26
2004 Annual Report
2004Annual Report
2004Annual Report
The shareholders are called to attend the ordinary General Meeting to beheld in Cologno Monzese (MI), Via Cinelandia n. 5, on April 27th, 2005, at10.00 a.m., and if necessary, a secondary meeting will be held on April 29th
2005 at the same time and venue, to decide upon the following
agenda
1) Annual and consolidated financial statements as at December 31st, 2004;Board of Directors’ Report on operations; Report of the Statutory Auditors;consequent resolutions;
2) Authorisation to the Board of Directors for the purchase and sale of ownshares; relevant resolutions;
3) Conferral of the task to audit the Annual and consolidated financialstatements, as well as the limited audit of the interim reports for the years2005, 2006 e 2007;
4) Nomination of the Board of Statutory Auditors and its Chairman,determination of emoluments.
Shareholders with the relevant certificate will have the right to partecipatein the meeting. Certificates must be requested from the relevant authorisedbodies belonging to the Monte Titoli S.p.A. centralised management system,at least two days before the date of the meeting.Under article 27 of the Corporate Statute, the nomination of the statutoryauditors occurs through votes from the list.The documents regarding the items on the agenda will be available at theregistered office of the company and at Borsa Italiana S.p.A. within theterms foreseen by current regulations; shareholders may obtain a copythereof.
ChairmanFedele Confalonieri
Notice of meeting
area and investments/divestments in subsidiary and affiliated companiesmade in 2004 94
• consolidation method 96• valuation criteria and accounting
policies 96• additional information 101• comments on the main assets items 107• comments on the main shareholders’
equity and liabilities items 121• comments to the memorandum
accounts 130• comments on the main income
statement items 133• attachments 142
Report of the External Auditors 151
Mediaset S.p.A.
Board of Directors’ report onoperations 155• financial and economic results 160
economic results 160balance sheet and financial position 164
• investments in subsidiary andaffiliated companies 165
• human resources 169• additional information pursuant
to article 2428 of the civil code 173• significant events after
December 31st, 2004 178• foreseeable developments 179• further information 180
Report of the Boards of Directorsto the General Meeting 181
Balance Sheet and Income Statement 185
Notes to the Financial Statement 193• structure and content 195• valuation criteria and accounting
principles 195• additional information 199• comments on the main assets items 204• comments on the main shareholders’
equity and liabilities items 216• comments to the memorandum
accounts 225• comments on the main income
statement items 228• attachments 236
List of investments Referringto article 125 of CONSOBRegulation no. 11971/1999 andsubsequent amendments 245
Reports of the Statutory Auditorsand External Auditors 247
Extract of the deliberation takenby the General Meeting 257
Corporate boards 5
2004: An historic year 6
Group structure 12
Financial highlights 14
The Mediaset share price 16
The history and activities of theMediaset Group 20
Italy 21• advertising 21• the channels 22• programme production 26• acquisition of TV rights 26• production technology 28• signal distribution 28• multimedia activities 30• digital terrestrial TV 31• the new channel Boing 32• Mediaset Premium 33
Spain 36• the listing 36• advertising 38• broadcasting and content 38
International advertising 40
Corporate social responsibility 42• human resources 42• training initiatives 45• Mediaset and minors 46• Mediaset’s commitment to culture
and society 47
Board of Directors’ Reporton operations 49• the general economic situation 55• financial and economic results
of the Mediaset Group 56economic results 56balance sheet and financial position 66
• results of the parent companyMediaset S.p.A. 71
• investments in subsidiary andaffiliated companies 72
• legal developments in the televisionindustry 76
• additional information 78• significant events after December
31st, 2004 81• foreseeable developments 82
Balance sheet and income statement 83
Notes to the consolidated financialstatements and attachments 93• structure and content 94• main changes in the consolidation
5500,2 2004 net profit
(EUR m)
Corporate boards
ChairmanFedele Confalonieri
Deputy ChairmanPier Silvio Berlusconi
OfficierGiuliano Adreani
DirectorsFranco AmigoniMarina BerlusconiPasquale CannatelliPaolo Andrea ColomboEnzo ConcinaMaurizio CostaMauro CrippaBruno ErmolliMarco GiordaniAlfredo MessinaGina NieriRoberto Ruozi
ChairmanAchille Frattini
Acting statutory auditorsFrancesco Antonio GiampaoloRiccardo Perotta
Substitute statutory auditorsGianfranco PoleraniFrancesco Vittadini
Deloitte & Touche S.p.A.
Member of the Executive Committee
Member of the Internal Control Committee
Board of Directors
Board of Statutory Auditors
External auditors
5.662Mediaset Group
Personnel
6 7
Fedele Confalonieri,chairman
2004:an historic year
Mediaset’s results for 2004 are the best since 1996, the year in which thecompany was founded and listed to the Italian Stock Exchange. However,such results are not due to a fortunate combination of events.But rather to the constant progression of the company’s performance,made possible by a business that is structurally sound.
Since its foundation, Mediaset has created value, continually and abundantlyrewarding its shareholders. So it is correct to attribute the credit for thisuncommon corporate achievement to those who have led the companyand to the men and women who work for it.
Let us take a brief look at the main results for the financial year 2004.Consolidated net revenues amounted to3,441.6 million, a 12.1% increasecompared with 2003.
Costs: in both Italy and Spain, the company as once again respected itscommitment to shareholders, confirming the efficiency objectives launchedin 2002. In particular, in Italy total television costs showed a slight increaseof 1.2% for the third year in a row, markedly below the rate of inflation.
Meanwhile at the Spanish subsidiary Telecinco total TV cost, net of theone-off costs related to the stock exchange listing and costs directly relatedto the extraordinary dynamic in adversiting sales, grew in line withinflation.
The group’s operating profit for the period came to 1,034.2 million, a 33%increase compared with the previous year.
Operating profitability for the year reached 30%, the highest everachieved by Mediaset and the highest level in the European TV sector.
8 943%Mediaset audience share
(24 hours)
Pier Silvio Berlusconi,deputy chairman
Net profit for the year came to EUR 500.2 million, an increase of 35.3%compared with 2003.On the basis of these excellent results, the Board of Directors has decidedto propose to the Annual General Meeting a dividend of EUR 0.38 pershare, an increase of more than 65% on that of the previous year.
This corresponds to a pay out rate of around 90%, the highest amongEuropean broadcasters.
In Italy the advertising revenues of Publitalia grew by 9.1% compared with2003, reaching the record amount of EUR 2,869.1 million.
The performance of Publitalia is especially significant when compared withgeneral market trends.
According to Nielsen estimates, total advertising in Italy grew by 7.3% in2004 compared with 2003, an indication of marked recovery in the market.Nevertheless, once again, at +9.1%, Mediaset significantly outperformedthe market.
In Spain the total advertising revenues of Telecinco grew to EUR 778.2million in 2004, +20.8% compared with the previous year. The figure waseven higher than 2000, which until now been considered an unrepeatableyear in terms of advertising sales.Also in Spain, Telecinco performance in 2004 was markedly higherthan total television advertising market which, according to the Infoadexestimates, was up 15.3%.
Excellent results, then. To which should be added some generalconsiderations. Firstly, an observation on the group’s shareholder structure.Mediaset has 258,000 shareholders, of which 250,000 are small Italianinvestors, who account for 5.3% of the company’s share capital.A further 10% is held by Italian institutional investors, while 22.6% is inthe hands of British and US investors.
This is a good sign also for the Italian system: it demonstrates thatMediaset is considered a reliable partner for foreign financial institutionsand big international investment funds. In fact, today Mediaset is one ofItaly’s most important company, both in terms of size and in terms oftechnological content and know-how.
Regarding size, the Spanish case is worth a special mention.In just three months, in 2004, Telecinco was listed. We have given totaltransparency in the pre-listing phases, we have not been aggressive withpricing, we have appointed authoritative independent directors to theboard and have guaranteed a high level of pay-out for the 2005 dividend.
In December Telecinco was added to the Ibex 35 index, the list of Spain’stop 35 companies and its shares have already been recognised as the beston the Madrid Stock Exchange and the best IPO of the year.
The share price, which was EUR 10.15 at the listing in June 2004, reachedEUR 17, in March 2005, an increase of more than 65%.
Brief mention should also be made of the regulatory framework, whichhas a significant impact on a business such as television, an activity that issubject to public licensing. In 2004 a reform of the Italian media sector wasapproved, the so-called Gasparri Law.The reform was subjected to a lengthy and arduous parliamentary debate,in the context of bitter political conflict, and an initial version was rejectedby the President of the Republic and returned to Parliament formodification.
In such a complex situation our compass showed us the only possibledirection to take, the only way to defend the company and make concretethe demand for pluralism coming from different quarters: digital terrestrial.
2.86910 11
2004 Publitalia advertisingrevenues (EUR m)
Giuliano Adreani,officier
Generalist television has discovered in digital terrestrial broadcasting anew frontier characterised by interactivity, multi-channel, and the possibilityof offering an “à la carte” selection of premium content. Mediaset was thefirst in Italy to launch a multiplex (a new network of digital frequencies),we have rented space to third content providers, launched the first 24-hour free channel dedicated to children, and inaugurated a world first apay-per-view service using a pre-paid card, offering live coverage of thehome matches of Italy’s leading Serie A football teams.
In March 2005 we bought, subject to necessary authorisations, thefrequencies for the creation of our second multiplex.
For an incumbent this is a significant development. Creativity, rapidity anddetermination have enabled us to shake off the mantle of a company thatfor years was accustomed to being the leader in its core business and toadopt the aggressive approach of the newcomer in entirely unexploredterritory.
We are now in a position to exert considerable influence in the contentmarket and, thanks also to the acquisition of football rights, we areredefining the boundaries between satellite pay-TV and digital terrestrialtelevision.
It is a moment of enormous technological and industrial turmoil in themedia sector.There is much movement - ADSL platforms, UMTS mobile services, fibreoptic cable - and it should be said that the new legislative framework isproving to be sufficiently flexible and is able to encourage thedevelopment of new business opportunities.
Mediaset has not been just a pure observer, in a very short time,become a generator of innovation and new applications. All of this allowsus to foresee a 2005 rich with new satisfactions.
1312
R.T.I. Spa Publiespana Sau
Elettronica IndustrialeSpa
Gruppo EditorialTele5 Sau
Videotime Spa
Estudios PicassoFabrica de Ficcion Sau
BOING Spa
Mediavivere Srl
PressTV Spa
Fascino - ProduzioneGestione Teatro Srl
CFN - Class FinancialNetwork Spa
GestevisionTelecinco Sa
MediasetInvestiment Sarl
TV Breizh Sa
TV Breizh NantesSa
EuromediaLuxembourg Two Sa
Atlas Media Sau
Atlas Pais VascoSau
MI CarteraMedia Sau
Aprok Imagen Sl
Cinematext MediaSa
Europortal JUMPYEspana Sa
Multipark Madrid Sa
Corporacion de MediosRadiofonicos Digitale Sa
Premiere MegaplexSa
Publitalia '80 Spa
International MediaService Ltd
ALBACOM Spapartecipazione cedutain data 4/2/2005
Hopa Spa
Mediaset Ireland Ltdin liquidazione
100%100%
Publieurope Ltd
MEDIASET Spa
KirchMedia Gmbh &Co KgaA in amm. control.
