ANNUAL REPORT

2008 Group’s Consolidated Annual Report – Directors’ Report on Operations
technology-based broadcasting capacity offering. An option that has also opened the market to
mobile telephone operators.
Elettronica Industriale is therefore Italy’s leading network operator.
The firs step of the switch-off procedure (ended during 2008 with the conversion to digital
technology of all broadcasting systems operating in Sardinia) is supposed to go on following the
agenda envisaged by the italian Ministry of the Economic Development, which previews the
complete conversion of all the broadcasting system on the entire national area within 2012.
With reference to the signal transportation infrastructure, on 2008 the implemetation of the
integrated distrubution and contribution network from and to the various television production
centers is going on. This infrastructure will allow to build during the next two years a
sophisticated hybrid network (radio-link and optical fibre) using the SDH/IP technology, which
will assure and high-speed inter-connectivity (10 Gbit/s) between all the operative headquarters
and an improved network reliability towards every single broadcasting site.
Production of TV dramas and films
In 2008, a joint venture was established between Medusa Film and Taodue, leader in the
production of quality TV dramas. The union of these two companies will lead to the creation of
an Italian production unit which will compete with the main international majors.
Medusa Film SpA is one of Italy’s leading companies in the sector of film distribution with a
market share that reached 16.6% (second in the ranking of distributors after Universal with a
share of 19.7%) in 2008. In the same year, Medusa made the quality of its film list a point of
distinction, with 16 movies in the ranking of the first 100 blockbusters, and 20 movies which
generated takings higher than EUR 1 million. The company produces and distributes Italian and
international films in Italy, managing all the phases included in the product’s life cycle, from
release in the theatres and home video to the transfer of the relevant television rights.
The film market in 2008 showed a slight decrease (-3.8%) against the same period in the
previous year.
Box Office takings (source Cinetel) amounted to EUR 594 million, corresponding to 99 million
tickets sold against 103 million sold in 2007, which was a record year.
The Italian film production industry (co-productions included) registered a 29% market share
(source Ufficio Studi Anica). This figure, though lower than that registered in the record year of
(31.7%), is still definitely above the historical average (22-24%).
The afore-mentioned, still limited, market contraction in 2008 seems to confirm a phenomenon
that had already emerged in past years, that is, the sector’s anti-cyclic nature vis-à-vis the
general economic scenario. The cost of cinema tickets is considered a bargain compared to
other leisure time options, thus confirming the importance of theatres as a preferred location
to watch films and as a basic element for the creation of value for its subsequent exploitation.
The Mediaset Group - through Medusa Cinema and Medusa Multicinema, belonging to the
Circuito Medusa Cinema – manages 10 multiplex theatres and one single screen theatre for a
total of 101 screens, ranking third in Italy with a 7.5% market share in 2008. A 2.2% reduction
was observed against the previous year, still better than the market average (-3.8%).
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