The Commercial Division markets all the intellectual property rights of the Rai and third parties in Italy and abroad with the aim of developing economic resources in addition to those from the traditional licence fee and advertising, working on a variety of markets, in different business areas and on numerous projects.

The Division also defines the Group’s commercial strategies, identifying and consolidating new revenue opportunities at Italian and international level, as well as developing and managing conventions with central and local public administration, institutions, nonprofit organisations, consortia and foundations, and purchasing, marketing and distributing broadcasting and phonographic rights to contemporary, light and classical music and prose, and the sporting rights of Rai and third parties and the library of the Clubs in Italy and abroad.

The 2011 financial year was particularly delicate and significant due to the merger by incorporation of Rai Trade into Rai SpA.

Following this internalisation process, the activities previously carried out by Rai Trade converged under the Commercial Division, which was also assigned the task of enhancing the value of publication of books, magazine and multimedia products under the Rai Eri logo.

Thanks to the synergies connected to the convergence of these activities in Rai, it was possible to achieve a dual aim:
• the substantial confirmation of the invoicing aims envisaged in the budgets assigned, notwithstanding the complexity of the markets due to the Italian and international economicfinancial crisis;
• a significant reduction in the process costs and organisational costs, and of personnel with respect to the total costs relating to the former Commercial Development and Coordination Management, Rai Eri and the former Rai Trade.
In particular, following the merger process, the activity currently envisages:

Management and Development of Conventions with the Public Administration

The Commercial Division focused its intervention on the development and management of conventions with the Public Administration, activating the appropriate synergies with the other Divisions and companies of the Group via:
• enhancement of the value of institutional visibility needs at central and local level through the development of multiplatform integrated offering models which comprise the inclusion of the themes chosen by central and local Public Administration within television and radio programming, spaces on specially created channels or themebased analysis areas on DTT, distribution of contents on the Rai.it and Rai.tv portals and Televideo files;
• the definition of conventions with local authorities for the performance of concerts by the Italian National Symphony Orchestra;
• the development of projects for the recovery and restoration of audiovisual materials stored in the Teche of the Rai regional offices and relative commercial enhancement;
• the creation of radio and television programmes aimed at linguistic minorities;
• the commercial enhancement of territorial promotion activities linked to the localisation of audio-visual productions (tv series, documentaries, tv movies, miniseries, etc.);
• the development of technological research and industrial application projects via the adjudication of funding;
• participation in bids for tender at Italian and European level and consequent development of projects aimed at acquiring funding and various emoluments.

Among the numerous initiatives that characterised 2011, two Conventions are particularly deserving of mention due to their innovation and importance:
• Convention with the Valle d’Aosta Region for the production of the New Year’s Eve programme;
• Convention with the Montecatini Convention Bureau for the production of Miss Italia.

For the first time in many years, both productions were moved (from Rimini and Salsomaggiore Terme respectively) and commercial negotiations were entered into with new local authorities, implicating a considerable economic advantage for the Company.

In relation to the aforementioned agreements a new form of collaboration was experimented for the first time, aimed at sourcing new resources on the market through sponsorship and the naming of the locations of the events.

Library

The development of initiatives to enhance the Sports Library, with particular reference to the Football clubs, continued via the formalisation of new agreements with F.C. Internazionale, Bologna F.C., U.S. Lecce and A.C. Cesena and with agreements for the distribution of the Library pictures.

Sale of Rights

The activities in this sphere determined a higher value than expected. In particular:

a) Teche

Thanks to the exclusiveness of the archives and to the renewal of the main framework agreement with Italian broadcasters, the sector has exceeded the aims set and the result of the 2010 financial statements.
Among the elements that contribute to the achievement of these positive results, particular importance is held by agreements with publishers for the exploitation of Internet contents and the development of inhouse collaborations with Rai Fiction and Rai Cinema which are closely linked to the main consumers of footage.
These collaborations have enabled the commercial enhancement of the contents of the Rai Archive through the sale, in Italy and abroad, of footage to broadcasters, publishers and producers of multimedia and other contents.

b) Home Video Italia

Despite the far from positive situation, thanks to an increased number of initiatives distributed and licensed, and to the quality of the projects offered, the Home Video area succeeded in maintaining the results envisaged in the budget, going against the market trends. In the first half of the year, particular success was attained by two series, both of which were distributed with the Corriere della Sera, each selling over 500,000 copies:
• Dentro Faber, a series of 10 DVDs on the life and artistic career of Fabrizio De Andrè;
• I Capolavori delle grandi civiltà, a series of 30 DVDs based on the historical programme Superquark by Piero Angela.
c) Normal Trade

Direct home video sales by Rai no longer see the Company only in the role of distributor of Rai titles, but as direct operator on the market. The distribution of the new episodes of Montalbano is achieving excellent results, exceeding, thanks in part to distribution immediately after they were aired, the results envisaged in the budget.

d) Foreign Sales

Within the sphere of Foreign Sales, the policy of strategic journeys to certain key countries, particularly within Europe, intensified: in France, the sale of Il Commissario Montalbano to France Tv was followed with great interest and gave excellent results in terms of audience; new projects were set up in Spain after the sale of Barbarossa; new opportunities with the satellite channels are being explored in Germany; in Eastern Europe too we are receiving important demonstrations of interest.

