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report on operations

Shareholders,

The deterioration of the international setting and tensions in the Euro area led to an acceleration in 2012 of the recessive trend of the Italian economy, which was already evident as of the second half of 2011.

Within a macroeconomic framework characterized by the reduction in consumption, the advertising market, following the decline of over 13% recorded in 2009 and the almost 4% recovery in 2010, totalled a decline close to 4% in 2011 and a reduction of over 14% in 2012.

These economic aspects were accompanied by a structural change in the competitive context, invested by intensified, more articulate and multilevel competition, in short, multidimensional: a competition between platforms, offering and business models.

The main activators of the evolution in the competitive context were the switchover to digital terrestrial television, a process which is now complete, and the gradual consolidation of the Internet.

The switchover to digital television initially determined the extensive development of pay-TV and subsequently the creation of interesting market spaces for the affirmation of new specialised free offerings, leading to an audience breakdown process to the detriment of the general-interest offerings.

The consolidation of the Internet in terms of volumes and frequency of use, and the relative capacity to attract advertising investments, have made the Internet indispensable for individuals and advertisers.

The television market structure has changed considerably: in fact, the competition between the general-interest offering and pay-TV has been joined – within the scope of the free offering – by the competition between the general-interest and new specialized channels, led by the semi-general-interest entertainment, channels dedicated to TV series and films, those for children and sports channels.

The rapid ascent of the new free channels, of which there are now over 70, determines the need for the big operators to have a broad spectrum offering to adequately respond to the breakdown of audiences and of preferences and requirements.

In such a complex and increasingly open market, the Rai confirmed its role as undisputed leader of the television market once again in 2012: with a 39.8% share over the 24 hours and with 41.3% in primetime, Rai prevails over the Mediaset Group, with an advantage of about 6 percentage points, up on the previous year.

Rai is also leader in the specialized offering. With an offering of 11 semi-general-interest and specialized channels, Rai totals a 6.2% average share on the full day, bypassing Mediaset (5.3%) and Sky (4.6%).

Not only does Rai lead the viewing figures, it also enjoys an excellent Corporate Reputation. The summarized Corporate Reputation index has settled at a value of 6.7 points on a scale of 1 to 10, a positive value slightly higher than the average of previous assessments.

The Group’s consolidated results in 2012, albeit in the presence of the positive effects induced by actions taken to reduce the company’s main cost items, have been inevitably influenced by the economic and structural phenomena described above.

The costs of sports events and exceptional expenses linked mainly to provisions for staff resignation incentives also significantly influenced said results.

The Group’s net revenues amount to 2,761.4 million euros, reflecting a reduction of 212.5 million euros at Group level, attributable entirely to a drop in advertising revenues.

Continuing the trend begun in 2008, the Group’s advertising revenues fell almost 220 million euros in 2012, corresponding to a 22.8% decline compared to 2011.

Other revenues also fell by 30 million euros, partly due to the general economic weakness, largely concentrated in agreements with the Public Administration, in relation to government budget and sovereign debt tensions.

The adaptation of the per-unit licence fee created almost 40 million euros of higher income, in relation to the increase of the per-unit licence fee by 1.4% (from 110.5 to 112.0 euros), a percentage largely in line with the scheduled rate of inflation, and therefore insufficient to recover the real erosion of purchasing power.

The policy for the annual adaptation of the per-unit licence fee was confirmed, on the same basis, also for 2013, with an increase of 1.5 euros, corresponding to a daily cost for the user of just over 30 cents, against a television, radio and Internet offering of considerable relevance.

The fee is among the lowest in Europe for public broadcasting companies and also holds the record for particularly high tax evasion, estimated at around 27%, almost 19 percent higher than the European average.

A gradual alignment with the European standard, with a consequent recovery of significant resources, estimated at around 500 million euros a year, would require a revision of the payment collection methods, joined by a strengthening of the regulatory instruments designed to combat evasion, which are currently blatantly inadequate.

Attacking the anomalous phenomenon of fee evasion represents a decisive enabling factor which, besides contributing to restoring Rai’s financial equilibrium, would accelerate the product technological renewal process which is indispensable to Rai and for investments in quality products.