100%
100%
100%
100%
40%
11.76%
100%
10%
35%
50%
50%
100%
100%
40%
60%
100%
27% 25.1% 100%
100%
98.44%
9.94%
50%
50%
50%
51%
14.35%
49%8%
2.28%
99.95%
100%
100%
19.50%
2.73%
PublieuropeInternational Ltd
100%
Atlas Espana Sau
Digitel 5 Media Sau
Canal Factoria deFiccion Sa
Titanus Elios Spa
30%
24.50%
Auditel Spa
20.22% 6.45%
Beigua Srl
Advanced MediaSau
100%
Publimedia GestionSau
100%
Publiespana 2000Slu
100%
Publieci TelevisionSa
50%
Promoservice ItaliaSrl
100%
Radio e Reti Srl
10%
EuromediaVenture Belgique
27.42%
Group structure Mediaset ‘s headquarters in Cologno Monzese
2000 2002 2003 (*)2001 2004
Net revenues
Italy
Spain
Operating profit (*)
Italy
Spain
Group operating profit
Profit before taxes and minority interest
Group net profit
Income statement(EUR m)
3,441.6
2,649.4
793.4
1,082.0
788.0
294.0
3,070.0
2,424.9
646.0
820.8
650.1
170.7
2,316.1
2,316.1
-
558.5
558.5
-
2,351.1
2,351.1
-
587.2
587.2
-
2,363.6
2,363.6
-
691.5
691.5
-
1,034.2
994.8
500.2
777.6
675.1
369.7
558.5
497.1
326.0
587.2
418.1
248.4
691.5
648.0
423.5
2000 2002 20032001 2004
Net invested capital
Shareholders’ equity and minority interest
Group net equity
Minority net equity
Net financial position
Operating cash flow (profit + amortizations)
Investments
Dividends distributed by the Parent company
Dividends distributed by subsidiaries
Balance sheet (EUR m)
2,983.2
3,045.2
2,820.7
224.5
62.0
1,614.3
3,031.8
2,832.5
2,591.6
240.9
(199.3)
1,537.6
2,639.5
2,468.7
2,467.2
1.5
(170.8)
1,213.4
2,602.4
2,354.6
2,353.0
1.6
(247.8)
1,162.3
2,263.9
2,389.2
2,387.5
1.7
125.3
1,146.6
1,116.5
271.3
120.0
835.1
247.4
16.9
849.3
247.8
-
1,279.1
283.2
-
806.1
216.2
-
2000 2002 20032001 2004
Operating profit (**)/Net revenues
Italy
Spain
Operating profit / Net revenues
Pre-tax profit and minority interest / Revenues
Net profit / Net revenues
ROI
ROE
N. of shares
Consolidated net profit per share (€)
Dividend per share (€)
Main indicators
31.4%
29.8%
37.1%
30.0%
29.7%
14.5%
26.7%
26.8%
26.4%
25.3%
22.0%
12.0%
24.1%
24.1%
-
24.1%
21.5%
15.6%
25.0%
25.0%
-
25.0%
17.8%
10.6%
29.3%
29.3%
-
29.3%
27.4%
17.9%
34.4%
18.5%
1,181,227,564
27.4%
14.6%
1,181,227,564
21.3%
15.0%
1,181,227,564
24.1%
10.5%
1,181,227,564
32.4%
18.6%
1,181,227,564
0.42
0.38
0.31
0.23
0.21
0.21
0.21
0.21
0.36
0.24
2000 2002 20032001 2004
Mediaset Group personnel (headcount)
Italy
Spain
Mediaset Group personnel (average)
Italy
Spain
Personnel
5,662
4,459
1,203
5,638
4,415
1,223
5,600
4,395
1,205
5,633
4,396
1,237
4,393
4,393
-
4,399
4,399
-
4,396
4,396
-
4,384
4,384
-
4,384
4,384
-
4,382
4,382
-
(*) since 2003 figures include the effects of the entire consolidation of the Telecinco Group(**) before amortization of the consolidation difference re. Telecinco3.441
2004 group net revenues(EUR m)
14 15
Mediaset Group:financial highlights
2000 2001 2002 2003 2004
2,363.6 2,351.1 2,316.1 3,070.0 3,441.6
Net revenues EUR m
2000 2001 2002 2003 2004
691.5 587.2 558.5 776.6 1,034.2
Operating profit EUR m
% Operating profit/net revenues
Operating profit
29.3% 25.0% 24.1% 25.3% 30.0%
2000 2001 2002 2003 2004
283.2
66.9% 99.8% 68.3% 73.4% 89.7%
247.8 247.4 271.3 448.9
Dividends and pay out EUR m
Pay out
Dividends distributed by Mediaset SpA
2000 2001 2002 2003 2004
423.5
17.9% 10.6% 15.6% 12.0% 14.5%
248.4 362.0 369.7 500.2
Net profit EUR m
% Net profit/net revenues
Net profit
90% 1716
Mediaset share priceperformance in 2004
2004pay out rate
Mediaset’s first share (1996)
General trends in financial markets
The world economy in 2004 wascharacterised by overall but varied growth(sustained growth in South East Asia andthe United States, moderate in Europe).This diversity is a result of geopoliticalfactors, above all the crisis in the MiddleEast, and of global macro-economic issues.These include the weak dollar (particularlyvs euro) the generalised expansive monetarypolicy in almost all advanced economies.There has been increased competitivepressure from South East Asian markets,especially China. The year ended positivelyfor international equity markets, as can beseen by the 11.6% increase in the DowJones World index.Market performance in the United States,was positively affected by the rapid resolutionof the presidential election and the expansivepolicy of the Federal Reserve. Over the yearNasdaq grew by around 9%, while theDow Jones closed at +10%.European equity markets recorded a positiveperformance - enlivened also by a recoveryin merger and acquisition activities - endingthe year around the highest levels seen inthe last two years. The pan-European indexEuro Stoxx continued to grow just belowthe level of the S&P 500 (+7.3% and +9%respectively). This was also a result ofmarked rises in December attributable tovarious factors such as the year-endadjustment of oil prices (-8.7% fixed ataround $50 per barrel) and the fall of returnson risk free bonds. This had the generaleffect of increasing appetites for equityreturns. Among the relevant events in 2004for the Italian stock exchange it is worthremembering the introduction of the newS&P/mib index, which includes 40 stocksfrom different sectors. It has replacedthe MIB 30 and ended the year with aperformance of 15%.
Mediaset and the main indices sincethe listing (1996)
In 2004 Mibtel index recorded the highestperformance among leading world indiceswith +18.1%, thanks to the brilliantperformance of the utilities, telecom andenergy sectors. In spite of a still weakItalian economy, the performance of theindex returned to spring 2002 levels,continuing the positive trend that beganin 2003 when, after three years of decline,an increase of 11% was recorded. In thelist of the top European stock exchangesin 2004, Mibtel was followed by Spain’sIBEX (+17.4%), Sweden’s OMX (+16.6%),London°Øs FTSE (+9.5%), France’s CAC40(+8.5%) and Germany’s DAX (+7.3%).At the end of 2004 the overallcapitalisation of the listed companies inMilan reached EUR 580.6 billion, 19%more than the EUR 487.4 of 2003. Thisfigure corresponds to 43% of Italy’s GDP(37.5% in the previous year) and confirmsdata from the end of November thatindicated Milan as Europe’s sixth biggestmarket by capitalisation, after London,Frankfurt, Madrid and Zurich.The marked recovery in Italian equities,accompanied by an increase in volumes,has led to a notable increase in the value oftrading. In this regard 2004 has been thebest year for Italy since 2000. The totalnumber of trades in share-based instrumentsand derivatives came to 39.3 million, for atotal value of EUR 753.2 billion, while thedaily average came to EUR 2.9 billion(+6.8%).The companies listed on the Milan StockExchange distributed total dividends of EUR23.8 billion, representing an average returnof 5.1%.
1918
2004 2003 2002
26th January 10.0
12th August 8.2
9.6
9.3
5.4
18th June 26.2
31st December 0.9
1,181.2
10,985.4
2nd December 9.9
10th February 6.2
7.2
9.4
5.7
20th June 36.2
12th August 1.5
1,181.2
11,103.5
19th March 10.4
9th October 5.5
8.1
7.3
5.2
11th October 17.7
27th May 1.1
1,181.2
8,623.0
Maximum price (€)
Minimum price (€)
Opening price 1/1 (€)
Closing price 31/12 (€)
Average volume (m)
Maximum volume (m)
Minimum volume (m)
Number of ordinary shares (m)
Capitalisation 31/12 (EUR m)
Mediaset share price 2004
Reb
6906606306005705405104804504203903603303002702402101801501209060
Mediaset stock compared with main indices (1996 index 100)(from the listing in1996 to 2004)
A A AD D A A D A A D A A D A A D A A D A A D A A D
QMEDIA SET,Close (Last Trade), Rebasing 31 Jul 96 = 100QMIB 30 INDEX,Close (Last Trade), Rebasing 31 May 96 = 100
19971996 1998 1999 2000 2001 2002 2003 2004
QNAS/NMS COMPSITE,Close (Last Trade), Rebasing 31 May 96 = 100QDJS MEDIA,Close (Last Trade), Rebasing 31 May 96 = 100
Reb840810780750720690660630600570540510480450420390360330300270240210180150120906030
Mediaset stock compared with main European Braoadcasters (1996 index 100)(from the listing in 1996 to 2004)
A A AD D A A D A A D A A D A A D A A D A A D A A D
QMEDIA SET,Close (Last Trade), Rebasing 31 Jul 96 = 100QTF1, Close(Last Trade), Rebasing 31 May 96 = 100QPRO SIEBEN SAT 1,Close (Last Trade), Rebasing 31 Jul 97 = 100
19971996 1998 1999 2000 2001 2002 2003 2004
QM6-METROPOLE TV,Close (Last Trade), Rebasing 31 May 96 = 100QITV, Close (Last Trade),Rebasing 31 May 96 = 100
Trends in the media sector
As far as media sector is concerned Europehas seen a generalised de-rating in equities.The devaluation of the sector has mainlyaffected the value of multiples which in2004 was around 10-20% lower than thehistorical average in the last ten years. Thereasons for this change in the evaluationcriteria can be put down to a range ofcontingent macro-economic factors, includingthe geo-political tensions in the Middle Eastand uncertainties concerning GDP growthforecasts in the principal industrialisedcountries, in particular in Europe.The increase in the level of inflation in 2004raised fears of a possible augmentation ininterest rates by FED and ECB, and causeda reduction in spending (sales of technologyproducts have increased, but there hasbeen a fall-off in food and FMCGs).In an attempt to limit the effects of apossible inflationary spiral, a number ofEuropean governments supported policiesaimed at persuading producers to holddown consumer prices. This, combinedwith increased competitive pressure fromprivate labels, led to a reduction inadvertising spending, especially for brandedgoods, most markedly towards the end ofthe year. In fact the advertising marketgrew without a recovery in consumerconfidence and this benefited above all TVadvertising. In the absence of a recovery inconsumer spending, advertisers attemptedto stimulate demand by earmarking greaterproportions of their budgets to the mediumthat in general is most effective and offersthe greatest visibility.Towards the end of the year however, themarket returned to an appreciation ofcompanies with solid fundamentals andtherefore better able to guarantee a highlevel of cash generation and dividenddistribution. The DJ Stoxx Media closedwith an increase of around +3%.
