The document summarizes key aspects of digital television in Italy. It discusses how the transition to digital terrestrial television has not broken the long-standing broadcasting duopoly of Rai and Mediaset, which still control over half the available channels. It also examines the risks associated with the government's spectrum policies, which have favored the largest players through mechanisms like the "beauty contest" for additional frequencies. Going forward, auctioning frequencies could open up the market to new entrants but risks are still present.
The Italian Broadcastin Duopoly and Digital Television (part 2)
1. 18 July 2012
Media in Italy and the digital challenge
Part 2
The Italian Broadcasting Duopoly
and Digital Television
by Davide Morisi
and Gianluca Martelliano
With the support of
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. 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
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by Berlusconi‟s Fininvest.
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, Relazione
questioned. By the defining the market in such a broad way, the law paved annuale 2011
the way for strengthening the power of both Rai and Mediaset (see for
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example Cassese on Il Corriere della Sera, 7 April 2004).
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.
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3. See Open Society Foundations, “Mapping Digital Media – Italy”, page 83.
6. The Italian Broadcasting Duopoly and Digital Terrestrial Television – 18 July 2012
Three leading groups
Partially as a consequence of this legislation, the Italian media landscape is still
dominated by three corporations: Fininvest (owned by the former premier Silvio
Berlusconi, Rai (the public service broadcaster), and Sky Italia (owned by Rupert
Murdoch‟s News Corporation). As the chart shows, these companies outpace all other
Italian media groups in terms of revenues.
3500
3266.89
3000
2724.42 Main Italian media companies by revenues (2010)
2630.76
Revenues (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 RCSL'ESPRESSO
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 +
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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
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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.
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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
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4
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).
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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
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7. EU's telecoms package, DIRECTIVE 2009/140/EC , 25 November 2009.
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.info
9. See Open Society Foundations, “Mapping Digital Media – Italy”.
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.info
12. See il Sole 24 Ore, 28 April 2012 and il Corriere della Sera, 21 June 2012.
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.
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13. See il Fatto Quotidiano, 11 July 2012 and l‟Espresso, 12 July 2012.
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.
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14. See Open Society Foundations, “Mapping Digital Media – Italy”.
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
• "Un'asta 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)
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17. Thanks!
If you appreciated the presentation forward it to your friends
and support our project!
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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