New research recently published by Informa Telecoms & Media shows that Digital TV penetration of Western European households will reach 54% (104 million) by the end of the year, rising to 157 million by 2013, equivalent to a 90% penetration rate. Cable multi-system operators are still leading with digital delivery, though terrestrial TV should exceed cable by 2011.

Italy strong in pay-DTT

Most DTT (Digital Terrestrial TV) services are provided as free-to-air (FTA), with no subscription and minimal hardware requirements. However, there are some pay-DTT providers who offer the regular FTA programs, plus some premium content at an attractive price. One of the most interesting markets, Italy, is expected to show the strongest growth in DTT over the next five years, and pay-DTT is a leading component of that growth. According to ABI Research, the main driver is the prevalence of “pay-as-you-go” (PAYG) services that don’t require a commitment to long-term subscriptions. Good enough reason to have a look at the main private Italian broadcaster.

Mediaset is looking for new revenues on Digital Terrestrial TV

Mediaset is Italy's largest private broadcaster with three free private television channels, but also offers pay-TV. Mediaset contends with the public operator RAI for the leadership regarding TV audience of free-to-air, in terms of advertising revenue it’s at the forefront. Since the launch of digital terrestrial TV in Italy in 2004 Mediaset has tried to diversify its revenue with high investments in new platforms and content.

• In 2005 the pay-TV service Mediaset Premium was launched offering live coverage of Serie A football matches. They started with an innovative pre-paid card, which can be topped up, and sold around one million cards in less than two months.  

• Three years later, in January 2008, the new pay-TV package “Premium Gallery” started, composed of three channels (one for general audience, one for female viewers and one basically aimed at male viewers) on air 24 hours a day and in “+1” version (with a time shift of one hour), so that the audience is able to choose between six options at any time. To provide the channels with new films and services (also in preview), Mediaset signed a triennial € 450 million agreement with Universal studios and Warner.: The program – without advertising – can be bought for 8 Euros per month via pre-paid card (without a subscription).

• Since 1st July, Mediaset Premium has expanded: “Premium Gallery” now includes Disney Channel for children. “Premium Calcio 24” is dedicated to football fans with (from September) previews and highlights from the Serie A and the Champions League. The new offer is now also available by “Easy Pay”, where you pay by regular direct debit and no longer have to top up your card. According to a press release the Mediaset call centre received more than two million calls within the first week.

…and on the web, fighting for its copyright

Since 2007 Mediaset has been offering online services which allow viewers to re-watch the FTA content or to buy and download films, series or – since embarking on its partnership with MUSIC BOX in March – music videos. At the end of July, Mediaset announced that is has filed a lawsuit against Google’s YouTube, seeking at least $779 million in damages for illicit use of its audio and video content. The statement said that after a sample analysis on June 10, it found "at least 4,643 videos and clips owned by us, equivalent to more than 325 hours of transmission without having rights" on YouTube. Mediaset said this was equal to the loss of 315,672 days of broadcasting by its three TV channels, which, in turn, allegedly represents lost advertising opportunities for its television programs. In response, YouTube said that it respected copyright holders and did not see any need for the legal case.

It’s not only the fact, that the media companies have the copyright for films, series and football games and therefore lose money, if this content is distributed for free on video portals. They also compete with them for viewers, since people have only a limited amount of time to consume media. According to a branch expert, for some YouTube videos the number of viewers is ten times higher than that for a Champions League game. So, media companies have no choice: Either they invest in these new markets or they have to battle with the new competitors. That´s why for some of them, the infringement of copyright would sometimes be a good reason to keep the new internet portals at bay.  

Pro

“Pay-as-you-go” DTT could also prove popular in other European markets

Providing TV content via web as a way to improve online advertising revenues

Con

Loss of advertising revenues from programmes illegally distributed on the web