Gianluca MartellianoWith the support of
  2. 2. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 The Mapping Digital Media project In early 2011 the Open Society Foundation (OSF) launched the Mapping Digital Media project to examine the global opportunities and risks created by the transition from traditional to digital media. Among the 60 countries in the study, the situation in Italy was analysed in a detailed report published in October 2011. Thanks to funding from OSF quattrogatti.info has developed a series of slide-shows and videos highlighting key aspects of this report as well as new data and analysis. In this second presentation we concentrate on the Italian broadcasting duopoly and digital terrestrial television. www.quattrogatti.info
  3. 3. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 Key legislation in the Italian TV sector „Mammì‟ Law (1990) Regulates the media system by defining „Maccanico‟ principles valid for Law (1997) the first time also for Sets fixed limits for TV operators (a „Gasparri‟ Law (2004) private media Confirms the „Mammì‟ companies – such as single company cannot control more Law‟s principles, but fairness and accuracy changes market regulation. of information1. than 30% of the revenues of the entire TV market).1. The Mammì Law has often Let’s focus on the ‘Gasparri’ „Romani‟ been criticised, because it did not affect the situation of Law and the ‘Romani’ Legislative Italian television. On the Decree (2010) contrary, it confirmed the Decree… rising power of the new commercial TV stations owned www.quattrogatti.info by Berlusconi‟s Fininvest.
  4. 4. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 The ‘Gasparri’ law With the „Gasparri‟ law a single media Revenue limit for a company is allowed to control up to 20% 2.577 (mln €) single company: of the revenues of the so-called = 30% ‘Maccanico’ Law Integrated System of Communications Television (not in force anymore) Total Revenue (2009): (SIC), which includes a wide range of 8.589 (mln €) ‘Gasparri’ Law sectors (television, press, radio, internet, publishing, cinema and advertising). 4.599 Taken all together, these sectors form a (mln €) huge market, almost three time as big = 20% as the market defined by the previous „Maccanico‟ Law. In 2009, a single media company could control up to almost €4.6 Integrated System of billions without infringing the law2. Communications (SIC) Total Revenues (2009): 22.993 (mln €) Source:2. This is also one of the reasons why the „Gasparri‟ Law has been severely Agcom, Relazionequestioned. By the defining the market in such a broad way, the law paved annuale 2011the way for strengthening the power of both Rai and Mediaset (see for www.quattrogatti.infoexample Cassese on Il Corriere della Sera, 7 April 2004).
  5. 5. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 The ‘Decreto Romani’ The Legislative Decree no. 44/2010 (the so- Foto di itBox24 called Decreto Romani) confirms the progressive deregulation of the radio and television sectors, and introduces new limits to TV advertisements: • for pay-per-view broadcasting (a sector in which Sky Italia is dominant), the decree foresees the drastic reduction of the amount of advertising permissible per hour; • on the contrary, the decree raises the ceiling for free-to-air commercial television, where Mediaset dominates. As stressed by the OSF, these rules seem “unjustified as regards competition, and difficult to understand except in purely political terms”3. www.quattrogatti.info3. See Open Society Foundations, “Mapping Digital Media – Italy”, page 83.
  6. 6. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 Three leading groupsPartially as a consequence of this legislation, the Italian media landscape is stilldominated by three corporations: Fininvest (owned by the former premier SilvioBerlusconi, Rai (the public service broadcaster), and Sky Italia (owned by RupertMurdoch‟s News Corporation). As the chart shows, these companies outpace all otherItalian media groups in terms of revenues. 3500 3266.89 3000 2724.42 Main Italian media companies by revenues (2010) 2630.76Revenues (millions of euors) 2500 Sum of the revenues for the TV, radio, press, magazine and online publishing markets (revenues deriving by other 2000 sectors, such as telecoms, are not included). Source: author’s calculations based on Agcom data. 1500 1008.76 1000 834.67 500 367.74 241.64 193.31 160.17 0 FININVEST RCS (Corriere della CORPORATION compartecipazione RCSLESPRESSO RAI NEWS Sera) + FINELCO, GRUPPO (Radio 105, GRUPPO 24 ORE CALTAGIRONE RMC, Virgin) MONRIF TELECOM ITALIA (Mediaset + Mondadori + Monradio) + radio) (tv (Sky Italia) (La Repubblica, Radio Capital, Radio 24 Ore + Radio Messaggero, Il Mattino) (Il Sole Deejay) (Il 24) (Il Resto del Carlino, Il Giorno, La Nazione) Mtv) (La7 + www.quattrogatti.info
  7. 7. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 Duopoly or oligopoly? Audience Others; share by The recent rise of Sky Italia‟s revenues 25,5% TV has been seen as the end of the long- La7; Rai, 38.3 companies 4% % lasting Rai-Mediaset duopoly. However, if we look at audience shares, Sky Sky; 5% reaches only 5% of the entire TV Mediaset 35,2% audience. Audience In addition, audience shares are a Rai 1; share by TV 21,6% channels more effective indicator of media‟s Others; 30,50% capacity to reach TV viewers and La7; Rai2, 7% influence public opinion. Therefore, 3,3% the Rai-Mediaset duopoly still Rete 4; Rai3; 7,9% appears as a distinctive feature of 5,9% Canale 5; 16,7% Italian television, notwithstanding Italia 1; 7,10% Sky‟s quick rise. Source: Auditel, February 2012 www.quattrogatti.info
  8. 8. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 What changes with digital terrestrial tv Nevertheless, the shift to digital terrestrial television - which is expected to be completed by the end of 2012 - has been changing Italian television. Digital technology allows to have more Tv channels – thanks to the “multiplexing” technology – and, as a consequence, more content available. Clipart by johnpwarren In 2010, 35 new TV channels - including news outlets such as Rai News, Class News eand Repubblica TV – have added up to the existing 11 national channels. www.quattrogatti.info
