Half Morgan Stanley 7 th Annual TMT Conference Barcelona, 14 th -16 th November 2007
Entertaiment Industry What has changed Technological Innovation is changing consolidated models Increase in the personalisation of the different forms of entertainments Increase in demand of premium content Audience is increasingly spreading across a multitude of channels, internet site and free press and distribution platform as mobile phones and even video games. The Long Tail of the modern entertainment
Broadcaster Macro Strategic Options 1. Pure Content provider and Content packager focus on the product low level of vertical integration platform agnostic 2. All-round Media Company Shift from product to client/viewer vertical integrated Access management
Mediaset Inclination towards Media Company Entrepreneurial approach First to understand importance of developing its business on an international scale Control of the broadcasting infrastructure First among FTA Broadcaster to get into the PPV market Recent acquisition on the Content side (Endemol, Medusa) Natural inclination towards Media Company
Entertaiment Industry Audience Fragmentation Effect Impacts on the audience market Audience + - Generalistic Content Theme Content Niche Content Mass Market Audience Fragmented Audience Long Tail Audience Concentration Fragmentation
Entertaiment Industry Audience Fragmentation Effect Two main business models have proven to co-exist Audience Mainly Advertising (Analog/digital) + Mainly Pay-TV(digital) - Generalistic Content Theme Content Niche Content Mass Market Audience Fragmented Audience Long Tail Audience Concentration Fragmentation
Entertaiment Industry Mediaset s strategic approach Audience + FTA TV: C5, I1, R4 (Mediaset Core Business) Multichannel: Boing, others to come Pay TV: Football, Movies, TV Series, others - Generalistic Content Theme Content Niche: Home Shopping, Internet, Mobile, PCTV, VOD, User Generated Content Niche Content Mass Market Audience Fragmented Audience Long Tail Audience Concentration Fragmentation
FREE TO AIR MULTICHANNEL PAY TV NICHE CONCLUSIONS
Mediaset s Approach Free to Air Television 24 hours Audience Share: Figures include analog, satellite (incl. SKY Italia homes) and DTT platforms 10M 2006 10M 2007 INDIVIDUALS 40.4% 43.5% 41.6% 40.6% COMMERCIAL TARGET (15-64 Years) 39.9% 42.5% 37.4% 43.1% Source: Auditel
Mediaset s Approach Free to Air Television Prime Time Audience Share (20:30-22:30) Figures include analog, satellite (incl. SKY Italia homes) and DTT platforms 10M 2006 10M 2007 INDIVIDUALS 45.2% 43.8% 40.6% 40.6% COMMERCIAL TARGET (15-64 Years) 42.5% 42.5% 40.8% 42.9% Source: Auditel
Mediaset s Approach Free to Air Television Sky Italia Audience Share: April October, 24 hours, Individuals Audience Share (%) Sky Channels (10) Fox Channels (6) RAI SAT Discovery Channels SitCom Channels Other FTA Satellite TOTAL SATELLITE 2.7 1.7 0.5 0.3 0.1 2.9 8.2 1 channel audience > 0.5 21 channels audience 0.1 0.5 64 channels audience < 0.1 Source: Auditel
FREE TO AIR MULTICHANNEL PAY TV NICHE CONCLUSIONS
Mediaset s Approach Multichannel Boing Audience: First Kids Channel Individuals (Dtt) - 24 Hours Kids 4 14 (Dtt) 24 Hours 1.1% 1.9% 8.6% 9.9% September 06 September 07 September 06 September 07 Individuals - 24 Hours Kids (4 14) 24 Hours Boing 0.35 Boing 2.53 Disney Channel 0.33 Disney Channel 2.36 Playhouse Disney 0.24 Playhouse Disney 1.42 Disney Channel +1 0.16 Disney Channel +1 1.20 RaiSat Yoyo 0.06 RaiSat Smash 0.42 RaiSat Smash 0.05 RaiSat Yoyo 0.30 Source: Auditel, September 2007
FREE TO AIR MULTICHANNEL PAY TV NICHE CONCLUSIONS
Mediaset s Approach PPV Mediaset Premium present PPV offer: FOOTBALL MOVIES SERIE REALITY SHOWS live broadcast of Serie A and Champions League matches the most recent international blockbusters the latest episodes of America s most famous Series 24 hours coverage of the currently playing shows OTHER EVENTS theater plays, concerts
Mediaset s Approach PPV Mediaset Premium smart cards and recharges sale 000 s 10.000 End of Phase 1 9.188 9.756 10.365 8.000 7.933 8.202 6.266 6.911 6.000 5.380 4.338 4.000 2.048 2.628 2.730 2.820 2.092 2.369 2.574 2.794 2.918 2.998 2.000 1.282 1.438 1.798 1.922 1.951 1.561 1.994 2.330 2.540 0 Aug. Dec '05 Feb '06 Apr Jun '06 Aug Oct. Dec '06 Feb '07 Mar '07 Jun '07 July '07 Aug '07 Sept'07 31-ott-07 SmartCard Sold to retailers Recharges Sold to retailers