e) Licensing

The most successful programme was La Prova del Cuoco which closed several agreements, particularly in publishing, food, promotion and music. Definitely worth a mention is Pocoyo which, thanks to the relaunch of the second television season, aided by the broadcasting of Rai 2 and Rai YoYo, will see the launch of the products of Giochi Preziosi, Clementoni, Joker giochi, Bauli and Cartorama, for which we have succeeded in reaching interesting commercial agreements. Also to be reported is the issue of Più sani Più belli magazine, despite the absence of television broadcasting, confirming the value of the brands in Rai’s portfolio.

f) Digital Extension

Within the scope of programme interaction activities via mobile and landline phone, there was a general drop in the total volumes of calls and therefore of revenues generated, due largely to the continuation of the general crisis which inevitably determines a reduction in non-primary consumptions and partly to certain programming choices and/or changes made to the tendering regulations of certain formats which led to a reduction in the use of TV participation mechanisms.
As regards activities on the new technological platforms, there has been a development of new revenue opportunities in the Gaming sector, with the launch of the first format initiatives of L’Isola dei Famosi and L’Eredità.

Sport

In the 2011 financial year, revenues for the sales of Sport recorded higher values than expected, via:
• the foreign co-distribution with Media Partner & Silva of the Italian Football Championship for the 2010/2011 season and for the 2011/2012 season;
• the sale of the cycling races of the RCS package (Giro d’Italia, Milano- Sanremo, Giro di Lombardia and Tirreno-Adriatico), of the home matches (friendlies and qualificiers) of the Italian National Football Team;
• the sale of the friendly matches of the Italian National Football Team played abroad and purchased by management.

Musical Editions and Productions

The Musical Editions and Productions area promoted and developed the purchase, sale and distribution, in Italy and abroad, of soundtracks, radio and TV productions, contemporary and classical music and prose.
As regards editions and productions connected to radio and television programming, over 32 soundtracks were produced in 2011, for TV series and mini-series, and the musical paging was carried out for the new programmes of Radio1 and Radio2.
With reference to record productions, an excellent example of synergy with the televisions channels is the publication of La Prova del cuoco, where the original music was used within the programme of the same name and the cd, containing the original music, was promoted in the programme with a good sales result.

The Classical Music and Prose sector achieved for the channels concerned, the purchase of rights and coordination of the production of 12 classical operas, 52 concerts, a ballet and 27 prose performances.
From the commercial viewpoint, no fewer than 6 performances were screened live in digital cinemas all over the world. The inauguration performance of the season of La Scala, Don Giovanni, was broadcast live in about 500 cinemas throughout the world.

The Contemporary Music Musical Editions further expanded their broadcasting catalogue, strengthening the collaboration with the Rai’s National Symphony Orchestra and intensifying their presence within the concert seasons of the world’s most important theatres.

Despite the intense and positive activity of the sector, the financial statements present a considerable negative difference compared to the budget forecast, due largely to the issue of an order which strongly penalised Rai. This order established for 2011, on one hand, a significant reduction of payments on the signature tunes and background music and, on the other, their increase in relation to the music of leading programmes and of films and TV series, with a consequent advantage for the publishers.
Observing the same order, income was divided between radio and television with reference to payments for recording rights and the decision was made to considerably reduce the payment for the radio, the musical programming channel in which Rai is the most important broadcaster and which currently generates the most revenue from jungles and background music.

Theme-based Channels

As regards the sector of theme-based channels, during 2011 an agreement was reached with A.S. Roma for the early termination of the production and distribution contract for the Roma Channel (1 August 2011) one sports season prior to the natural expiry of the contract, which was scheduled for June 2012. A.S. Roma decided, just like F.C. Internazionale during the previous season, to internalise the channel’s activity but to give Rai the mandate for international distribution.
In economic terms, this agreement made it possible to obtain a significant benefit, improving the performance of the sector in 2011 and the forecasts for 2012.
This means that Rai maintains the international distribution of the three channels which, as previously reported, records an improvement in the sales figure compared to past seasons. Rai continues to produce and distribute the Juventus Channel and having ended the recognition of the guaranteed annual minimum with the 2010/2011 season, achieves a positive economic result. During 2011 the contract with the supplier of the technical and publishing services was terminated and Rai is assessing with Juventus F.C. the opportunity of a change in production model, in alternative to the new tender for assignment of the technical and publishing services.



The publishing activity developed in line with the television and radio programming choices, giving a recognisable identity to the Rai library, maintaining the success of the Rai Eri brand in the world of culture and publishing and aiming to offer the book market a ‘Rai to read’.

At the moment its catalogue contains over 500 titles, about 30 of which were published this year, and two prestigious magazines, Nuova Civiltà delle Macchine and Nuova Rivista Musicale Italiana.
The most successful titles include Almanacco di Occhio alla spesa, Storie di Chi l’ha visto?, Le ricette di casa Clerici, and, among the co-publications, Questo amore by Bruno Vespa, La classe non è acqua by Antonio Caprarica, Aldilà by Roberto Giacobbo and Io che by Carlo Conti.
This year was also characterised by the conclusion of the second edition of the literary prize NarreRai, as well as the publication of the finalist book of the first edition of the competition held by RaiRadio1 Tramate con noi and by the launch of the La Giara prize for new young Italian narrative talents.

Rai Eri’s offering aims to respond to the public desire for knowledge and detailed information in the various areas of culture, from narrative titles to nonfiction.