  9. 9. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 Who benefits from digital tv? However, the same two companies have profited from the increase in channels, because Rai and Mediaset continue to control more than half of the channels. Therefore, as underlined by the OSF, digital terrestrial television has not managed to break the Italian broadcasting duopoly yet. Number of analogic tv channels Number of analogic + digital channels Other Rai Other Rai analogic 3 digital 15 channels channels 3 15 Other analogic Telecom channels Italia 3 Mediaset Mediaset Media 3 Telecom 9 2 Italia Media www.quattrogatti.info 4
  10. 10. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 Frequencies for the same players The way frequencies have been allocated has contributed to mantaining this situation. Spectrum policy has favoured TV leaders, as denounced by: Rielaborazione su foto di Arenagroove • The infringement procedure against Italy for violation of the EU rules on electronic communications opened, opened by the European Commission in 2006, • And two rulings on Centro Europa 7 by the European Court of Justice (2008) and the European Court of Human Rights (2012). www.quattrogatti.info
  11. 11. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 A ‘beauty contest’ for frequencies The latest example of these spectrum policies is the so-called “beauty contest”, declared by the former Minister Romani in July 2011. According to this procedure, six new Clipart di secretlondon frequencies would have been allocated for free to TV operators on the basis of specific requirements. Once again, the beauty contest was designed in a way which was extremely likely to favour the existing leading companies6. Moreover, this procedure would have gifted a very few players a resource which the European Parliament has defined as a “scarce public resource that has an important public and market value”7.6. On the beauty contest see Open Society Foundation, “Mapping Digital Media – Italy”, pag. 85 www.quattrogatti.info7. EUs telecoms package, DIRECTIVE 2009/140/EC , 25 November 2009.
  12. 12. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 Frequencies at auction The heated debate which followed the approval of the beauty contest led the current Government to drop it and auction off all the frequencies. The call for bids will be published by the end of August and will be regulated by the Italian Communication Authority (Agcom)8. Clipart di Raffaella Biscuso In particular, the auction foresees the separation between network operators and content operators, with the aim to facilitate new operators‟ access to the market9.8. Legge 26 aprile 2012 n. 44 (art. 3 –quinquies). www.quattrogatti.info9. See Open Society Foundations, “Mapping Digital Media – Italy”.
  13. 13. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 Auction: risks and benefits Auctioning the frequencies means that now media companies will have to purchase them. According to different estimates, the auction could earn the State from 1-1.2 billion to 2.4 billion euros10. There is, however, the risk that not all the frequencies will be auctioned off, because some companies may not participate - such as telecom companies which have just bought the expensive new 4G frequencies11. Clipart di johnny_automatic In addition, Mediaset and Centro Europa 7 have both appealed against the Government‟s decision to stop the beauty contest12.10. See estimates by Mediobanca (as reported by Repubblica) and by la Voce.11. See Linkiesta, 18 April 2012. www.quattrogatti.info12. See il Sole 24 Ore, 28 April 2012 and il Corriere della Sera, 21 June 2012.
  14. 14. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 The final chance to open the market? Finally, the auction will be particularly Rielaborazione su foto di Nicola Caranti relevant in relation to recent Government‟s decisions on spectrum policy. In July 2012, the Minister of Economy allocated 19 frequencies to television companies for a period of 20 years. This decision has been severely contested, because it continues to allocate scarce public resources for free, without stimulating the entrance of new operators13. The auction, therefore, is likely to be the final chance to open up the Italian TV market, before the transition to digital television is completed. www.quattrogatti.info13. See il Fatto Quotidiano, 11 July 2012 and l‟Espresso, 12 July 2012.
  15. 15. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 The need for a new regulation It is clear that the Government needs to urgently adopt “neutral” spectrum policies. This would favour the entrance of new operators in the TV market, in addition to protecting local television, which is currently threatened by the transition to digital television. Finally, as recommended by the OSF, “the legislature should adopt clear and solid regulation for the progressive removal of the duopoly and to enable competition in the Rielaborazione da rg1024 audiovisual services market”14. www.quattrogatti.info14. See Open Society Foundations, “Mapping Digital Media – Italy”.
  16. 16. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012 Useful links Open Society Foundation, Mapping Digital Media – Italy • Report in inglese / Report in italiano, versione non aggiornata On the beauty contest: • Beauty Contest, call for bids, Ministero dello Sviluppo economico, 12 August 2011 • “Frequenze, ecco il piano pro B”, l’Espresso, 11 July 2011 • "Unasta per le frequenze del digitale tv", la Repubblica, 16 April 2012 • "Frequenze, ecco perché Mediaset preferisce il beauty contest", Linkiesta, 18 April 2012 • New call for bids: Legge 26 aprile 2012 n. 44 Regulation: • Law 223, 6 August 1990 („Mammì‟ Law) • Law 177, 31 July 1997 („Maccanico‟ Law) • Law 112/2004 („Gasparri‟ Law) • Legislative Decree 44/2010 („Romani‟ Decree) www.quattrogatti.info
  17. 17. Thanks!If you appreciated the presentation forward it to your friends and support our project! www.quattrogatti.info We thank Flavia Barca (IEM), Iginio Gagliardone (Oxford University), Giulio Enea Vigevani (University of Milan) for comments. To contact the authors : info@quattrogatti.info To participate: partecipa@quattrogatti.info

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