Performance of the Mediasetshare price in 2004
In absolute terms, Mediaset share pricereturned to the level of the beginning ofthe year, closing with a slight reduction of0.9% at EUR 9.33. The minimum price ofEUR 8.2 was reached on 12th August andthe maximum of EUR 10.0 on 26th January.On 2nd December the maximum intradaywas reached at EUR +10.1.If we exclude the exceptional performanceof Spain’s Antenna 3, over the year Mediasetremained in line with the median ofEuropean broadcasters with a superiorperformance at the end of the year thatwas an average of 10%.
The main factors affecting theshare price
Factors of a general and exogenous naturethat had a negative impact on performancesin the media sector, also had an effect onMediaset’s share price. Towards the end ofthe year, however, there were also somepositive endogenous signals: in particular,the trends in advertising sales led to repeatedupgrade analysts’ expectations for theadvertising market. The management thenalso repeated its established skills in keepingtelevision costs down also in 2004, whichstimulated an increase in cash generationand a steady improve in estimates of thecompany’s results. The successful listing of Telecinco on 24th
June 2004 (+18% on the placement priceto EUR 10.5) and the launch of Pay-per-viewon the digital terrestrial platform helped tosustain the share price, particularly in thesecond half of the year.
Mediaset Shares: 2004 volumesMediaset shares in 2004 recorded averagedaily trading volumes of 5.4 million, whichcorresponds to an average value of morethan EUR 50 million, in other words, 9%more than the volumes of the previousyear. In total, the number of Mediasetshares traded during the year on the Milanstock exchange came to more than1.4 billion, which is 121% more than thecompany’s share capital. The record of dailytrading was reached on 18th June 2004 (onthe occasion of the Telecinco listing) witharound 26 million shares, while the lowestlevel was reached on 31st December 2004,with around one million shares traded.
A breakdown of Mediaset’s shareholderstructure as at 31/12/2004Fininvest Group is Mediaset’s main share-holder owning 50.8% of the company’sshare capital. The remaining 49.2% is floated on the market.From a geographic point of view, Mediaset’sfloating shares are well distributed in differentmarkets: around 23% is held by Italianinvestors and around 77% is in the handsof international investors. Of these, thecountries that stand out for their interest inMediaset shares are the US and the UK,with around 35% and 17% respectively ofthe total float, followed by Germany andFrance, with around 10% and 8%respectively. The remaining 8.2% isdistributed mainly in Japan, Asia and therest of Europe.
212030%
ItalyThe history and activitiesof the Mediaset Group
2004EUR m % share
Media 2003EUR m % share
% change
35.6%
56.0%
4.9%
2.4%
1.1%
100.0%
2,888
4,552
400
192
90
8,122 7,564
37.6%
54.5%
4.3%
2.5%
1.1%
2,843
4,124
329
187
82
100.0%
1.6%
10.4%
21.7%
2.7%
9.3%
7.3%
Television
Radio
Outdoor
Cinema
Total
Italian advertising market 2004 (source Nielsen Media Research) net figures
Operating profitability (the highest among Europeanbroadcasters)
2004 was an historic year for Mediasetposting its best performance, in terms ofresults and cash generation, since its listingin 1996. Those results arrived 27 years after thedebut of commercial television in Italy.It all began in 1978 with Telemilano (whichbecame Canale 5), a local Milan-basedbroadcaster that became national in 1980.Canale 5 was subsequently joined by Italia 1(bought from the publishing group Rusconiin 1982) and Retequattro (acquired fromArnoldo Mondadori Editore in 1984).Since 1984 the television area of theFininvest Group (known as RTI) has had thesame basic structure as it has today:three national analogue networks supportedby an advertising company, called Publitalia ‘80,that exclusively collects advertising for allthree channels, and two other companies,Videotime, that manages TV technologyand production activities, and ElettronicaIndustriale that guarantees signal distributionthrough the management of thebroadcasting infrastructure.Since then the importance of commercialtelevision has grown constantly in terms ofaudience, revenues and operating profits.From 1996, RTI, Publitalia, Videotime andElettronica Industriale have been part ofone group known as Mediaset.This was listed on the stock exchange,opening up the company to both importantinstitutional investors and private investors(around 250,000).
Telecinco - the Spanish broadcaster withwhich the Mediaset Group has been involvedsince 1997, initially with a minority stakeand subsequently, since 2003, as the majorshareholder (50.1%) - was listed on theMadrid stock exchange in 2004.2004 was also the year that saw the debutof digital terrestrial television in Italy, aninnovative signal broadcasting system thatuses standard aerials (a dish is not necessary)and a small set-top box.This can be bought thanks to a governmentsubsidy aimed at encouraging the spread ofthe digital platform in Italy. Now let us turnto a more detailed look at theorganisation of the Mediaset Group in itstwo main operation: Italy and Spain.
The Mediaset Group - the television holdingcompany of the Fininvest Group - is Italy’sleading commercial television operator andone of the world’s largest media companies.Mediaset S.p.A., was listed on the Milanstock exchange in July 1996 and is one ofItaly’s most profitable listed companies.Consolidated net revenues from the Italianbusiness reached EUR 2,649.4 million(+9.3% compared with 2003). Operatingprofit (EBIT) was EUR 788.3 million (+21.3%).Operating profitability reached 29.8% (26.8in 2003) and pre tax profit came to EUR740.9 million (+35.4%). Net profit came toEUR 435.9 million (compared with the EUR349.2 million of 2003), while characteristiccash generation, net of income and chargesfor equity investments and the payout ofdividends reached EUR 468.3 million,compared with EUR 282.9 in 2003.
AdvertisingAdvertising sales for the three channels aremanaged by Publitalia ‘80, the group’sexclusive advertising sales house and Italy’sleading advertising sales company.Publitalia’s activities extend across Europethrough its subsidiary, PublieuropeInternational Ltd, a London-based companythat collects advertising for Europe’s leadingcommercial broadcaster. It also assistsforeign clients and multinationals’headquarters with their activities in Italy. In spite of the European FootballChampionship and the Olympics broadcast
by Rai (the state owned broadcaster) in2004, Publitalia’s advertising revenues cameto EUR 2.9 billion (+9.1% on the previousyear). Mediaset’s advertising arm alsoincreased its number of clients to 1,100.In 2004 the Italian advertising market wasworth EUR 8.1 billion (+7.3% comparedwith 2003).Radio was the media that most benefitedfrom the market dynamics (+21.7%).Followed by television with +10.4%. While,in spite of a crisis in terms of circulation fornewspapers and in terms of readership formagazines, print media ended the yearwith an increase of 1.6%. There was alsogrowth in cinema advertising (+9.3%) andoutdoor (2.7%).
The recovery in the advertising marketwas the result of marked increases in theinvestments in all sectors with theexception of FMCGs, which still accountsfor 35.7% of the whole. After a very positive2003 (+4.6%), FMCGs ended the yearat essentially the same level. The mostmarked increases came from telecoms(+28.8%), financial services and insurance(+23.7%), publishing (+20.4%), retail(+15.8%) and the automotive sector(+13.3%). Publitalia also recordedsignificant performances in the area definedas Other sectors: industry/construction+ 54.9%, leisure +52.2%, audio/video+39.7%, personal accessories +38.2%,homewares 14.9% and motorcycles +14%.
2322
The television channels
From the left,Gianni Modina Director of Canale 5,Luca Tiraboschi, Director of Italia 1,
Giancarlo Scheri, Director of Retequattro
24 ore Day Time Prime Time
46.440.8 40.5 42.6
46.4 46.8
Commercial target Spring 2004
Rai
Mediaset
The group’s generalist channels - Canale 5,Italia 1 and Retequattro - are managed byRTI S.p.A.. They, either directly or via itssubsidiaries, oversee the development andbuilding of the schedules, original programmeproduction, the acquisition and managementof the rights library and the managementof the signal distribution network. RTI alsoproduces content for distribution throughother platforms, such as pay-TV, internetand mobile telephones.In 2004 each channel broadcast 8,784hours of programme, for a total of 26,352hours, 54.8% of which was made up ofin-house productions.The table on page 23 shows the 2004programming schedule broken down intochannels and programme types, andsubdivided into in-house productions andlibrary products.Mediaset’s channels ended 2004 with
combined 24-hour audience share of 43%,in line with the excellent results of thethree-year period 2000-2001-2002 andfollowing the extraordinary, and in manyways unrepeatable, performance of 2003.Once again the strength of Mediaset canbe seen in the commercial target (15-64year) with 44.6% audience share in the24-hour.The year for Auditel ended with a TotalAudience of nine million individuals (+1.6%),a figure that has grown every year in the24-hours since 1995. The overall increase isthe result of a consistent improve in theMay-August period (with a peak of +8%).This is in part attributable to the EuropeanFootball Championship in June and theOlympics in August. In the final quarter,however, the total audience showed a slowdown compared with the previous year.
Retequattro continued its positive primetime trend, where it achieved its best resultin the last 10 years: 8.9%. Very positive toowere the figures for the over 65s for whoRetequattro is the third most popular in 24hours after Rai 1 and Canale 5.
For the third consecutive year Italia 1 wasthe clear third most popular channel inprime time with an 11.2% (Rai 2 ended theyear at 11.1%). The channel continues tobe the favourite channel of children up to14, both in day-time and in the 24-hours.
Canale 5 reached a 22.5% day-time audienceshare, 0.2% ahead of Rai 1, while in primetime, the figure was 22.2%. Over the 24-hours the channel recorded audience of22.4% among individuals (all Italians) andconfirmed its leadership in the commercialtarget (15-64 years) with a 24.1% share.