You are also reminded that the deficit of public resources accumulated with respect to the costs sustained by the Concession holder for the fulfilment of Public-Service responsibilities amounts, since 2005, to over 2 billion euros.

The annual imbalance, as you know, is the result of separate accounting, in compliance with the form approved by the Italian Communications Authority and certified by the independent auditor.

In terms of operating costs, the tendency towards a reduction in expenditure was strengthened, within a constant setting – i.e.: a substantial invariance of production layouts and extent of the offering, – thanks to a combination of coordinated projects. In fact, on an equal basis, without considering the cost sustained for big sports events, which take place in even years, amounting to about 140 million euros, a reduction in costs of almost 110 million euros was obtained.

Actions to improve rationalisation and efficiency, and reductions in spending across all areas of the company, including product and related investment, had an immediate positive impact and created the conditions to consolidate the benefits permanently.

These results were achieved through a reasoned and definitely not linear combination of targeted and selective operations which made it possible to attain real and significant increases in operating efficiency and to optimize the level of utilisation of internal resources, also thanks to the implementation of more streamlined and effective production models.

The income statement also benefited from the reduction of employee-related costs, which also include costs deriving from the renewal of the collective labour contract of middle management, office staff and blue collars, which expired on 31 December 2009 and was signed in February 2013.

Lastly, the result is influenced by exceptional expenses totalling 50.9 million euros, connected mainly to provisions for staff resignation incentives aimed to reduce structural costs with pre-pensioning of employees belonging to all professional categories.

The Rai Group records a loss of 244.6 million euros in 2012. Due to the aforementioned phenomena, 2012 was clearly down on the total of the previous year, which closed with a net profit of 4.1 million euros.

The Group’s net financial position at 31 December 2012 was negative by 366.2 million euros, down 93.8 million euros. At Group level, the positive difference of 150.8 million between the change in the net financial position and the net result of 2012 is largely attributable to accruals to provisions which did not undergo any monetary movement during the year and to other changes in operating capital.

Shareholders’ equity at 31 December 2012 amounts to 290.9 million euros. Despite the aforementioned structural crisis of resources, in recent years Rai has launched an intense programme of investments, mainly dedicated to the development of the digital terrestrial platform.

This is a project which has required a considerable financial commitment, starting with that for the construction of the network infrastructure which, by the time it has been completed, will have absorbed resources of about 500 million euros, as well as significant commitments and investments in the area of contents to expand the offering.

These investments have been entirely sustained by Rai, also through bank loans, without any public contribution, as happens in other European countries.

The outlook of the Italian economy for 2013 continues to be characterised by a high level of uncertainty, which translates into lower consumption and spending on advertising by companies. In this complex setting, Rai has elaborated and is about to enter into further, increasingly extensive and effective interventions to rationalize spending.

The review of processes and activities, together with the forthcoming review of the organizational model, will enable improvement of the level of operating efficiency and allow company resources to focus on the editorial activity.

An extensive review of the organizational model can never be accomplished without meticulous mapping of the potential of in-house staff in preparation for a more careful assessment of the roles, functions and responsibilities to be assigned. At the end of the staff resignation incentives, what we expect is a “younger” Rai, better equipped to take on the challenge it will have to face.

Company management will be guided by the choices of the 2013-2015 Business Plan. This is a Plan which, over the three years, together with the corresponding operating instruments, is intended to achieve a sustainable level of profitability.

A brief explanation of the activities performed by the main Group companies follows.



The main activities of Rai Cinema are the purchase of films and TV fiction series to suit the needs of Rai’s general-interest and specialised channels, film production and theatrical and home video distribution.

