Rai Trade

Turnover in 2010 amounted to 73 million euros, with a net result of 2.7 million euros, higher than in 2009.

This result, which is of particular significance considering the general and severe market recession, was achieved thanks to various initiatives in a number of different business areas. Merger by incorporation of Rai Trade SpA into Rai SpA On 23 February 2011, an agreement was entered into for the merger of Rai Trade into Rai, effective for economic and tax purposes from 1 January 2011 and, in compliance with art. 2504 bis, paragraph 2 of the Italian Civil Code, from 1 March 2011.

From said date, all activities will be carried out directly by Parent Company organisations.

Sport

Revenues from the sales of Sport amounted to about 17 million euros in 2010, with a reconfiguration compared to 2009, particularly due to the reduced availability of certain international broadcasting rights (particularly the Serie A and B Football Championships for 2010/2011). The final results were characterised by the following main activities:

• the joint distribution deal with Sportfive of the international broadcasting rights for the Italian Football Championship for the 2009/2010 season and with Media Partner & Silva for the 2010/2011 season;

• the cycling events included in the RCS packet (Giro d'Italia, Milano-Sanremo, Giro di Lombardia and Tirreno-Adriatico), the home matches played by the Italian national football team (qualifying rounds and friendly matches);
• the acquisition of the media rights to market the friendly matches played by the Italian national football team;
• the international sale of the themebased channels of Inter, Juventus and Roma, which improved on the previous year's excellent results.

Musical productions and publications

During 2010, the Musical Productions and Publications Division consolidated its performance level, with revenues of about 20 million euros.

In detail: soundtracks, radio and TV productions, record production, contemporary and cultured music and prose, media wave (the customisable communication system for the management and diffusion of audio and video programming, pictures and texts in public areas).

Marketing of TV, Home Video and Theme-based channels

As regards foreign sales, the international marketing of Rai products was affected by the continuing economic crisis, which led to a progressive reconfiguration of the initial targets that took into account the first signs of recovery on the market, which were resized during the year.

This sector recorded a result of over 3.5 million euros, despite the economic recession and the lack of serial products of international level.

The results achieved by the Home Video segment were particularly significant, with revenues in excess of 9.5 million euros, taking into consideration the particular crisis affecting the area, with a considerable decline in demand through newsagents and the so-alled traditional channel.

Home Video production activities enabled the distribution of 16 series through newsagents, for a total of 207 products.

There was also the redistribution of existing series: a set of 30 DVDs entitled 'Viaggio nella Scienza'; a set of 17 SuperGulp DVDs. Lastly, within the normal trade channel (specialised shops, supermarkets and hypermarkets, media stores and bookshops) the direct distribution project was activated. Thanks to the finalising of commercial agreements with Warner Entertainment and Terminal Video, this project generated a significant amount of turnover.

The turnover of the Theme-based channels exceeded 6 million euros, including revenues from foreign sales. The reconfiguration of turnover in comparison to 2009 is largely attributable to the perfection of the agreement with the football club relating to the Inter Channel; from 1 July 2010, F.C. Internazionale decided to internalise the activity, assigning Rai Trade the mandate for the international distribution of the channel. In general, the average number of subscribers in for 2010, with reference to Juventus and Roma Channel only, suffered a 9% and 4% decline respectively with respect to the averages for 2009.

The rate of abandon of the Sky platform by subscribers to football channels in favour of DTT continues to be high; almost half the subscribers who abandon Juventus and Roma Channel cancel the entire subscription to Sky. During the year, in view of the expiry of the agreement, a special selective procedure was used to identify a new supplier of technical-editing services for the production of the Juventus Channel.

International distribution of the channel benefited from the application of the so-called Melandri Decree, on the basis of which, from this year, the official theme-based channels of the football clubs can broadcast all the repeats of matches played in national competitions (as already happens with UEFA matches), as well as gaining access to the Archive Rights 8 days after the event.

Despite the difficulties of the audiovisual market in Italy, the Teche and Footage area recorded an improvement in performances compared to 2009 (with revenues of 2.8 million euro). The sale of archive material and news yielded excellent results, proving the commercial strength of the Teca Rai product, fully enhanced through the application of a new commercial policy which implicated the review of the pricelist and the adoption of technical instruments (cautionary deposit) which have enabled the reduction of lost income.

Initiatives within the New Media sphere

In comparison with the previous year, 2010 was a year of transition (with revenues of about 1.2 million euros), with the consolidation of certain Digital Extension activities and a mix of products and services disbursed, highlighting the maintenance of the values expressed during other editions, together with initiatives with results that didn't always live up to expectations.

Lastly, it is necessary to draw attention to the considerable commitment of Rai Trade's Digital Extensions to the innovation of the Brand and the Rai product with the incredible success of the Smartphone Application of RadioRai, with over 650,000 registered and over 15,000 users who utilise it every day, rewarded by Apple as the world's best public radio application.

Cartoons

The edition of Cartoons on the Bay was held for the first second time in Rapallo and Portofino from 15 to 18 April 2010, in compliance with a three-year agreement with the local consortium 'Terre di Portofino'. The festival, following the introduction of the new editorial programme launched in the previous edition, recorded further growth in terms of attendance (with almost a thousand delegates) and programmes in the competition (almost 500) and was extremely successful with both audiences and the press. The total number of journalistic contributions, released through the press, web and TV, in relation to the web was roughly a thousand.

The festival also confirmed the sponsors of the previous edition, proving the appreciation of the new editorial formula by operators in the sector; the number of visitors also increased thanks to the construction of a Cartoon Village, which involved schools and families, with a daily average of about a thousand children.

After bringing Yoshiyiuki Tomino, the creator of Gundam, and Talus Taylor, the creator of Barbapapa to Italy for the first time, Cartoons on the Bay brought Don Bluth, considered to be one of the three greatest cartoon directors of all time, after Walt Disney and Hayao Miyazaki, to Rapallo in 2010.

Immense success in terms of image was also achieved by Cartoons on the Bike, the new cycling race in which sports champions and celebrities from the worlds of journalism and business compete in teams, inspired by the most famous cartoon characters.

Promotional events

Once again in 2010 Rai Trade Screenings and international markets (MIPTV, MIPCOM and Sportel for the markets of broadcasting rights for television and the Berlin, Cannes, Venice and Rome Film Festivals in the cinema business) represented the most important means of communication and promotion for Rai Trade and Rai products.

In 2010, Rai Trade Screenings were held for the first time – and with immense success – in Florence, also involving the main customers and Italian publishing partners, to whom the new projects were presented through the screening of promotional videos and new publishing proposals.

The international delegates were able in the meantime to see the Rai product portfolio through the dedicated server network set up especially in the Sala d'Arme di Palazzo Vecchio.

Consumer product

The enhancement of the Rai properties developed through merchandise licensing improved the results of 2009, both in terms of turnover (up to 4.1 million euros) and margin, despite the general context of the market continuing to show a certain amount of complexity.