The “audience guaranteed period”
In spring 2004 (25/01 to 29/05, excludingthe week of the Sanremo Festival) Mediasetoutperformed Rai in all different air time,both among individuals and in thecommercial target.Canale 5 outperformed Rai in both the 24-hours and day time; Italia 1 confirmed itsposition as Italy’s third most popularchannel, ahead of Rai 2, in the 24-hoursand early evening; Retequattro achievedits best ever prime time audience (9.1%) in“Audience guaranteed period”. Since 1998and outperformed Rai 3 both in day timeand the 24-hours. Mediaset ended the2004 autumn season (from 26th Septemberto 4th December) with 42% audience sharein the 24-hours, 42.3% in day-time and40.7% in prime time. This partial weakening of the position ofour channels worked to the advantage notonly of Rai (Rai 1 grew in prime time andRai 2 improved across all the bands), butabove all to other satellite broadcastersthat, compared with the previous spring,added more than a percentage point acrossall the time bands.However, detailed analysis of the monthlyfigures within the seasons shows that theresults of our channels, following a difficultstart, improved up until the first week inDecember.
2000 2001 2002 2003 2004
8,848 8,915 9,095 9,140 9,284
TV in Italy (24 hours)Viewers (m)
24 hoursShareindividuals 2004
PrimeTime
Day Time
22.4%
11.6%
9.0%
43.0%
22.5%
11.7%
8.9%
43.1%
Canale 5
Italia 1
Retequattro
Mediaset
Audience share
22.2%
11.2%
8.9%
42.3%24 ore Day Time Prime Time
44.643.8 43.7 44.8
44.5 45.1
Individuals Spring 2004
Rai
Mediaset
Programme breakdown (hours) 2004
Type
Films
TV movies
Miniseries
Telefilms
Teleromanzi
Sit-coms
Soaps
Telenovelas
CartoonsTotal library
News
Sport
Entertainment
light
talk shows
music
quiz-game-shows
reality
soft news
Arts
Soaps
Miniseries, TV movies, telefilms
Sit-coms
TV sales promos
Total in-house production
Total
Mediaset total
4,101
1,074
82
3,452
96
777
499
384
1,449
11,914
4,810
1,001
5,558
1,988
582
15.6%
4.1%
0.3%
13.1%
0.4%
3.0%
1.9%
1.5%
5.5%
45.2%
18.3%
3.8%
21.1%
7.5%
2.2%
14,438 54.8%
26,352 100%
420
713
836
1,019
742
1.6%
2.7%
3.2%
3.9%
2.8%
263
697
314
1,053
1.0%
2.6%
1.2%
4.0%
Canale 5
9.8%
3.6%
0.1%
6.7%
0.5%
1.8%
1.4%
0.0%
0.0%
23.9%
31.3%
0.3%
33.1%
15.5%
6.2%
862
317
6
589
48
157
120
-
-
2,099
2,748
29
2,909
1,360
545
76.1%6,685
100%8,784
0.3%
4.5%
6.1%
0.5%
0.8%
22
398
540
44
68
3.0%
3.4%
0.9%
3.3%
263
299
82
286
Italia 1
12.1%
5.0%
0.5%
20.1%
0.0%
7.1%
0.0%
0.0%
16.5%
61.2%
8.9%
10.1%
10.7%
3.8%
0.4%
1,062
438
40
1,762
-
621
-
-
1,449
5,372
785
891
939
333
37
38.8%3,413
100%8,784
2.1%
0.9%
3.3%
0.3%
0.0%
182
76
288
23
-
0.0%
2.9%
2.6%
3.6%
-
251
231
315
Retequattro
2,177
319
35
1,101
48
-
379
384
-
4,443
1,277
81
1,710
295
-
24.8%
3.6%
0.4%
12.5%
0.5%
0.0%
4.3%
4.4%
0.0%
50.6%
4,341 49.4%
8,784 100%
14.5%
0.9%
19.5%
3.4%
0.0%
216
239
8
952
674
2.5%
2.7%
0.1%
10.8%
7.7%
-
147
-
452
0.0%
1.7%
0.0%
5.1%
“Generalist television continues to be the only medium able to speak to all Italians”Censis report, January 2005
2726
Mini-series 2.9%
Mediaset library 2004
Various 12.8%(Music, Documentaries,
Variety, Drama, etc.)
Films 49.4%
Cartoons 8.0%Soap Operasand Telenovelas 0.4%
Telefilms 8.8%
TV movies 17.7%
Moto GP exclusively on Italia 1:Valentino Rossi
Programme production
In 2004 RTI S.p.A produced 44.5% of thetelevision programmes broadcast by theMediaset channels (+6.1% compared with2003). The overall growth in productionincluded a substantial contribution from theNews area (+33%). Canale 5 produced two new programmes:L’Antipatico, presented by the editor of thenewspaper Il Giornale, Maurizio Belpietroand Claudio Martelli reports. The formergovernment minister presented a series ofspecials, including a programme dedicatedto Judge Falcone. In the day-time there wasa new format Tutte le mattine, created andpresented by Maurizio Costanzo. Amongthe evening musical shows, the specialdedicated to Gianni Morandi was particularlysuccessful. Other new features included:Il Teo, Arrivano i nostri, Volere o volare,L’imbroglione, Sandra e Raimondo Show,Armi e bagagli and Changing Room.Italia 1 introduced Giallo 1 for the News,La fattoria, Bisturi, Superciro, Campioni,Il gioco dei nove, Cronache marziane.In music: a double edition of Top of thePops, edited highlights from Festivalbarand the concert by Vasco Rossi. Retequattro offered new programmessuch as Cosa non farei and Top secret.In addition to the concerts of theFilarmonica della Scala; a special dedicatedto Lucio Battisti was particularly successful.The hours produced in 2004 for the threechannels, net of soaps and drama, increasedby 6.1%, all in the day-time band.The contribution of the News area wassignificant also thanks to Lucignolo andL’alieno on Italia 1, and La zona rossa andSolaris of Retequattro.
Film producers/distributors
Mediaset also buys Tv right packages bothfrom national and international operators.The acquisition of European product isimportant in respecting the broadcast andinvestment quotas foreseen by Europeanregulations. Very important is the supplyrelationship with the sister-companyMedusa Film S.p.A., a leading operator inthe film distribution sector. In 2004 theMediaset Group and Medusa Film reacheda three-year agreement for the acquisitionof the most important films produced byMedusa Film in 2004, 2005 and 2006.2004 also saw supply agreements withEagle Pictures, Cattleya and Nexo, three ofthe country’s leading film distribution andproduction companies.
In-house TV drama productionMediaset Group has the know-how andorganisational structure to select projectsand to develop the production of TVmovies, mini-series and popular TV dramaseries. Such products are created in-houseor in cooperation with leading internationalpartners and in some cases are soldinternationally so contributing to coveringproduction costs. 2004 was characterisedby a level of internal production in line with2001-2003 period and was aimed atreinforcing the Group’s core business. Thishas led to drama becoming a central andcharacterising feature of the schedules ofMediaset’s channels. Sequels to long series(telefilms and soap operas) were confirmedand projects were defined for the productionof high profile mini-series related to currentaffairs, literary classics and big Italianpersonalities. It is worth to mention the exclusiveproduction agreement, which has beenrenewed for 2005 and 2006, with Tao DueFilm, one of the leading operators in thesector with which Mediaset has had asupply contract for many years. In the recent past this cooperation hasled to the production of the mini-series(Ultimo, Ultimo 2: La sfida, La Uno Bianca,Il Testimone) and some very successfulseries (Distretto di Polizia and R.I.S.).On 28th July 2004, in line with the letter ofintent signed in 2002, the Mediaset Groupacquired from Endemol Italia S.p.A. (whichowns the other half of the company) 50%of Mediavivere, at a cost of EUR 0.4 million.Mediavivere is jointly managed by Mediasetand Endemol Italia. It exclusively developsand produces the national Soap Operaproduct for the Mediaset Group. It is ableto exploit the synergy derived from a detailedknowledge guaranteed by the MediasetGroup and the productive effectiveness ofEndemol Italia in content production.In 2004 the company was commissionedto produce the soap operas Vivere andCentovetrine, also managing the rightsdistribution across all possible channels.
The library
The Mediaset Group has continued tostrengthen its international rights library.The following are some highlights of thenumerous agreements reached and projectsdeveloped:• the acquisition, in line with existing multi-year agreements with American majors for:La Mummia-Il ritorno, Ocean’s eleven-Fate ilvostro gioco, Panic Room, Harry Potter e la
Acquisition oftelevision rightsMediaset S.p.A. and its subsidiary RTI S.p.A.have Italy’s most important rights libraryand one of the biggest in Europe.The acquisition, development and productionactivities are managed by RTI S.p.A., whichalso has the objective of managingMediaset Group’s television rights assets,which are constantly fed from:
American MajorsThe Mediaset Group has stipulated multi-yearagreements with the leading Americanproducers and distributors (Universal,Twentieth Century Fox, DreamWorks, SonyColumbia and Warner Bros. International)that foresee the acquisition of rights for anaverage period of 5 years, with the possibilityof 4-5 TV passage.During 2004, the Mediaset Group signed acontract with Warner Bros. International forthe supply of rights for films distributed inthe 2000/01 to 2003/04 seasons.In December another agreement wassigned with Universal Studios Int. B.V.regarding movies that had their theatricalreleases during 2004 and 2005.
International television producersThe group also has important andconsolidated rights acquisition relationshipswith American and European producers forthe supply of TV movies, soap operas, mini-series, and TV series. This kind of TV products, which are made seasonally, creates a longlasting relationship between producer andbroadcaster and makes it possible to buildloyalty with our viewers.
Camera dei segreti, Dottor Dolittle 2, Matrixreloaded, I Perfetti Innamorati,A Beautiful Mind, Stuart Little 2, CodiceSwordfish, La Tempesta Perfetta, Il Pianetadelle scimmie, A.I.-Intelligenza Artificiale,Come Cani e Gatti;• the acquisition of the rights for the TVseries: The OC, Adventure Inc., Ewerwood,Like Family, Tru Calling, Paso Adelante eSaint Tropez;• the acquisition for rights for the newepisodes of successful TV series such as:Beautiful, Sentieri, Squadra Emergenza,Smallville, Law & Order, Criminal Intent,Siska, 24, Nip’n Tuck, West Wing,Ally Mc Beal;• the acquisition, for the current TV season,of the films: La leggenda di Al, John & Jack,Il Signore degli Anelli-le Due Torri,The Mothman Prophecies-Voci dall’ombra,Il Principe e il Pirata, Insomnia,High Crimes-Crimini di Stato, Ali, Da Zero aDieci, as per agreements for films withtheatrical releases in 2002 and 2003 withthe sister company Medusa Film S.p.A.;• the production orientation focused onlonger series has led to the production ofsequels to drama series such as Carabinieri.It has also led to the launch of production
of sequels to Distretto di Polizia and Elisa diRivombrosa, which in their initial series metwith wide audience approval, and thelaunch of a new series called: 48 ore;• the production of a number of prestigiousseries, in terms of subject, cast and authors,such as: Karol, the story of a man whobecame Pope, Don Gnocchi, GiudiceMastrangelo, E poi c’è Filippo,Vite in gioco, Caterina e le sue figlie.Of particular importance was the productionof the sixth series of Vivere and the fourthseries of Centovetrine (Italian soap operaseach with 230 episodes) and the poductionof the new episodes of the sit-comsCamera Cafè and Love Bugs.