FREE TO AIR MULTICHANNEL PAY TV NICHE CONCLUSIONS
Mediaset s Approach Niche Audience Mediaset is testing all platform/ business models Home Shopping Internet based platform Digital Merchandising (VAS) Mobile DVB-H / UMTS Participation TV Merchandising Music
Mediaset s Approach Home Shopping Direct Marketing Retail Internet C5, I1, R4 Windows 24h Channel on Dtt & Satellite Catalogue and Print Production and post Production Facilities Retailing and Marketing Customer Service Delivery and Logistics Over 20 ml TV contacts each day Over 1.3 ml clients 60% Revenues from windows and 24h Channel From Jan. to Oct. 2007: - 30.000 average orders per month - 100 euro, average revenue per order
Mediaset s Approach Internet platform Through internet platform Mediaset offers: MULTIPLATFORM NEWS SERVICE COMMUNITIES and USER GENERATED CONTENT VIDEO ON DEMAND
Mediaset s Approach Internet platform MULTIPLATFORM NEWS NEWS SERVICE TGCOM provides real time news through its website and its mobile update service Unique Users: 4.600.000 per month Page Impressions: 144.000.000 per month Source: Nielsen NetRatings
Mediaset s Approach Internet platform COMMUNITIES and USER GENERATED CONTENT Unique Users: up to 3.600.000 per month Page Impressions: up to 100.000.000 per month 120 SECONDS 120 SECONDS Wanna-be reporters can share and publish their work on this section of the TGCom website LE IENE LE IENE On the website of one of Mediaset most popular tv shows people can share funny videos and candid cameras 6 COME 6 6 COME 6 Viewers can shoot their own Italia 1 channel promotional video. The best works will be broadcast on FTA TALENT 1 TALENT 1 Singers, dancers and young film directors can promote themselves by sharing their perfomance samples on the web Source: Nielsen NetRatings
Mediaset s Approach Internet The best content from all Mediaset platforms is also available on demand through its PC Television service VIDEO ON DEMAND Unique Users: up to 1.300.000 per month 60 million videos watched since launch in April 2007 DOWNLOAD AND PLAY Content available for download upon payment (e.g. TV Series: EUR 1.99 per episode) STREAMING WITH ADVERTISING Content can be viewed on line with advertising windows Italian Fiction US TV Series Live Football Matches Movies Entertainment shows Source: Nielsen NetRatings
Mediaset s Approach Mobile WAP based mobile site that integrates a wide of textual and proprietary audiovisual content, delivered via all the mobile operators portals under the umbrella brand mediaset.it Big Brother: more than 80.000 videos downloaded during the last edition Main operator in Italy on the DVB-H technology both on content and transmission broadcasting side FTA Canale 5 Italia 1 Premium Serie A Italian League Rete 4 Boing Uefa Champions League
FREE TO AIR MULTICHANNEL PAY TV NICHE CONCLUSIONS
Conclusions Mediaset s Strategic Priority In MS strategy: Content is king but cash is the queen Endemol Medusa all platform agreement with Universal and Warner Focus on FTA Core Business Maintain our market share in a cyclical business Enhance the value of specific target audience and emphasize the uniqueness of commercial TV target Consolidate the present programming cost discipline Increase exploitation of our brand and content Enhancing Multichannel strategy (FTA) Widening premium content offer (PPV) Platform neutral but preference on DTT Test valuable business model in the niche audience area (independently from the platform) Opportunistic approach in International M&A ACCESS CONTENT GEOGRAPHY
Investor Relations Department: Tel: +39 02 2514.7008 Fax: +39 02 2514.6719 Email: ir@mediaset.it WebSite: www.gruppomediaset.it/investor/ Forward-looking Statements Statements contained in this document, particularly the ones regarding any Mediaset Group possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties. Mediaset Group actual results and developments may differ materially from the ones expressed or implied by the above statements depending on a variety of factors. Any reference to past performance of Mediaset Group shall not be taken as an indication of future performance. This announcement does not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein.