SAT-ITALY 04.07.1997


According to market estimated, the digital television market in Italy is
worth 300 billion lire (around 300 million DEM). Digital broadcasts started
more than a year ago when Telepiu (owned by Canal Plus, Kirch and Fininvest)
started broadcasting the Telepiu Satellite service. The package of nearly 20
channels is currently received by 80,000 subscribers to Telepiu and around
16,000 cable viewers.
The cost of the digital satellite receivers varies between 1,5 and 2 million
lire (around 1500-2500 DEM). To that sum we need to add 500,000 lire (500
DEM) which is the cost of the satellite dish together with the installation.
The annual subscription fee for the premium channels and the basic channels
amounts to around 684,000 lire (684 DEM).
As we reported last week, Telepiu has announced it will start leasing
digital satellite receivers from September. The monthly fee will be 15,000
lire (15 DEM). This in fact will be the same path taken by Canal Plus in
France where there are nearly 500,000 subscribers to the Canal Satellite
Numerique digital satellite package.

According to an article published by the Italian daily "La Repubblica", the
TV holding Mediaset is negotiating with Cecchi Gori Group the acquisition of
a package of movie titles. The deal which is estimated to be worth around
120 billion LIT (around 120 million DEM) would see Mediaset (whose principal
shareholder is Silvio Berlusconi) taking control of the Penta film
distribution company, which was founded by Mediaset and Cecchi Gori Group.
The company has been declared bankrupt two years ago after the death of it's
founder, Mario Cecchi Gori. However the Penta archives contain over 300
movie titles which continue to bring in money from TV rights and Mediaset is
ready to buy up the whole package which could end up on its three TV channels.
The Cecchi Gori Group which is headed by Vittorio Cecchi Gori is the biggest
movie producer and distributor in Italy and also owns two television
channels - TMC and TMC2/Videomusic. Estimates are that during the coming
period September-December, the monthly advertising revenues for the two
channels will  reach 20 billion LIT (around 20 million DEM) in advertising
revenues. These estimates are based on relevant figures from the past few
months: 17 billion LIT (17 million DEM) for the month of May, 15 billion LIT
(15 million DEM) during the month of June.
The autumn TV season will be decisive for the company with Italian league
soccer and recent movie titles being the highlights of the new program
schedule. Cecchi Gori Group expects that advertising revenues will increase
35-40%, which means quarterly revenues of 80 billion LIT (80 million DEM) or
180 billion LIT (180 million DEM) for a year. 

The Italian state telecommunications operator Stet has announced its
business plans for the coming three year period. A substantial sum, 13,950
billion lire (around 13,,950 million DEM) has been earmarked for extending
the capacity of the existing cable network, enabling the introduction of
various multimedia services. More precisely, in the coming three year
period, the number of cities with cable will rise from 19 to 60 and an
additional 4,800,000 households will be connected.
Last year, 840 billion lire (around 840 million DEM) has been invested in
setting up the basic cable infrastructure in 19 major Italian cities. Around
500,000 households have been passed and 320,000 family units have been
cabled up. The objective is to cable up 5,5 million homes and this will
require investments of up to 7,000 billion lire (around 7,000 million DEM).

In the past few weeks, there have been several meetings between the
principal media companies in Italy and the French company Canal Plus (who
operates the pay-TV network Telepiu) with the goal of finally reaching an
agreement on a single digital platform for Italy. In short, the deal would
see RAI and Stet entering as shareholders of Telepiu (by taking a 45-51%
stake), but this in fact depends on German media magnate Kirch selling his
45% stake in the Italian pay-TV network. 
There are three important questions to be resolved for a deal to be a
reached. The first is in fact the subscription management of Telepiu which
is currently run by Canal Plus. The Italian state telecommunications
operator in fact views this question as a priority, because in the near
future, other multimedia services besides TV will be broadcast via this
single digital platform. The second thorny issue is who will be in charge of
the package of channels. Both Canal Plus and RAI/Stet want to take control
of the movie rights as well as of other programs. 
Finally, negotiations are also underway concerning the technological
questions, i.e. the type of decoder (or more precisely the type of
conditional access module), but it seems that it will be easier to reach a
deal on this question. Currently in Europe, on one hand there is the Irdeto
scrambling system developed by NetHold, and on the other hand the Canal Plus
backed Seca system. The recent merger between NetHold and Canal Plus has
only complicated things. The French company has already announced it will
start leasing the Telepiu boxes in which case the Seca system would be
preferred. Unfortunately the current 80,000 subscribers have decoders with
the Irdeto module. 
In case a deal on a single digital platform is not reached, the two state
owned companies, RAI and Stet have already announced that they will pursue a
path of their own. This could see mean a partnership with the French digital
service TPS which is controlled by the French state broadcaster France
The RAI/Stet-Canal Plus agreement would also mean that the existing
broadcasting laws will have to be changed, enabling RAI to operate (together
with other partners) other TV stations besides the three terrestrial
channels it owns. There is also the question whether a digital platform
owned by all the principal Italian media companies would come under the
Antitrust in Italy and in Brussels.