99%Italians that who receiveMediaset’s analogue channels
28
Programme productiontechnology
The technology for the production oftelevision programmes (in-house production)is mainly concentrated in the subsidiaryVideotime, which guarantees thetechnological maintenance and developmentof the production infrastructure (studios,post-production and graphics units andmobile studios).In 2004, a new news production centrewas completed in Rome Palatino.The restructuring of the building and theinstallation of new equipment have madeit possible to transfer the editorial staff,studios, editing and post production unitsfor TG5 and the Rome desks of Tg4 andStudio Aperto all to a single location.This concludes the reorganisation ofVideotime’s production process in 4production centres, divided into 2 geographicareas (2 centres in Milan and 2 in Rome)and per product (entertainment and newsfor each geographic area).The advent of digital technology has mainlyaffected the first phases of the televisionproduction process: production (in studio)and post production (in editing studios).In this way, 2004 also saw the digitisationof two studios in the entertainmentproduction centre in Milan and theacquisition of the first 9 high definitionstandard cameras. In the second half of theyear work was begun on the creation of anew editing area at the entertainmentproduction centre in Milan (Cologno) wherethe majority of the centre’s editing, postproduction and graphics facilities will beconcentrated.
Signal distribution
Mediaset signal distribution network, wichis owned by the 100% subsidiary ElettronicaIndustriale, uses 1,700 technology towersto reach 99% of the popolutaion.On its site, Elettroncica Industriale is alsohosting the broadcasting systems of otherimportant national broadcasters, includingRTI (3 analogue and 1 digital networks),Prima TV (Mux D-free) and Europa TV, otherlocal broadcasters and mobile telephoneoperators. The Mediaset Group’s network isan infrastructure that is not only used forthe transport of the television programmesbroadcast, but also for the transfer ofsemi-finished signals from any point of thenetwork to the television production centreswhere the programmes are put together(contribution system).In May the so-called Gasparri Law(Law N° 112 of 3rd May 2004) was definitivelyapproved which, in addition to reorganisingthe national broadcasting system, alsoindicates the steps towards the transitionfrom the experimental phase to theintroduction of the digital signal in Italy.Consequently the subsidiary ElettronicaIndustriale is preparing to take on the roleof network operator, earmarking thenecessary resources (land, technical facilitiesand pylons) to guarantee the managementand supply of electronic communicationsnetworks using digital terrestrialfrequencies.In 2004 RTI proceeded with the acquisitionof television frequency from local operatorwith a view, through the digitalisationprocess being carried out by ElettronicaIndustriale, to reaching coverage of 65% ofthe population. At the end of the secondhalf of the year a project was launched toexploit the excess capacity of thebroadcasting systems of the RTI multiplex.At the same time engineering and supplywork was carried out to develop the networkwith a view to extending its coverage.Elettronica Industriale also completed thedigitalisation of the network whichguarantees the operation of the Prima TVdigital multiplex.The Master Control Room at Rome Elioswas completed and the project to replaceone of the digital backbones was continued.The former will make it possible to managethe signal broadcast network from the macroarea centre and all “semi-finished” productsfrom Rome to Milan and vice versa.The latter will increase the transport capacityfor the television signal across the country.
3130 3130
The digital terrestrial team;in the front row Gina Nieri,
executive directorof Mediaset
Multimedia activities
RTI operates in multimedia activities throughits RTI New Media department which hasthe task of producing services and contentswhich can be used on different platforms(pay TV, digital terrestrial, internet, teletextand telecoms). It aims to develop newsynergies and to promote content extensioninitiatives based on a core business that isfocused on free-to-air generalist television.
Thematic channelsRTI New Media continued in its activities asa content provider for Sky in the area ofthematic channels. It has been managingthis activity since 1998, first with HappyChannel, then with Duel TV and MT Channel,and recently with IT! Italia Teen Television.RTI’s thematic channels have reinforcedtheir identity building awareness, audiencesatisfaction and audience share as indicatedby the Eurisko Audistar Research.
Internet, teletext and servicesNielsen/Net Ratings figures for Italy estimatean “active population” of more than 17million users (in December 2003 the figurewas just over 13 million). In this context thesites run by RTI New Media (i.e. all of theMediaset sites) are visited by more than 2.1milion unique users monthly (1.8 million in2004). The most important are:Mediaset Ondine, Jumpy, TgCom.RTI New Media, above all, manages thetelevision-based vortal Mediasetonline(www.mediasetonline.com) which is areference point for infotainment in theItalian market. From Mediasetonline it isalso possible to access the sites of Canale5, Italia 1 and Retequattro, and the sitesof a number of successful programmes.RTI New Media also pays particularly closeattention to entertainment for youngpeople on the web via a dedicated website,Jumpy.Also in 2004, TgCom further consolidatedits position among Italian online informationsites, immediately after Repubblica.it andCorriere.it (source Red Sheriff). It increasedthe number of average daily page views,from 700,000 in 2002 to more than 3.5million during the week in the last quarterof 2004. At the same time, unique users arenow more than 1.5 million per month.The teletext service of the RTI channels,Mediavideo, which was launched in 1997,is a multimedia television information servicewith 800 pages that are highly innovative interms of content and graphics and whosestrong points are ease-of-use, thedifferentiation of the proposals by channel,and the up-to-date variety of content.The service is consulted monthly by around20 million people.
Since 1st November 2004 RTI’s digital terrestrialplatform has broadcast Mediavideo Digitale,a service that aims to:maintain variety greatof information that characterises theexisting analogue service, offer advertisersnew space for promotional activities,maintain a loyal group of users, extend thepotential audience and make the layoutmore appealing and easier to use.It does this whilst optimising the bandwidthavailable so reducing the time users have towait to access content (download time is 15seconds and occupies only 300 kb/s).It is a single MHP application that includes5 sections: News, Sport, Stock Markets,Weather, Chat.The journalistic content of both the analogueand digital versions of Mediavideo isprovided by TgCom’s editorial staff.
Sale of servicesDuring 2004 the sale of services linked to(mobile and fixed-line) telephones continued.In the mobile sector the aim is to provideinnovative content and services in twodirections that are synergic with the group’sother channels:• brand extensions, aimed at leveragingbrands/formats that are already wellestablished;• interactivity, aimed at creating interactivemoments (voting, polling and inboxes, orthe idea of SMS during broadcasts) betweenthe users and the most successful televisionprogrammes.During 2004 RTI New Media consolidatedits existing services (for example, TgCom’sSMS and voting services), produced newVideo services directly for mobile phoneoperators (for example 93° Minuto forH3G’s 3) and launched the games portalJava in cooperation with NeoNetwork.In 2004 RTI also continued experimentingwith a TV retailing project. Through inMediaShopping logo, viewers of Mediaset’sthree channels are offered high quality telesales windows. The creation of Press TV S.p.A., 50% jointventure between RTI and Arnoldo MondadoriEditore, has made it possible to developmultimedia editorial projects that areclosely connected to successful televisionprogrammes.The first project involved the creation of aweekly sports magazine Controcampo, thatstarted circulation at the beginning of the2002-03 football championship.It is an innovative magazine in terms ofconcept with editorial, technical, productionand distribution characteristics similar to anewspaper and it is published everyMonday.Publication also continued in 2004 of
another three periodicals linked towell-known TV programmes:La macchina del tempo, Amici di Maria DeFilippi and Grande Fratello.
Digital terrestrial As foreseen by the Gasparri law, Mediasethas begun broadcasting its programmes ina digital format. Digital terrestrial is aninnovative signal broadcasting system in adigital format that can be received using astandard aerial (without the need for a dishor other special aerials) thanks to a digitaldecoder that can be connected to thenormal aerial input.The main advantages of a digital signalover the analogue signal are:• programmes can be seen with a higherimage quality; in particular the visualperception of the digital video signal isimproved by the elimination of the typicalinterferences of analogue broadcasting;• the quality of the audio/video signal isuniform across the entire reception area;• digital broadcasts can be seen in differentformats (e.g. 4/3 or 16/9) and otherlanguages can be selected for films, whichcan be heard in the Dolby Digital format;• digital technology is multichannel, whichmakes it possible, according to the availablebandwidth, to extend the number of availablechannels. In fact using the digitalbroadcasting a single frequency can transporta number of programmes compared withthe single programme allowed by analoguesystem;
• Interactive programmes can be createdand viewers can actively partecipate in thecontent of the programme or haveadditional related information.Through digital terrestrial television theMediaset Group can innovate the offer oftraditional television entertainment as wellas providing a range of highly useful servicesto its viewers. It can also make it possibleto exploit “premium” content through aninnovate pay-per-view system.In 2004 RTI and its subsidiaries concentratedtheir activities on the development andimplementation of all the technologicalinfrastructure necessary for the broadcastof the digital signal and the launch ofMediaset Premium.The approach to digital terrestrial televisionhas been made in four separate phases: thepilot phase “Trial DDTV”; the broadcastphase for “National Digital Terrestrial TV”;the launch of a new channel, Boing, andfinally the phase involving the identification,preparation and launch of the MediasetPremium pay-per-view offer.
3332 3332
The Serie A teams for whichMediaset has rights
JUVENTUS
ROMA
MILAN
SAMPDORIA
INTER
MESSINA
ATALANTA LIVORNO SIENA
On 20th November 2004, RTI launchedBoing, the first free-to-air channel dedica-ted to children and conceived specificallyfor digital terrestrial TV. The channel is theresult of a 51% jont venture between RTIand Turner Broadcasting System Europe, acompany of the Time Warner Group andowner of the rights to some of the world’smost popular cartoon characters (Yogi Bear,The Flintstones, Scooby-Doo, etc.).Aware of the potential impact on the target,RTI and Turner have developed a schedulethat is not entirely entertainment, butincludes a tool with which parents canexert control so ensuring a balanced use oftelevision. By combining the experience andcontent library of both Turner and Mediaset,Boing is today offering a generalist scheduleof very high quality: from cartoons to films,from TV series to documentaries andedutainment (a new type of programmethat combines education and entertainment).Boing is a channel that has been designedfor children, where they can learn and beentertained. Boing is a safe environmentthat has already won the approvalof parents.The channel has access to a vast list ofprogrammes from both the Time Warnerlibrary (the world’s largest for cartoons,2,000 characters and 8,500 Warner Bros.,MGM, Hanna Barbera series), and theMediaset one (which, with Italia 1, is Italy’smost popolar channel with cartoons and TVseries for children), as well as originalproductions and “ad hoc” acquisitions.