Purchase

In 2012, the profile of the Italian television market for purchased products shares aspects common to 2011. The year ended has witnessed growth generated by the continuation of the general economic crisis and conformation of the general drop in the aggression of the leading broadcasters.
2012 is also the year of completion of the digitalisation of the free television offering.
In this setting, in 2012 Rai Cinema continued to purchase television rights, aimed at the overall supply of purchased products to a total of 9 channels, each with different and specific needs and publishing lines. Rai Cinema worked to ensure that relations were maintained with the traditional American and German suppliers – whose products are fundamental to the editorial identity of the three major general interest channels – and to stabilise and improve relationships entered into in 2011 with new partners, for the procurement of product aimed mainly at satisfying the needs of the specialised channels.
The important partnership between Rai Cinema and CBS Corporation was further confirmed by the implementation of the five-year framework agreement in force until 2015, by virtue of which Rai Cinema also acquires all the new series produced and presented by CBS to the L.A. Screening during the year in progress. From Disney, with which there is a strategic three-year agreement which was entered into in 2010, Rai Cinema is ensured new episodes of series considered to be among the best produced in the entire American television system.
On the European front, the relationship with important German production and distribution companies, Rai’s historical partners, was strengthened.
Once again in 2012, the long-term framework agreement (2011-2014) with Beta/Eos supplied the Rai Cinema storeroom with a multiform product of outstanding productive quality, which has become, in many cases, synonymous with the Rai brand.
A perfect example is the historical series Il Commissario Rex (in the now consolidated version set in Rome) of which 12 new films are planned for the next two years.
With the Global Screen package, a new brand born in January 2012 from the merger of the Telepool and Bavaria companies, Rai Cinema is guaranteed repeats and first screenings of various types of German product that offer the opportunity for intensive and reiterated exploitation.
With the German public broadcaster ZDF, an agreement has been formalised for 2013/2014, for the procurement of new and continuing products.
With a view to stabilising and strengthening the relationships entered into with new partners in 2011, further important agreements have been negotiated with HBO and Universal in order to consolidate the relationship and offer new potential.
Growing suppliers in 2012 include the BBC while the relationship with Warner Bros. is kept active with the renewal of certain series for the Rai channels. Continuations of series for Rai 4 come from Lionsgate, along with the first run Boss for prime time on Rai 3. The agreements with Endemol and Fox Channels Italia on the other hand are related exclusively to the specialised channels.

Film production

Numerous different types of films were shot during 2012, with release due during 2013: Educazione siberiana – based on the best seller of the same name, directed by Gabriele Salvatores, who took on a big international project shot entirely in English due for release in February 2013; Bianca come il latte rossa come il sangue, directed by Giacomo Campiotti – based on the cult teenage novel of the same name by Alessandro D’Avenia with Filippo Scicchitano, the young star of Scialla! and Luca Argentero; Sergio Rubini’s comedy Mi rifaccio vivo; La mafia uccide solo d’estate, a surreal comedy based on a young boy and the first work directed by Pif, the well-known presenter of Il Testimone; the new film by Fausto Brizzi, Pazze di me, with Francesco Mandelli; Alessandro Siani’s directing debut, Il Principe Abusivo, featuring Siani himself and Christian De Sica; the second work by Alessio Maria Federici, Amore mio porti (s)fortuna, with Enrico Brignano and Ambra Angiolini; the new film by Marco Ponti, Passione Sinistra, with Valentina Lodovini and Alessandro Preziosi; the detective story Il cecchino by Michele Placido with Daniel Auteuil and Luca Argentero; the surprising debut of Giorgia Farina, Amiche da morire, with Claudia Gerini, Cristiana Capotondi and Sabrina Impacciatore, in an exhilarating dark comedy, due for release on 8 March.
In the experimental film sector, Michelangelo Frammartino followed up Le quattro volte with Alberi, a work midway between film and video arte, and is developing a project for a 3D film with Rai Cinema, Viale Aretusa, 19.
Within the scope of international coproductions, we should mention: Romeo and Juliet, by Carlo Carlei and Still Life, a short auteur film directed by Uberto Pisolini with the great English actor Eddie Marsan. Shooting began during 2012 on Benvenuto presidente!, a comedy directed by Riccardo Milani, with Claudio Bisio, Kasia Smutniak and Beppe Fiorello. Shooting is still in progress for Storia mitologica della mia famiglia by Daniele Luchetti, with Micaela Ramazzotti and Kim Rossi Stuart, set in the lively and turbulent 70s, and for Viva la libertà, a political film by Roberto Andò with Tony Servillo and Valerio Mastandrea. As regards debut films, due for release in 2013 are Miele, important directing debut by Valeria Golino, invited to take part in the Panorama section of the forthcoming Berlin Film Festival; the new film by Maria Sole Tognazzi, Viaggio sola, with the consolidated couple made up of Margherita Buy and Stefano Accorsi; the noir film Cha cha cha by Marco Risi and La città ideale by Luigi Lo Cascio.
2012 was the year of completion of an innovative project launched by Rai Cinema in 2010: to make a low-budget film destined exclusively for distribution on line.
At the Rome Film Festival the first title visible free of charge on the web was announced, thanks to the agreement reached with Telecom: Fairytale by Christian Besceglia and Ascanio Malgarini, obtained the top number of contacts (9,000) among the films offered by Cubovision in just one month.
The initiative for this type of production and for exclusive distribution in Italy completes Rai Cinema’s editorial aim to identify new genre, thriller or horror directors or those attentive to new young themes, to regain the faith of Italian audiences in genre films made by Italian directors. The cycle will run from November 2012 until November 2013 with the release of 10 titles, first on the web and then on Rai.

Production of documentaries

33 documentaries were completed and 38 new titles were launched in 2012. The choice of topics confirms and expands the editorial lines sustained thus far, focusing more attention on proposals from young people, which are innovative in terms of language and productive solution, often of international breadth. This year that has just ended was also important in terms of the acknowledgements received: Fratelli e sorelle. Storie di carcere by Barbara Cupisti won the Flaiano prize and the Ilaria Alpi prize in its category, Noi non siamo come James Bond by Mario Balsamo and Guido Gabrielli was selected – as the only documentaryin the fiction series competition at the Turin Film Festival, winning the Special Prize of the Jury. Numerous other titles were invited to the main film festivals, with appreciations by critics and the public.

Distribution

2012 was a critical year for the film market and 01 Distribution, no less than other distribution, felt the effects of the crisis that has affected the entire sector. Specifically, 01 Distribution, which distributed 24 films in 2012, 13 of which Italian and co-productions, occupies fourth place in the ranking of distributors, with almost 8 million tickets sold, takings in excess of 50 million euros and a market share of 8.6%. For the Home Video market, 2012 ended 16% down on 2011. The determining factors were piracy, both physical and on the Internet, which is increasing constantly, due to the absence of laws to defend the Home Video sector and the economic crisis affecting Italy. 01 Distribution ended 2012 with a market share of 15% in rental and 6% in sales, with about 2,000,000 DVDs sold.

Commercial agreements

Alongside the physical home video market, Italy also witnessed the development of new pay media, nonlinear and on-demand web-based utilisations, in all their different forms (Electronic sell through, Download to rent, Vod ect.). In 2012, Rai Cinema entered into various agreement which will guarantee strategic supervision for the distribution of its product on the new platforms. The most important agreements include those with Chili, iTunes, Cubovision, Sony and Anica online, which will make it possible to use the products of Rai Cinema on all the technological equipment connected to the Internet, such as tablets, consoles and smart tv.

Presence at festivals

Also in 2012, Rai Cinema fulfilled its role in the Italian film industry, taking part in the major Italian and international film festivals. The year began with an outstanding victory: the Golden Bear for Cesare deve morire by Paolo and Vittorio Taviani. This prestigious prize had not been won by an Italian film for 21 years.
Accompanied by remarkable success with critics, the film by the Taviani brothers told the story of the staging of Shakespeare’s Julius Caesar, by the theatre company of Rome’s Rebibbia prison, from a very original artistic viewpoint. The film was then chosen to represent Italy at the Oscars. Rai Cinema took part in the Cannes Film Festival with Reality, the film by Matteo Garrone made after the huge success of Gomorra. Once again the director won the Grand Prix, the second prize at Cannes. Rai Cinema took no fewer than 20 works to the Venice Film Festival, participating in the various sections, three of which competed, two of them Italian: the work by Marco Bellocchio, Bella addormentata<, and the directing debut of Daniele Ciprì, È stato il figlio. 12 films took part in the 7th Rome International Film Festival, with many of them being the first works of young newcomers. In addition to the prizes received at film festivals, there were also the David di Donatello – 14 Davids out of a total 24 assigned – , the Silver Ribbons and Golden Globes awarded to Scialla! by Francesco Bruni, Io sono Lì by Andrea Segre, ACAB by Stefano Sollima and L’Industriale by Giuliano Montaldo Lastly, at the Turin Film Festival, Rai Cinema participated with Su Re, by Giovanni Columbu and with the aforementioned Noi non siamo come James Bond.