The Italian state telecommunications operator Stet/Telecom Italia and the
U.S. telecom giant AT&T have announced on July 2nd that they have reached a
cooperation agreement. Stet/Telecom Italia will enter as a shareholder (with
a 30% stake) into the company Unisource, a joint-venture formed by AT&T and
Unisource Nv which operates in Europe and in Latin America Stet and AT&T
will form a joint venture which will offer multimedia services.
However, AT&T would also be ready to buy a stake in the Italian company
(around 5%), but this will take probably happen in autumn. The Italian
government will put on the market 30-35% of Stet this autumn and an
additional 10-15% will be reserved for "stable investors".

- The Italian Ministry for posts and telecommunications has confirmed that
it plans to subsidise the cost of digital satellite equipment which would
enable a drastic fall in their price. 
- The ex-director general of RAI and ex-president of Stet, Biagio Agnes has
said he is completely in favour of a single Italian digital platform and
that it would be "especially good for RAI".


06.VII - RAI UNO, 20:45h - Il buono, il brutto, il cattivo (Italy-1966),
starring: Clint Eastwood, Eli Wallach 
06.VII - RAI TRE, 20:50h - Jaws 2 (USA-1978), starring: Roy Scheider,
Lorraine Gray
07.VII - RAI UNO, 20:50h - Big Wednesday (USA-1978), starring: Gary Busey,
Jan Michael Vincent
07.VII - RAI DUE, 22:30h - Exotica (Canada-1994), starring: Bruce Greenwood,
Mia Kirshner
08.VII - RAI DUE, 20:50h - Scusi, lei e favorevole o contrario?
(Italy-1966), starring: Alberto Sordi, Giulietta Masina
08.VII - RAI TRE, 20:50h - The case of fatal framing (USA-1992), starring:
Raymond Burr, David Soul
10.VII - RAI DUE, 20:50h - Scandal (UK-1989), starring: John Hurt, Bridget Fonda
10.VII - RAI TRE, 20:50h - Justice on the Bayou (USA-1995), starring: Gerald
McRaney, Tracy Scoogins
11.VII - RAI TRE, 20:25h - The green berets (USA-1968), starring: John Wayne
11.VII - RAI UNO, 23:00h -  Il grande cocomero (Italy-1993), starring:
Sergio Castellito, Anna Galiena
12.VII - RAI DUE, 20:50h - The boy's club (Canada-1997), starring: Dominic
Zamprogna, Dewon Sawa

Note: all movies transmitted in the prime-time slot on RAI UNO are subtitled
in English on RAI Teletext page 778

06.VII - RAI TRE, 18:20h - Tennis: ATP tournament - Mestre
07.VII - RAI TRE, 15:20h - Tour de France - 2nd day
08.VII - RAI TRE, 15:20h - Tour de France - 3rd day
09.VII - RAI TRE, 15:20h - Tour de France - 4th day
10.VII - RAI TRE, 15:20h - Tour de France - 5th day
11.VII - RAI TRE, 16:00h - Tour de France - 6th day
12.VII - RAI DUE, 13:55h - Formula 1: GP England - heats
12.VII - RAI TRE, 15:20h - Tour de France - 7th day

11.VII - RAI TRE, 22:55h - The Beethoven symphonies - tonight N. 2 and 3 Eroica
12.VII - RAI DUE, 22:25h - Opera: I pagliacci di Ruggero Leoncavallo -
performed by Luciano Pavarotti, Teresa Stratos, Juan Pons. From the
Metropolitian in New York, directed by Franco Zeffirelli

[Other mailing lists]