The channel BoingTrial DTTVIn 2004 the test project for digital terrestrialtelevision continued in Varese, focusing onboth the new interactive applications anddigital technologies.To date a sample group of 1,500 households(about 4,000 individuals) has been formedto monitor viewing behaviour and the useof interactive services in a complex,competitive and complete environment, inorder to identify the most appropriate andtargeted offer.
National Digital Terrestrial TVThe Mediaset Group has pursued its digitalactivities in the following ways: • the development of digital networks;• the increase in the digital content offer.Concerning the development of digitalnetworks, RTI has dedicated concertedefforts to extending the coverage of itsdigital multiplex, acquiring frequencies anddeveloping the distribution and broadcasttechnology along with the subsidiaryElettronica Industriale. The coverage of theRTI Multiplex, at the end of 2003, was51%. By the end of 2004 this was up to65%. In terms of digital content, RTIconsolidated and developed its supply byexploiting the opportunities presented bydigital terrestrial TV: hosting third partychannels in its multiplex and the enrichmentof interactive content in the three analoguechannels. RTI currently carries the following thirdparty channels on its multiplex:• BBC World, the world’s leading newschannel;• Class News, a business/finance channel;• Coming Soon TV, an film entertainmentchannel;• 24 Ore TV, a business/finance channel.RTI has also progressively extended therange of interactive services available,producing around 50 new applicationsoffered through the portals of Canale 5,Italia 1 and Retequattro.
Leveraging the enormous potential of digitalterrestrial technology, Mediaset Premiumoffers viewers the possibility of access tohigh quality content, payable on the basisof an unprecedented business model that isyet to be used elsewhere in the world.In fact, by purchasing a pre-paid card witha credit (EUR 18 in the first phase) viewersare free to choose what to watch withoutthe need for a subscription or registration.They can simply select the event andcontents that they want to see. Inspiredby the experience of mobile and fixed-linetelecoms operators, Mediaset Premiumcombines the pay-per-view formula, alreadyavailable on other digital platforms, withthe flexibility and transparency of the pre-paidform, creating the very first realpay-per-view platform.During 2004 Mediaset reached agreementswith Juventus, Milan, Inter, Roma,Sampdoria, Messina, Atalanta andLivorno (to which was added Siena in 2005)for the Italian broadcasting, on a pay-per-view basis, of their home matches viadigital terrestrial, cable and ADSL channels.This agreement stands for three years,starting with the current season (in otherwords the 2004-05, 2005-06 and 2006-07
seasons).Mediaset also acquired a pre-emption righton the possible renewal (from 2007 onward)of the encrypted rights for 6 of the 9 clubs.Consequently the Mediaset premium offerhas a central role in the Mediaset Strategyto affirm its position as the national leaderin the development of digital terrestrialtelevision. This confirms Mediaset’s vocationat a time when the multiplication of digitalplatforms puts a special emphasis on content,to play a leading role not only asbroadcaster but also in the key contentareas, like entertainment, news, TV dramaand sport.The Mediaset Premium project has beenorganised in two phases. The experimentalphase began on 10th January 2005 withthe sale of the pre-paid cards and the startof broadcasting on 22nd January (thesecard due to expire at the end of June 2005).In support of the initiative and with a viewto maximising audience satisfaction, a callcentre was set up and made operative, 24hours a day, seven days a week from 27th
December 2004.It provides users and potential customerswith all the necessary technical support andinformation.
Mediaset Premium
The second phase of the project willdevelop the offer of new content andintroduce new pre-paid cards that can bere-charged by customers through differentchannels, both physical and virtual.In January 2005 RTI reached an agreementwith La 7 Televisioni for the 2004-05, 2005-06 and 2006-07 seasons that extendsMediaset Premium’s pay-per-view footballoffer. Thanks to the acquisition ofencrypted paid broadcast rights for digitalterrestrial of the highlights, the programmeDiretta Premium can broadcast images ofthe Serie A teams linked to La 7 Televisioni(Bologna, Brescia, Cagliari, Chievo,Fiorentina, Lecce, Parma, Palermo andReggina). In this way Mediaset Premiumusers can watch, at the end of the first halfand at the end of matches, all of the goalsof the home matches of 17 Serie A teams.
22nd January 2005, the San Siro Stadium in Milan:the first match broadcast by Mediaset Premium
3636
Spain
Mediaset is the major shareholder ofGestevision Telecinco, the Spanish televisiongroup that runs one television channelsince early 90’s. Telecinco has played adetermining role in the development ofSpanish commercial television, becoming,in 1996, a point of reference in terms ofscheduling, innovation and profitability.In 2004 Telecinco Group achievedoutstanding results: consolidated netrevenues came to EUR 793.4 million(+22.8% compared with 2003). Operatingprofit (EBIT) amounted to EUR 294.0 million(+72.2%). Operating profitability was 37.1%(26.5% in 2003). Pre tax profit came toEUR 301.9 million (+76.5%).Net profit for the period was EUR 215.9million (compared with the EUR 122.6 of2003). Free cash flow, net of dividendpayouts, came to EUR 242.2 million, amarked increase on the EUR 138.0 of 2003.
The listingThe company was listed on the Spanishstock exchange on 24th June, following anInitial Public Offering, in which the financialpartners Hetha Erste Beteiligungs GmbH(Desdner Bank Group AG) and ICE FinanceB.V. placed their stakes, respectively 25%and 10% of the company’s share capital.The price per share of the offer was fixed atEUR 10.15, coinciding with the maximumprice of the range indicated in the prospectusand corresponding to a market capitalisationof EUR 2,503.4 million. On the first day oftrading, the share price opened at EUR
12.50. The IPO was very successful and therewas enormous market interest: beforeexercising the Greenshoe, theoversubscription was 25 times for theinternational institutional tranche; 32 timesfor tranche destined to Spanish investors;6.81 times for the Spanish retail tranche;2 times for the tranche dedicated to theemployees.Since the first day of trading, the share hasrecorded an increase of around 50% (EUR15,18 on 30th December), corresponding toa market capitalisation of EUR 3,744 millionand emerged as one of the most activelytraded stocks. At the end of the yearGestevision Telecinco was included in theIbex 35 index.
The programme “A tu lado” on Telecinco
7783938
2004EUR m %share
Media 2003EUR m %share
%Change
38.3%
43.1%
8.8%
7.2%
0.7%
100.0%
2,358.0
2,651.2
540.2
442.2
40.7
6,152.7 5,572.9
39.5%
41.3%
9.1%
7.6%
0.9%
2,203.1
2,300.3
508.2
422.3
47.6
100.0%
7.0%
15.3%
6.3%
4.7%
-14.5%
0.4%
1.5%
26.2
94.4
0.3%
1.3%
16.8
74.6
54.8%
26.5%
10.4%
Television
Radio
Outdoor
Cinema
Thematic TV Channels
Internet
Total market
Spanish advertising market 2004 - Source: Nielsen Media Research - net figures
Programme breakdown (hours) 2004
Type
Film
TV movies, mini-series, telefilms
Cartoons
Total rights
Game and quiz shows
Sport
Music & theatre
Documentaries & other
News
National drama
In-house production
Total
2004
11.4%
7.0%
4.3%
22.6%
6.5%
1.1%
2.3%
42.2%
21.7%
3.6%
77.4%
100.0%
997
611
380
1,988
567
94
205
3,708
1,910
312
6,796
8,784
2003
12.6%
10.5%
7.2%
30.3%
5.0%
0.4%
2.1%
37.2%
22.3%
2.6%
69.7%
100.0%
1,102
923
629
2,654
438
39
181
3,259
1,957
232
6,106
8,760
Change
(105)
(312)
(249)
(666)
129
55
24
449
(47)
80
690
24
-9.5%
-33.8%
-39.6%
-25.1%
29.5%
141.0%
13.3%
13.8%
-2.4%
34.5%
11.3%
0.3%
Broadcast unit truck
Telecinco advertisingrevenues (EUR m)
Broadcasting and content
Telecinco ended 2004 in first place for thewhole year with an audience share of22.1%, establishing itself as Spain’s leadingcommercial broadcaster, an unprecedentedresult in the 15-year history of Spanishcommercial television.Telecinco is also leader in the commercialtarget of reference. This consists ofindividuals in the 13 to 54 age range,belonging to the mid to high socio-economicclass and resident in urban areas with morethan 10,000 inhabitants. The channel’sshare in 2004 came to 25.2% (+0.7%on 2003).The excellent results achieved by Telecincoare due to the channel’s scheduling policy.In 2004 the group further developed atendency to include more in-house producedcontent in the schedules compared to theproportion given over to the broadcast offilm rights and series.This shift is reflected in the volume ofproduction of the two types of programmethat characterise and give profile to theTelecinco offer, i.e. news and informationand entertainment.
Advertising
The television advertising market in Spainis Europe’s fifth largest. It is second, afterItaly, in terms of total TV advertising revenues(according to Infoadex), 43.5% for TVbroadcasting. In addition to Telecinco, themain players in Spain are the state-ownedTelevisione Espanola, which has twochannels (TVE1 and TVE2); a privatecommercial operator, Antena 3, and afederation of local channels (automicas)that combine under the La Forta label.The digital satellite platform Digitel Plushas 1.7 million subscribers and a marketpenetration of 11%.In 2004 television advertising revenuescame to EUR 2,651.2 million (+15.3%),outperforming the total advertising marketwhich grew by 10.4%.The advertising revenues of the TelecincoGroup reached record levels: EUR 778.2million (+20.7% on 2003) and a marketshare of 29.7%, confirming the company’sposition as leader in the Spanish televisionadvertising market.The figures for the Spanish advertisingmarket, as reported by Infoadex, show agood overall recovery compared with 2003,when the total market grew by only 3%.Growth was, however, largely due to theperformance of television (43.1% of themarket, compared with 43.3% in 2003).In the same period print media went from39.5% to 38.3%.