2012 confirmed the solidity of the Rai Group Internet project and the allround success of the editorial offering proposed.

The Rai websites recorded excellent results in terms of traffic:
• a monthly average of 9.3 single users, up 15% on 2011;
• 1,697 million pages visits in total, up 13% on 2011;
• 336 million videos released on Rai.tv, up 7% on 2011.

In January 2012, the Rai.it and Rai. tv websites went on line with radically renewed graphics and content architecture, functionalities and services.

The Rai Replay service is available not only on the Rai.tv website, but also on the Rai.tv smartphone and tablet applications, on mhp through a dedicated application and on Cubovision at experimental level.

At the moment, over 2,000 titles are available on demand with over 100 available in podcast mode. Monthly production is around 450 hours of product on demand available on Rai.tv, organised by programmes and topics.

In April 2012, the new Rai.tv foreign website was launched. As a result of the collaboration between RaiNet and Rai World, the website offers a structured proposal only of the content of the Rai.tv website available for use abroad.

Along with the consolidation of the Rai. tv brand on the web, work continued on the planning and development of its natural evolution on the new media. In February 2012, the first version of the free Rai.tv application for iPad was released, conceived for allow users to use the different services while in motion. Together with the upgrade of the tablet application, in May 2012 the Rai.tv application was released for iPhone, with graphic and functional characteristics identical to the tablet release.

The version of the application for Android smart phones was released at the end of June.

Lastly, on Windows smart phones, the application has been upgraded following the restyling of the Rai.tv website.
The Rai.tv application has also been made available on the new Windows 8 and Windows 8 RT operating system launched by Microsoft at the end of October 2012. The application allows immediate access – from tablet and pc – to the main services of Rai’s digital offering.

In October 2012, in its beta version, the Social Rai.tv application was launched (available on Rai.tv on the web and on the Rai.tv application for iOS and Android tablets), in its fully evolutionary phase as regards the upgrade of functionality envisaged by the project. The application currently allows the management of social events related to the broadcast of television or radio programmes. In a single environment, as well as following the streaming of the programme and commenting and interacting with other users through the Twitter, Facebook or MyRai profiles, it is also possible to receive additional contents relating to the utilisation of live broadcasts, express personal opinions and communicate with the ‘special guests’ present. With the next upgrade, as well as the release of the smartphone version, the application will present numerous new functionalities which intend to improve the usability and the overall look & feel, as well as increasing potential in terms of sharing/ viral distribution.

In line with the evolutions outlined by the new media market analysis, the coverage of the Rai.tv offering on SMART TVs, or televisions capable of connecting to the broadband network in order to allow direct access to television contents offered by associated on-line providers directly on the display, has been enriched and expanded.

RaiNet launched a first partnership with Sony in 2010-2011 for the offer of ondemand contents on Sony Bravia; 5 Rai. tv channels are available on Bravia.

During the 2012 European Football Championships, RaiNet also developed the free application Rai Euro 2012, dedicated to the event and present on the Samsung and Sony platforms. The application allowed users to watch all the matches live and to watch repeats of the whole videos, with the index of highlights to see the best action of the match being played. In addition to classic television shoots, the application also offered alternative angles, thanks to the use of 6 web cameras, to see what goes on around the pitch. The offer was completed with a section of exclusive videos: link-ups from Casa Italia, Rai Sport spaces dedicated to the European championships and constantly updated news on every event in the competition.

