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Revenues

The Italian television market in recent years has been aligning itself with longstanding trends throughout Europe, with an increasing amount of revenue from fee-based services joining public funding and advertising revenues.

In this landscape, the licence fee, despite rising in comparison with the previous year (+1.6%), shows a gradual decline in comparison to total revenues for the system. Already, the inflows generated by the various forms of pay TV have exceeded funding from the licence fee.

Historically, the parameter used to adapt public funding has been the programmed inflation rate, and not the actual rate of inflation, meaning that not only does it not allow the concession holder to recover the entire effect of inflation within the Italian economy, it also fails to consider the significant pressure on production created by the increased level of competition within the marketplace that has been growing for several years now. In a context of such competitiveness, the Italian licence fee remains the lowest in Western Europe.

It should also be noted that in Italy, despite the steps Rai has taken to limit these effects, reliable estimates point to a significantly high rate of evasion with reference to both the ordinary licence fee and the special fee, the latter approaching 30% far and away the highest in Europe, where the average rate of evasion is 10%, with a low of 5% in the U.K. In this area, we would like to see the introduction of legislative measures that would increase the efficacy of actions to combat evasion, measures that Rai has requested from the competent public bodies on numerous occasions.

The Italian television system will, however, continue to be funded primarily through advertising revenues, although we are seeing progressive growth in revenues from pay TV on one hand and a shift towards investments in other emerging media on the other.

The gradual decline of revenues from television advertising in recent years is common to the main public service broadcasters throughout Europe, although audience figures continue to remain quite stable.