1040
Internationaladvertising
International television channelsrepresented by Publieurope
London,headquarters of Publieurope
In the context of an advertising market thatis increasingly international and which hasbeen characterised in recent years byconcentration, Mediaset Group has createdPublieurope International Ltd..This company was founded in 1996 and asthe task of organising an adequate responseto cover the European continent, with theaim of generating additional revenues deri-ving from:• the development of new business inother countries;• constant contact with the headquartersof multinational clients.The beneficiaries of these activities areprimarily the group’s channels - Canale 5,Italia 1, Retequattro and Telecinco - but alsothose other channels that have commissionedPublieurope to sell their advertising airtimeoutside their national borders.Publieurope has developed over the yearsan articulated portfolio of media clients.This makes it possible to offerinternational advertisers, in addition to thegroup’s channels, the German channelsPro7, Sat 1, Kable 1, N-24 and DSF(together accounting for around 30% ofthe German audience) and Britain’sChannel 4, which gives advertisers accessto around 15% of the UK’s commercialaudience.The portfolio of products is completed bythe magazine titles of Mondadori Pubblicitàand by SBS Broadcasting, the Scandinaviangroup that has majority stakes in 10commercial networks in 8 countries.
This has also allowed Publieurope toestablish contact with various networksaimed at offering advertising products inBelgium, Holland, Sweden, Norway,Denmark, Hungary and Romania.The sales activities, which are run fromoffices in London, Munich, Paris andLausanne with the active cooperation ofPublitalia ’80 and Publiespana, has generatedvery satisfying results that consolidate thetrends of recent years.Of the significant revenues generated byPublieurope - 65% of which are for thegroup’s channels and other media - theadvertising sold to international clients isgenerally invoiced directly by the respectivenational sales companies.In particular, in 2004, of an overall volumeof business that generated around EUR 130million (of which 65% was for the group’schannels and 14% for Mondadori),recording an increase of 14% on theprevious year, the margin contribution wasworth EUR 7.7 million, and pre-tax profitwas EUR 3 million.
4342
Corporate socialresponsibility
Geographic distributionof employees in Spain
Madrid
Barcelona
Others centres
Total
Personnel
%
95.3%
2.0%
2.7%
100.0%
31/12/2004
1,102
23
31
1,156
Average age Ave. lengthof service
10.3
6.9
11.2
8.1
42.0
36.0
40.0
37.0
9.837.8
Executives
Journalists
Managers
Clerical staff
Total
Average age and length of service
2004 2003male female %male female %
10.0%
55.6%
46.7%
47.3%
45.7%
Executives
Journalists
Managers
Clerical staff
Total
Staff breakdown by role
8
55
54
410
527
61
53
63
446
623
11.6%
50.9%
46.2%
47.9%
45.8%
7
61
48
401
517
56
44
60
479
639
2004 2003
number %number %
Executives
Journalists
Managers
Clerical staff
Total
Staff roles
7.1%
7.4%
14.8%
70.6%
100.0%
312
324
648
3,083
4,367
7.0%
7.6%
15.3%
70.2%
100.0%
308
335
679
3,109
4,431
Italy 2004
Spain 2004
Average age Length of service
2004 20032004 2003
Executives
Journalists
Managers
Clerical staff
Total
Average age and length of service
15.2
9.5
14.7
13.2
13.3
16.5
9.6
15.0
13.4
13.4
46.0
43.0
43.0
40.0
41.0
47.0
43.0
43.0
40.0
42.0
2004 2003male female %male female %
20.7%
42.0%
42.0%
45.5%
43.0%
Executives
Journalists
Managers
Clerical staff
Total
Staff breakdown by role
66
120
283
1,370
1,839
245
165
365
1,661
2,436
21.2%
42.1%
43.7%
45.2%
43.0%
69
129
301
1,356
1,855
237
166
378
1,656
2,437
Since 10th September 2002, Mediaset hasadopted a Code of Conduct that outlinesthe company’s corporate social responsibilitytowards its employees and all its otherstakeholders. The Code defines the values recognised,accepted and shared by the group,and to which all operations, conduct andrelationships must adhere, within the termsof current legislation, national andinternational regulations and the principlesof freedom, dignity and respect fordifferences of race, gender, language,personal and social conditions and religiouscreed. In brief, the Code is a confirmationof the values of responsibility, correctness,legitimacy and confidentiality concerningcorporate information; the principles oflegality, loyalty and correctness in businessrelations, in the protection of competition,in relations with suppliers and national,European and international institutions;the centrality of human resources andthe protection of health and safetyof the same.
Human resources“The Mediaset Group recognises that itshuman resources are an element offundamental importance for its development.The management of human resources isbased on respect for the personal andprofessional characteristics of each individual”.(Art. 2 Code of Conduct - Mediaset Group).This declaration of the “centrality” of humanresources, which is consistent with the logicof the company’s business, is, in practicalterms, realised through management anddevelopment and initiatives in support ofhuman resources launched in 2004.The key points of the policy concerningthe professional development of the Group’semployees are:• professional growth within the company• limited recourse to outside resources andonly for critical roles• internal mobility aimed at valorisingindividual potential• the building of staff loyalty• attention to training
Composition and distributionof personnel in ItalyMediaset Group’s contract staff has grownin Italy since 2003. The number went upfrom 4,367 (4,275 if we consider onlythose with long-term full-time contracts)to 4,431 (4,292 full-time permanent staff).Turnover (which in 2003 was 2.5%) hasremained low at 2.2% in 2004.The distribution of staff across the country
is as follows: 69% in the Milan area(Cologno Monzese, MilanoDue and Lissone),19.5% in Rome and 11.6% in otherlocations.The profile of the staff in terms of age andlength of service is a demonstration of thecare taken to not waste professional skillsacquired over time through actions aimedat building staff loyalty.
Staff qualifications and career pathsAs well as a high average length of serviceand low turnover, the attention given tointernal staff development can be seenfrom the progressive movement of stafftowards higher levels.In this sense it is possible for individuals todevelop their skills, both specialised andprofessional, as well as cross-over managerialskills. They see their professional valuerecognised with new and/or biggerresponsibilities, along with the appropriateadjustments in remuneration.
Selection and recruitmentCareful selection processes aim to ensurethe recruitment of qualified young peoplewith the right basic skills, natural attitudesand motivation for the company’s needs.Mediaset is certainly a group with bigvisibility, as can be see from the more than7,000 applications received in 2004.
InternshipsIn 2004 the Mediaset Group cooperatedwith a number of universities and trainingschools to enable students to gain somework experience in the world of broadcastingand other areas of the group’s activities.During 2004, 151 internships were completed(95 in 2003) with an average of 80 days inthe company.
Equal opportunitiesThe Mediaset Group operates a policy ofequal opportunity that can be seen fromthe significant number of women amongthe total staff (43%) at all levels ofresponsibility within the company.These numbers have grown over 2004.
Safety at the workplace, preventionand assistance“In the context of its activities, the MediasetGroup aims to protect and guarantee thehealth and safety of its stakeholdersthrough the adoption of measures foreseenby relevant legislation”. (Art.12 Code ofConduct).The initiatives realised in 2004 in the areaof health and safety were principally:• a review of the documentation concerningthe evaluation of environmental risks andrisks of fire• environmental analysis for the control ofthe workplace with the monitoring ofchemical and biological pollutants,microclimates, electromagnetic fields, radongas, ionising radiation, noise andillumination, etc• checks of safety installations at all sitesand those of Elettronica Industriale.
4544
Training initiatives
The services centre for employees atCologno Monzese (MI)
The “Mediacenter” project
In line with the “centrality of the individual”,during 2004 the Mediacenter project waslaunched at the offices in Viale Europa 46in Cologno Monzese with a range of services.These include a Crèche, which opened on3rd May 2004, which occupies 320 m2 (380m2 outside) and which already in 2004welcomed 19 children. There is an extensivearea dedicated to time-saving services forthe staff including a bank, post office,bookstore, travel agency (for personal travel),a pharmacy, mini-market (selling bothspecialised foods and basic essentials) anda shopping area (where, depending on apre-established and rotating lists, differentmerchants offer their products at specialprices).A special agreement was also reached withthe transport authority of the Milan citycouncil for annual season tickets for publictransport with reductions of 20%-30%.
Personnel in Spain
The staff involved in Telecinco’s televisionproduction is concentrated in Madrid.The staff of Publiespana and the newsagency Atlas also operate from Barcelona,Alicante, Seville and Bilbao.The age and average length of service ofthe Telecinco Group shows a young anddynamic profile and loyalty to the companyis particularly high.Human resources are one of the criticalfactors in the success of the TelecincoGroup. In this regard, as for 2004, thepolicies followed were aimed at valorisingthose who have developed within thecompany in creative work and in theproduction of television content. Trainingplans have been implemented which aimto develop creative and management skills,improving knowledge of informationsystems, English courses, the use of newtechnologies, the prevention of risk in theworkplace and support for individualinitiatives.The figures show, also for 2004, that thepolicy of equal opportunities of the TelecincoGroup is in line with what has been achievedin Italy by the Mediaset Group. There is asignificant presence of women at all levelsof responsibility in the company.
Internal communication
Internal communication, which the MediasetGroup aims to continuously develop andimprove, has seen the introduction of anumber of initiatives.In addition to the traditional Mondaymeetings of the sales staff of Publitalia ’80,three meetings (general interest, businessand organisational) have been introducedfor the Group’s management. Moreover, for the second year, a conventionwas held for all Mediaset Group executivesand management at Monte Carlo (29th-30th
November 2004). This facilitated discussionand awareness of the company’s business,strategies and technological innovation.
Staff training
Mediaset has continued to increase itsinvestments in staff training. The figure forthe number of training hours during 2004shows that there was a continuouslyupward trend in all areas, in particular inmanagement training aimed mainly at recentgraduates and middle management.This interest in training, in addition to daily“on-the-job” training, is especially focusedon skills that cut across all of the staffstructure and roles that are the basis of anorganisational and managerial culture.
YOUNG GRADUATES PROJECTThis initiative, which was launched in 2002,has continued with a second cycle ofseminars, which ended in May 2004. Theyfocused on two areas of skills developmentin relationship management: “Giving,receiving and encouraging feedback”and“Assertiveness and negotiating ininter-functional relations”. In January 2004a training programme was launched for 30recently recruited young graduates whocompleted the 1st year cycle in April 2004.
MIDDLE MANAGEMENT TRAINING Between March and November 2004,following the positive results of a pilot courserun in 2003, the first year of “institutional”training for middle management began.It focused on a range of crossover issuessuch as “Interpersonal relations andcommunication”, “Problem solving anddecision making”, “The role of the teamleader”, “Project management” and“Self leadership”.
YOUNG EXECUTIVE TRAINING Cooperation with ISTUD also continuedin 2004 with the participation of recentlypromoted executives (from the industrialcompanies) in the general managementprogramme.
EXECUTIVE TRAININGA pilot executive training project was begunwith residential seminars that involved agroup of executives from different areas ofthe company: staff, content, operations andnews. Other executive training initiativeswere formed to develop specific competencesand to reinforce group cohesion.
PARALLEL SCENARIOSThe senior management of Mediaset, RTI,Videotime and Elettronica Industriale wereoffered the possibility of participating in 4meetings on issues closely related to thecompany’s business or innovation fromwhich to draw inspiration for their ownjobs. The objective was to stimulate curiosityand an openness to parallel worlds withrespect to television.