In November 2012, thanks to a threeyear commercial agreement, a Rai offer was launched on Telecom Italia’s Cubovision platform, currently available on different devices.

During the second half of 2012, the project was launched to make Rai.tv available on Xbox; the application is in the implementation phase. The offer will allow users of Xbox Gold to access a Rai.tv application which will supply access to different services related to the Rai offer.

The websites of the three generalinterest channels have always offered more space to editorial launches that enhance the value of multimedia and other contents, of the network’s main programming.

In comparison with the past, not only has the number of daily updates increased but the dynamics and freshness of the launches has increased too: from previews, to VOD to live broadcasts, advanced new sites and UGC, etc. The Rai.tv official coverage of the social networks has highlighted a growth of loyal users, reaching over 235,000 fans on Facebook and over 137,000 followers on Twitter. Besides the ordinary management of these official Rai.
tv profiles on Facebook and Twitter, in both the first and second halves of 2012, RaiNet increasingly supported the programming departments to offer them guidelines on using the Social Networks and to open Facebook fan pages and Twitter accounts for the various programmes.

RaiNet supervised the opening and editorial policy set-up of over 30 programme fan pages and over 20 Twitter accounts.

The presence of the Rai brand on the leading social networks is consolidated: having begun on Facebook at the end of 2009 with the opening of the Rai.tv institutional profile, accounts are currently open for the most important tv and radio programmes, totalling 2.7 million fans during the first few days of January 2013. It is also starting to have a big impact on Twitter, with the most important Rai accounts reaching 1.5 million followers.

It is more than just service and support though: this experience has strongly revealed the need for constant coverage by RaiNet to promote a correct use of the Social networks by the various Rai editors, in order to maximise results in terms of communication, brand identity and return traffic on the various Rai websites.

In 2012 communication activity continued and was consolidated with web, television, radio and press campaigns focused on the launch of the single product or service.

Communication for the launch of upgrades and new applications for mobile devices on the Apple Store and Android Market was also important during the year. In February, and during the summer, the first two self-promo display campaigns were released on mobile devices for the promotion of the Rai.tv application and the 2012 European Football Championship application.



Sipra’s mission consists in enhancing the value of advertising potential of Rai’s editorial product and harmonising the objectives and peculiarities with the need for business communication, with complete respect for viewers’ requirements.

Sipra manages, exclusively for Rai, the advertising spaces on its radio and television networks broadcast in digital terrestrial and satellite technology and on the web, with all the websites of the www.rai.it and www.rai.tv dominions, promoting the high value of the media under concession in terms of the quality of programming, audience results and less crowding to investors.

In a context characterised by the deceleration of the economy and the drop in consumptions, advertising revenues in 2012 also recorded evident signs of difficulty, with a contraction of 14.3%, losing about 1.2 billion euros. All media have endured significant reductions, apart from Internet (excluding searches) which closed at +5.3%.

Television advertising investments show a decline of 15.3%, losing about 707 million euros. Mediaset and La 7 declined by 16.0% and 2.6% respectively, while Sky closed at +2.4%. The medium was affected by considerable cuts to the budgets available for Extensive Consumption, Telecommunications and Automobiles.

Sipra’s sales of advertising on the general-interest channels and specialised channels of the Rai Group recorded a contraction of 23.4% (excluding Product Placement). During the year, 135 new customers were activated on the general-interest channels (excluding Product Placement).

As regards Rai’s Specialised Channels, income from advertising in 2012 shows a positive trend (+8.9%), also thanks to the acquisition of 120 new customers.

With the offering of the Specialised Channels, Rai is able to reach more segmented targets which make it possible to expand the customer portfolio. At the moment, Generalinterest TV continues to be the medium that represents the main part of the concession holder’s advertising revenues.

