The context in which Rai operates is undergoing considerable evolution, propelled by two main drivers:

• the maturing of digital tv which, following an initial affirmation of pay tv, has witnessed the development of interesting market spaces for new and attractive free theme-based offerings, to the detriment of traditional generalinterest offerings;
• the consolidation of the Internet in terms of volumes and frequency of use, also due to the multiplication and growing presence of devices that allow easier and quicker access to the web and enable an increasingly gratifying fruition experience. These factors make the web a vital medium for users and advertisers.

Despite the growing competition of digital media, thanks to the development of the multichannel and multiplatform aspects, television confirms its central role in the information and entertainment system.

2011 was yet another record year for television viewing figures: per the first time over the full day, the 10-million figure was exceeded, with daily consumption per capita of over four hours and ten minutes.

In terms of advertising revenues, 2011 was not so positive. After a slight recovery in 2010, total investments fell generally on all media (-4% according to the estimates of Nielsen), apart from the Internet, which is the only media to grow (+12%).

Television in particular recorded a drop of -3% with Rai which, despite having suffered a consistent decline, succeeded in pursuing its public service mission, maintaining a high quali-quantitative level of its general-interest and themebased offering which, with fifteen television channels, is the broadest and most attractive free-view bouquet on the Italian and European market.

The analogue terrestrial broadcast switch-off process continued in 2011 in accordance with the schedule, involving all the regions of Northern and Central Italy by the end of the year, as well as Sardinia and Campania.

The overall broadcast of the digital television platform (digital terrestrial, satellite, IPTV) now reaches almost every Italian family (95%).

According to the Auditel figures, the dissemination of DDT exceeded 86% of the entire population at the end of 2011 (with an absolute value of 21.5 million households equipped with decoders or tv sets with built-in DTT) and in December 2011, fruition through this platform reached almost 70%, consolidating it as the system used most by Italian viewers to watch television. The offering of pay-tv by Mediaset Premium was also consolidated, thanks to an aggressive commercial policy, based largely on the premium football and film/fiction contents, gaining a further increase in terms of dissemination with households, (about 2.9 million smart cards active, about 2.0 million of which belonging to licence-holding households) and in overall revenues (income from direct customer expenditure and advertising revenues).

The satellite platform is also growing, both in terms of free-view and pay tv. At the end of the year, about 7.4 million


households owned a receiver system (30% of the population; +5% compared to 2010).

The increase in satellite tv is led also by the growth in the number of households with access to the free platform, Tivù Sat, launched in 2009 with the aim of guaranteeing full access to the ‘free to air’ offering by those people without coverage by the digital terrestrial broadcasting infrastructure.

Managed as a joint venture by Rai, Mediaset and Telecom Italia Media, at the end of 2011 Tivù Sat had activated almost 1.3 million smart cards and over 1 million customers, about double the number compared to 2010.

With regard to pay satellite tv, Sky closed the year with over 4.8 million customers (about 19% of the population and +8%) thanks partly to the commercial policies applied to make the bouquet more competitive in terms of breadth, diversification of choice and the quality of the services offered (over 30 high definition channels, the first 3-D channel in Italy and the possibility to use decoders with a built-in digital video recorder: My Sky).

The IPTV platforms managed by the telephone operators Fastweb, Telecom Italia and Infostrada, continue to remain at substantially marginal and possibly declining values (estimated use by about 500,000 households), with a strategic repositioning from largely closed models, in which broadband operators also played a role in the preparation of the editorial offering, to more open models in which they function merely as a distributive platform.

2011 also witnessed the consolidation of important trends and factors with regard to the world linked to the internet. Besides the increase in consumption of on-line video (both ‘on demand’ and ‘live streaming’) and the spread of mobile devices (smartphones, tablets), we continue to see growth in the number of actual television devices (tv sets, set-top-boxes, Blu-ray players, videogame consoles) equipped with internet connections and therefore capable of allowing users access to interactive services and audiovisual content.

The spread of these devices is closely linked to the spread of broadband. It is currently estimated that less than 10 million devices are installed and those actually connected represent 20% of the total.

In prospective, thanks to the boost of innovations in the offering of devices and relative services, the penetration and use of this kind of appliance looks set to grow exponentially.

While migration to digital television has, in recent years, represented the main factor of discontinuity, now, thanks to innovations in content and services, in broadcasting infrastructures and devices for fruition, the foundations have been laid so that a new market characterized by the redefinition of business models, the expansion of the offering and the introduction of new global players (often from a non-editorial background) can be consolidated in the medium-long term.