DEVELOPMENT OF PERSONAL COMPETENCESThrough company and inter-companyseminars the company has addressedindividual and group needs via thedevelopment of personal competences suchas “Public speaking”, “Interpersonalcommunication”, “Team building” and“Stress management”.A second area of training is that ofprofessional training. This aims to develop abroader understanding of individual rolesand a more complete professionalcompetence. Among these were theinitiatives introduced to meet the needsof specific departments or professionalareas, such as:• The Creative and Image CoordinationDepartment, Channel Promotion andScenery• Channel and Marketing Departments • Artistic Resources Department• Ad hoc seminars for the advertising salescompany to meet specific needs raised byarea managers.
In the context of professional training,operational training was also very important.Two very significant operational traininginitiatives involved the operations/productionsareas:
DIGITAL TERRESTRIAL PROJECT (new technologies, DI broadcast playoutsystem, the new master control room atCologno Monzese, etc.) conducted withcourses designed by professional areas,including classroom, laboratory andhands-on training.
NEWSROOM PROJECT Created to equip newsrooms with anadvanced system for the management ofagency news, running order and editing.
SPECIALISED COURSES For technicians on the systems they use:“audio for digital terrestrial”, “stereorecording” for audio technicians and RVM,and computer systems courses.
46
Mediaset’s commitmentto culture and society
La Scala, Milan.A concert by the Filarmonica broadcast by Retequattro
Mediaset and minors
ItalyMediaset’s adherence to Television’s self-regulatory code for the protection of minors,which was established in November 2002by the Italian Ministry of Communications,is an established element in a consolidatedapproach to the importance of therelationship between television and minors,which has been in practice since 1993,when the company implemented its own“Self-regulatory code” and signed up tothe “Code of conduct in relations betweenTV and minors” promoted by the CabinetOffice in 1997, but never passed into law:in conformity with the new document,Mediaset has confirmed its commitment to:• dedicating special attention to theprotected time band (16.00-22.30) withprogramming specifically designed forminors on at least one of the channels andexcluding from children’s programmes thebroadcasting of advertising spots andtrailers considered inappropriate;• reinforcing controls on prime timeprogramming through the coordination ofschedules in the early evening in order toensure - on at least one of the threechannels - the broadcast of programmessuitable for family viewing;• consolidating training efforts aimed atproviding clear information about programmes(e.g. through “labels” at the beginning ofprogrammes or special editions of newsbulletins) and to highlight in an immediatelyclear manner - during transmission - thetarget audience (with banner headlinesafter each commercial break).
SpainTelecinco has adhered to the “Convenio deSegnaletica” introduced by royal decree,which obliges television broadcasters toidentify programmes according to suitabilityfor age ranges. A symbol appears at thebeginning of every programme and at everycommercial break. In particular, programmesaimed at an adult audience are identifiedby a red visual signal accompanied by anaudio signal; programmes that areforbidden for children under 14 havea yellow symbol, while programmes thatare suitable for all ages have no symbol.
External initiatives
In 2004 the Mediaset Group was engagedin activities for the development of skillsthat are professionally related to the worldof commercial television, the field in whichthe Group is leader in Italy. These were asfollows:
CAMPUS MULTIMEDIA IN-FORMAZIONE The Campus Consortium was created byMediaset Group and Milan’s IULM University(Libera Università di Lingue e Comunicazione)with a view to creating an area of excellencefor training and research in the area of thedigital economy, media and communications,as well as in the different sectors involved intechnological innovation.The two courses that have been set up are:• Master’s in Journalism, a two-year coursefor outstanding graduates from all disciplines,also from specialised courses, with aninterest in the media and communicationsworld.• Master’s in Multimedia Managementwhich aims to offer, in a single course,detailed and articulated awareness ofgeneral management that can be fullyintegrated with technological, legal andcommunication competences.
MASTER PUBLITALIA ’80Operating since 1988, and established inthe panorama of post-graduate master’scourses for young people interested in acareer in marketing, communications orsales. Every year the course trains a groupof (34 for the XVI edition that ended in2004) young graduates, with brilliantacademic records, an excellent knowledgeof English and good managerial potential.The course lasts for 13 months, 10 of whichare in the classroom, and focuses on subjectsrelated to business strategy, marketing andrelated activities, and 3 months of trainingexperience with sponsor companies.The teaching staff includes both Italianand international university professors andconsultants.
COURSE IN ADVANCED DIRECTIONThis two-year course is coordinated by theFondazione Teatro alla Scala along withMediaset, Rai, the Piccolo Teatro of Milan,the Teatro d’Europa and civic schools ofMilan and the Paolo Grassi School ofDramatic Arts. It aims to train 15 studentsin theatrical, television and musicaldirection.The course, which began in December2002, includes 1,150 hours of theoreticallessons and 650 hours of on-the-jobtraining with one of the promoting bodies.
MASTER’S IN SCHEDULING ANDPROGRAMME PRODUCTION This initiative, which has been put togetherin cooperation with the sociology andcommunications department of theUniversità la Sapienza in Rome, is open to20 graduates and aims to train experts intelevision scheduling and programmeproduction. The course aims to produceprofessional resources able to manage allaspects of the television production process,from creation to planning, production andbroadcasting. The course lasts for 12months and includes 788 hours of classroomteaching which concentrate primarily ontelevision script writing, and 300 hours ofon-the-job training.
RTI COMMUNICATION ANDNEW CONTENT LABORATORY This initiative, which is run by MaurizioCostanzo, aims to experiment with newhybrid forms of content and language.It is divided into the following differentand articulated areas:• the Television school which aims to offertraining to scriptwriters, directors and theauthors of entertainment programmes;• the Television language researchlaboratory, was created to examine thedevelopment and changes in the languageof the small screen, with specific referenceto new technologies;• the Telecom Italia Digital CommunicationLaboratory, in cooperation with the Universitàla Sapienza in Rome and Mediaset, offersto some of the best students from thecommunication faculty of the Universitàla Sapienza in Rome the possibility ofexperimenting with new forms ofcontamination and cross-over of contentand different languages;• the Print Media Laboratory exists toconduct research and experiments in thecommunicative models and new languagesrelated to print media - newspapers andmagazines - aimed specifically at youngreaders.
ItalyThe great social commitment demonstratedby Mediaset over more than twenty yearswas confirmed in 2004, thanks to theactivities of Mediafriends ONLUS(a non-profit charitable organisation) whichwas established in 2003, in cooperation withMondadori and Medusa.The association has the task of creating,implementing and promoting events aimedat collecting resources for charity and thefinancing of targeted projects. On 22nd and28th September 2004, Canale 5 broadcasttwo prime time comedy and game showsLa fabbrica del Sorriso, a project entirelydedicated to the support of under-privilegedchildren. More than EUR 6 million was raisedfor sick children in hospitals, those withdebilitating diseases, for medical treatmentin under-developed countries and for researchand information of children’s diseases.• The tragedy in South East Asia ofDecember 2004 once again demonstratedthe generosity of the viewers of Mediaset’s
channels. Tg4, in cooperation withMediafriends and Cesvi, collected morethan EUR 3.2 million. Tg5, in cooperationwith Corriere della sera, EUR 9.5 million.Finally, Mediaset and Rai, through textmessages, collected, along with mobiletelephone operators, EUR 28 million.• For some time Mediaset has been engagedin cultural promotion, both through thesponsorship of events and bodies andthrough direct organisation. These includeAperitivi in Concerto, Mostra del Libro anti-co, Festa del Libro, Festa del Cinema andthe Premio Cenacolo.• For more than twenty years Mediaset hassupported the Orchestra Filarmonica dellaScala di Milano, through the production ofconcerts broadcast by the channels.For a commercial broadcaster like Mediaset,the commitment to support the activities ofthe orchestra represents an attempt tobring great music to a wider audience.• Since 1995 Mediaset has also beenrunning a film restoration programmeentitled Cinema Forever - Dedicated toCarlo Bernasconi: its purpose is the recoveryand the safeguard of some of the mostimportant films in the history of Italiancinema into the international collectivememory which is of unparalleled value.Cinema Forever, as well as returning filmsto their original condition, aims to organisescreenings, in cinemas and on television so
bringing the films to the attention of alarger audience. Among the titles so farrestored are masterpieces by Federico Fellinisuch as La dolce vita and 8 1/2, RobertoRossellini’s Franceso giullare di Dio andDeserto Rosso and L’avventura byMichelangelo Antonioni. On 30th March2004. Il Vangelo secondo Matteo byPier Paolo Pasolini was presented at theAuditorium in Rome.
SpainSince December 1999, Telecinco has run anoriginal project aimed at building viewers’awareness in 12 areas of social interest.In its fifth edition in 2004, the initiative,which is known as “12 meses, 12 causas”,allows Telecinco to be considered theSpanish broadcaster that pays the highestlevel of attention to social values, accordingto the listing compiled by the “FundacionEmpresa y Sociedad” which analysescorporate social responsibility.In “12 meses, 12 causas”, the channelmakes available programming and spots onthe theme of the month and the offer,during different programmes, of opinionsand background. The issues that arehighlighted each month are identified onthe basis of indications supplied by viewersand NGO professionals.
Mediaset SpARegistered Office20121 MilanoVia Paleocapa, 3Tel. +39 02 8541.1Head Office20093 Cologno Monzese (Mi)Viale Europa, 48Tel. +39 02 2514.1
RTI SpA20093 Cologno Monzese (Mi)Viale Europa, 48Tel. +39 02 2514.1
Publitalia ‘8020090 Segrate (Mi)Palazzo Cellini - Milano 2Tel. +39 02 2102.1
To communicate with Mediaset
Press and media relations20093 Cologno Monzese (Mi)Viale Europa, 48Tel. +39 02 2514.9156Fax +39 02 2514.9271e-mail: [email protected]
Investor relations department20093 Cologno Monzese (Mi)Viale Europa, 46Tel. +39 02 2514.7008Fax +39 02 2514.8535e-mail: [email protected]/investorcenter
Mediaset Group Creative Management
Creative director: Mirko PajèDesign: Raoul CilentoPage layout: Pasquale RizzelloPrinting: LEVA Arti Grafiche - june 2005
Photography by:giokappadue.it (cover / p. 4-29-45)Luca Cattoretti (p. 7-9-11-22)Francesco Lo Torto (p. 13)Vincenzo Di Cillo (p. 25)Dorna Sports S.L. 2005 (p. 27)Pigi Cipelli for Sorrisi e Canzoni TV (p. 31)Studio Fotografico Buzzi (p. 35)Guillermo Asian (p. 37)Willy Meneses (p. 39)Suzanne and Nick Geary (p. 41)A. Tamoni / Teatro alla Scala (p. 47)