During 2012 broadcasts/productions which hosted Product Placement operations continued, both for entertainment (La prova del cuoco, I fatti vostri, I soliti ignoti, Ti lascio una canzone, Zecchino d’oro etc.) and for TV fiction series (Una grande famiglia, La vita che corre and Un posto al sole). 2012 witnessed the introduction of Product Placement also in the Film medium, and within the scope of programmes on Generalinterest TV and the Specialised Channels. Throughout the whole year, 49 initiatives were completed by 32 customers, 21 of these customers being new since 2011.

Overall, Radio lost about 44 million euros during the whole year, recording a 10.2% contraction.
Advertising investments in the Broad Consumption, Telecommunications and Automobiles are clearly in decline. A positive result, going against the current trend, was recorded by the Distribution, Home and Tourism/Travel sectors. The decline can be attributed to an overall market phenomenon due to the general contraction in the demand for advertising spaces and also to the absence of official audience figures. As a result of its listener profile, Rai is penalised more than its commercial counterparts. Despite the difficulties indicated, over the year Sipra gained 103 new radio customers.

As regards Film, research institutes indicate advertising revenues of about 37.9 million euros for 2012.
In an increasingly competitive context, Sipra, on the strength of a circuit of over 500 fully digitalised cinemas, 19.5 million film-goers in 2012 and a more variegated offering capable of covering more communication needs and customers (standard and otherwise), gained 84 new advertisers during the year.

The market of web revenues has also grown this year, albeit less than in the past, highlighting a +5.3%. at the end of the year (excluding searches)In the media mix, compared to the media monitored by Nielsen, the web has risen from a share of 7.3% to 9.0%.

By virtue of the editorial performances of www.rai.it and www.rai.tv and the presence of events, Sipra increased its revenues with a growth of 21.7% above the market (+5.3%) and gained 54 new advertisers. Sipra also offered the market new video formats during the year.

During 2012, Rai’s offering on smartphone and tablet extended to new operating systems (Android, Windows 8). During the European Football Championships, the editor made an application available for mobile devices.

Social TV is now also part of the offering.

Outlook for 2013

In the light of evidence on the trend in the first part of 2013, compliance with Nielsen’s forecast issued in December 2012 (-3.2%) seems ambitious and the concession holder will have to deploy its professionalism and specific skills relating to market knowledge and coverage and exploit them to the full.

To this end it is also necessary to point out that the year in progress will be a year without big sports events for Rai/Sipra, which usually offer a positive contribution in terms of advertising revenues on several media.

Sipra’s aim is to increase its share of revenue from advertising investments, by introducing new customers and increasing the penetration of those already held in the portfolio or who are inactive.

To achieve this ambitious aim, Sipra is pursuing an extensive transformation begun in 2012, which will focus particularly on:
• completing the redefinition of the organisational arrangement of the Marketing & Sales and Staff departments, in order to increase Sipra’s productivity and effectiveness;
• raising the level of sophistication and innovation of the commercial offering to meet new market demands (special cross-media initiatives for example);
• optimising the allocation of the customer portfolio to the sales force so as to be closer to our customers and better understand their needs;
• completing the process to transform the instruments and processes in support of the sales force with the aim of increasing its effectiveness;
• continuing the strengthening of coverage of the media centres as key players in the production chain.



Rai Way approaches the Italian market as a provider of network infrastructures and services for broadcasters and telecommunications operators. It seeks to maximize the network’s potential, levering on important staff knowledge and know-how to offer a high quality service to Rai and third parties.

Rai Way was created to manage Rai’s broadcasting and dissemination networks in February 2000 following the company branch of the former Transmission and Broadcasting Division (Divisione Trasmissione e Diffusione). The resources transferred to Ray Way included ownership of infrastructure and systems, all the assets and knowhow needed for the planning, design, installation, construction, operation, management and maintenance of the network for the broadcasting of voice, video and data signals.

The main resources of Rai Way comprise over 2,300 dedicated sites throughout the country, 23 regional branch offices and about 670 employees, mainly technicians and engineers with top-level technological expertise in the field of transmission and broadcasting of audio-visual signals.

The company’s mission is to provide network services such as the analogue and digital, terrestrial and satellite contribution, broadcasting and dissemination of television and radio signals, paying particular attention to the management of the broadcasting networks for Rai through the specific Service Contract between Rai and Rai Way.

