INTERVIEW:
Question 1
What is the situation of pay-TV in Europe?
Answer
Europe has the world's largest pay-TV operator, Canal Plus, which is in fact a major
player in the Italian market. It is a new business. It is converting itself from analogue
to digital. Here in Italy you have not had to endure some of the things that other markets
have had to go through. However, it is important to note that in other markets in Europe a
lot of money has been spent with competing digital pay-TV platforms, whereas in Italy I
think that it is largely hoped to avoid that expense. For example in Germany, Premier,
which is an analogue pay-TV platform, is in the area of the interests of the Bertelsmann
group and has competed very heavily with Kirch and they have both spent a lot of money
over the years trying to make sure that they had the better share of the market. And
similarly in Spain, as we speak there is a battle between the Telefonica-backed Via
Digital versus Canal Satellite Digital, which is part of the Canal Plus empire. This goes
to show that in a market where it is very expensive to mount an offer for consumers, it is
important that people recognize that not too many companies can make an offer like this
because the market will not grow as quickly as many companies would have hoped.
Question 2
Which European countries have the most subscribers to pay TV?
Answer
In the UK there are approximately six million subscribers to pay TV, in Germany there are
about 1.4 million, and in France about 4.5 million. Italy has a long way to go because
Italy is under one million; it shows you the scale of the opportunity that exists here to
develop pay-TV subscribers. But to make a pay-TV system work in the digital era requires
exclusive, compelling programming that is available very cost-effectively for consumers.
There is often a great overestimation of how much people will pay for extra television
services. There is only so much money available in a household to pay for television
services, so that is one very important factor to be kept in mind. Having said that, the
market is developing and developing very steadily. However, we are taking about an
evolution and not a revolution.
Question 3
How long will this evolution take in Italy?
Answer
We are estimating that there will be about five million multi-channel subscribers in Italy
in ten years time. That is based on direct-to-home satellite and cable subscriptions. When
you bear in mind that there are presently about 22 million television households in Italy,
we are talking somewhere in the area of about 20 to 23 percent of television households
subscribing to some form of multi-channel service.
Question 4
Generalist TV is very strong in Italy. A lot of people say that pay-TV will not have an
audience. Don't you think your vision is optimistic?
Answer
Some may call it optimistic, but we have seen the trends all over the world develop in
this way and I don't believe that Italy is completely immune to this. Digital television
offers people the ability to pay for the programming that they want directly. There is
advertising in the mix, of course, but it is more of a user's pay approach to television.
And as I mentioned, if the operators can put together compelling and exclusive
programming, which in Italy is calcio and movies, we're going to see Telepi? offer
pay-for-view movies in addition to an expanded liga calcio offer, then we bet that
considerable numbers of people will be willing to pay for that programming.
Question 5
What are the programs that people in the United States and in Europe want to see when they
subscribe to pay-TV?
Answer
Across Europe the trend is the same. Pay-TV, digital pay television, is being driven by
soccer. Soccer is the main reason that people are paying for subscription to the services.
That is true in the UK where the BSkyB service was based upon the Premier League, and the
Premier and BSkyB have a mutual dependence. In Germany, the Bundesliga, the German
football league, is the main driver of penetration for that service. In Spain, sports
rights, specifically the soccer rights, are seen as the most important element in
succeeding in pay-TV there. The same is true in France. So, it is very safe to say that in
Europe pay-TV is driven by soccer. What supports a pay-TV subscription after the household
has said yes to it can sometimes be different, which is where movies come in. However,
movies are less important in the penetration of digital pay television in Europe than
sports, specifically soccer.
The United States is a different market. I don't think that we can compare the United
States with Europe very easily. However, it is the same thing there. Pay-TV is driven by
exclusive rights, and that includes both sports and movies, but in the United States
soccer isn't of the same primacy as it is in Europe, and therefore the mix is different.
Question 6
What about cultural programs?
Answer
In Europe you have a tremendous legacy of public broadcasters and others providing a great
array of cultural broadcasting, and while I believe that it is very important for people
if they receive it for free, whether they will pay extra for that service remains to be
seen. However, in the digital world we have a capability of 200, 300, 400 channels; it
allows niche programming to find a home much more easily. So on that basis we will see
cultural programming taking a greater part of people's households; however, will they pay
for it? It will probably be a long time until they will pay for it in the same way that
they pay for sports and movies.
Question 7
So what will the free thematic channels, like the RAI SAT channels in Italy, have to do?
Answer
I cannot comment on the Italian public broadcaster's policy. Public broadcasters all over
Europe are trying to make sure that they play a role in the digital era, because in the
future all television will be digital. And if the public broadcasters, who are meant to
represent the interests of taxpayers and the broader church, are not participants in the
future, then the commercial broadcasters will have a greater influence on society and
culture. Therefore we are seeing a trend for public broadcasting everywhere to spend
taxpayers' money in trying to ensure that their mandate is executed in digital television.
The amounts that are spent and the efforts they are undertaking vary. It is a very bold
move for RAI to be launching three channels in the way that they are at this time;
however, perhaps when the digital picture is more clear in Italy, it will offer RAI the
maximum amount of leverage to make sure that their remit is met with the taxpayer and thus
the audience.
Question 8
With all these new channels, do you think that the web TV will also develop in the future?
Answer
Absolutely. Web TV is a means of accessing the Internet and turning your television into
an Internet access device. It is a very interesting technology. It has taken off fairly
slowly in the US. Its applications in Europe are very considerable. Italy has particular
potential for the convergence of Internet and television-delivered technologies, given
that in the future we expect all of Italy's signal to be delivered digitally, whereas the
rest of Europe is still struggling with an analogue infrastructure. What that means is
that Italians will be able to use their set-top box to access all kinds of digital
content.
Web TV turns an existing television into a vehicle which allows people to go on-line.
There is a lot of debate as to whether people will use the television or the PC to access
the Internet from the home. We think that the PC is largely used for interactive
functions, whereby people are looking to access and command information, whereas the
television is more used for passive viewing. There will be a certain level of the market
where the two converge. However, the two functions of viewing entertainment or accessing
information are fundamentally different. But as the program packages that are offered to
consumers contain the two - so for example you have your favorite television program and
you have a small window inside the screen which allows you to access more information,
which allows you to make a transaction to buy a tee-shirt, to book a holiday, while you're
watching the program - those sort of applications are interesting. That definitely will
come. And in Italy with the cable build that is meant to be taking place, because it is
digital and because it is very capable, the ability to put cable modems in households for
high-speed two-way access may mean that Web-TV as we know it is not the main driver of
television and Internet in the homes but in fact is through cable systems.
|
