This national roundtable got underway with the observation that the digital revolution which began in the late 1990s has radically changed the world of television. Today, audiovisual content can be found on the internet, smartphones and tablet computers: transmission capacity has been boosted, general-interest TV is losing audience shares and the level of user customization is on the rise. Industry models are also changing – and fast. In the near future, the models for making television, delivering it to audiences, and making it attractive to advertisers will be very different.
Yet it was suggested that this key platform of the media ecosystem might not be as endangered as it would seem: a recent post on The Economist’s Babbage blog, supported by figures from Nielsen, indicates that all in all, despite the major revolution brought about by the advent of the internet, television still plays a strategic role and holds a substantial chunk of the market. What is certain, however, is that the industry cannot afford to be too complacent: there is change afoot, it is radical, and it impacts on how television is made, on competition rules, and on the size of the market. The traditional model is breaking up, with revenues no longer returning to source, such that television networks will soon run into financing difficulties and content production will come under increasing pressure.
It was noted that the enormous growth of the digital market has not brought with it a corollary overhaul of the applicable legislation. In particular, the Italian regulatory framework was deemed inadequate and in part obsolete: indeed, it does not contemplate the phenomena that have changed the market, namely: convergence and the large growth in new media. Nor is there yet an antitrust regime in place capable of responding to the criteria of homogeneous markets. Whilst it was conceded that the Gasparri Law does provide for an integrated broadcast media system, there are still many gaps in its coverage. Many of the participants accordingly reiterated the urgent need for appropriate reforms.
The audiovisual industry in Italy accounts for 1% of GDP: 80% of content is still produced by traditional broadcasters who – in the absence of adequate legislation – bemoan the unchecked exploitation of their content online. A major competitive issue also arises as between Europe and Italy: Italian firms, which are subjected to heavy regulation, find themselves having to compete in international markets with companies from other countries that have not had to conform to similar legal requirements. The participants pointed to a lack of legislation on convergence that pays due regard to the matter of spectrum review and prevents free access to the network by “over-the-top” or OTT operators, which – in the view of some of those present – results in a very uneven playing field.
It was acknowledged that whilst there is much talk currently regarding television frequencies, with the Italian government recently confirming the suspension of the so-called “beauty contest” procedure for the allocation of digital frequencies, it is also true that, in the new scenario that has emerged, a consideration of telecommunications frequencies is likewise unavoidable. This is a step which – it was conceded – undoubtedly falls within the realm of policy, but which many nevertheless expressed a desire to see taken given the need to redress both regulatory and market imbalances.
The participants also discussed at length the issue of copyright protection online, a problem stemming from the original conception of the internet as a free platform, and one which, in any event, needs to be resolved at a global level rather than through the laws of any individual country. It was stressed that a realistic and pragmatic approach is called for which distinguishes private use – such as music downloads by teenagers – from outright commercial usage.
Finally, a lengthy discussion ensued regarding the role of public service broadcasting and Italy’s state-owned broadcaster RAI. It was noted that Europe confers 25 billion euro a year on its public television networks, reflecting the importance the EU attaches to their role. According to some participants, RAI, which remains one of Europe’s largest public broadcasters – suffers from governance and content standard issues. As regards the issue of the compulsory license fee, opinions were divided, with some calling for its abolition, whilst others sang the virtues of Italy’s hybrid system, based both on license-fee and advertising revenues. There were also those who suggested that the “mission” of Italian public television should be redefined according to a model under which the license fee goes towards funding quality stations – where the audience is not so strategic – and advertising is used to support stations that are more commercially-oriented. It was additionally observed that under the existing provisions of the Gasparri Law, it would be possible to put several RAI stations on the market.
On the government front, it was reiterated that public broadcasting must continue to be supported, as is in any case required by European law, and that the switchover to digital TV is due to be completed by June 30. By way of conclusion, it was noted that foremost among the current government’s objectives are efforts to step up the liberalization of phone frequencies, the pursuit of the Digital Agenda, and the further development of broadband.