The coverage of the radio and television broadcasting network reached maximum levels in Italy both in relation to the population and to the territory, with a high level of quality. In this context, Rai Way’s objective is to deliver its services at the lowest cost and with the highest technical level in terms of safety and flexibility.

In particular, from the operational viewpoint, Rai Way is responsible for the activation of new broadcasting technologies, development, design and installation of all the radio broadcasting systems, overseeing the operation and maintenance of the network in order to guarantee that high technical standards are evenly distributed which allow excellent reception of programmes by the end users.

During 2012, Rai Way was involved in the activities linked to the analoguedigital switch-off of the Technical Areas envisaged for 2012 (TA11 Abruzzo and Molise; TA14 Apulia and Basilicata; TA15 Sicily and Calabria) and in the completion of the activities connected to the digitalisation of the areas that were already all-digital.
This activity was completed with the switch-off of the last analogue transmitter situated in Palermo on 4 July 2012, which brought the analogue age to its end, implicating the full conversion of the television broadcasting network to DTT.

Also during 2012, the company continued the technical communication initiatives already entered into for the switch-off operations in recent years.
In this sense, Rai Way confirmed the following initiatives:
• specialised information aimed at aerial fitters;
• specific information for domestic users.

The first initiative was divided into the two pre switch-off and post switch-off phases.
As regards the pre switch-off communication, the Rai Way technicians held seminars in Campobasso, Pescara, Avezzano, Potenza, Matera, Foggia, Lecce, Bari, Cosenza, Catanzaro, Reggio Calabria, Catania and Palermo; the post switch-off communication was held in Ancona, Perugia, Grosseto, Varazze, La Spezia and Florence. Once again this year, the initiative was very successful among operators in the sector, involving 5,400 operators.

For specific information for domestic users, on the other hand, Rai Way reproposed the ‘Progetto Scuola’ initiative, accomplished with the collaboration of Eurosatellite and the Ministry of Public Instruction.
This initiative was aimed at junior high school children, as the perfect target to carry DVB-T information and transfer it into the domestic environment. All of this has been achieved via the creation of certain film clips which tackled the most common problems that emerged during the previous switch-offs, highlighting the possible solutions in a quick and simple way. The initiative regarded the cities of Giulianova, Avezzano, Termoli, Isernia, Campobasso, Potenza, Matera, Lecce, Bari, Cosenza, Catanzaro, Reggio Calabria, Catania and Palermo, and involved2,330 students.
During 2012, Rai Way gave specialised technical assistance to the Parent Company for preventive analysis of the spectrum, coordination and planning of the frequencies during some important sporting events, such as the Giro d’Italia and the Formula 1 GP in Monza, and also provided local technical support during some of the Formula 1 GPs abroad.
During the European Football Championships, the Olympics and the Paralympics, Rai Way also carried out and managed the connectivity service for Rai, which ensured the transport of video contributions directly to Rome.

With a view to innovation and development of digital radio, Rai Way contributed, together with the other radio broadcasting associations, to the preparation of the new AGCOM (Autorità per le Garanzie nelle Comunicazioni, Authority for Communications Guarantees) resolution (180/12) which sanctioned the launch of radio broadcasts in digital technology for the provinces of Trento and Bolzano.

Rai Way works in observance of the Rai Group policies and in accordance with that established by the Group’s Ethic Code, to guarantee the broadcasting and dissemination of the radio and television signal in compliance with the regulations in force on safety and the environment. For this reason, the Company obtained an extension of the ISO14001 certification until 19 January 2015, as nothing resulted ‘noncompliant’ with the abovementioned regulations from the certifying board’s inspection.
We should also point out that the company has held OHSAS 18001/2007 (Occupational Health and Safety Assessment Series) certification since 2011 for the design and management of networks and systems for the broadcasting and dissemination of the radio and television signal in Italy and abroad.

Also for 2012, Rai Way will prepare and publish the Environmental Report in order to continue the promotion of information relating to the environmental impacts connected to company operations.