Strategies for Digital Television: DTT in Italy
JMM - The International Journal on Media Management
Italian broadcasting has long been terrestrial. Its main shortcomings (spectrum chaos, nonenforcement of the law and market concentration) were considered not conducive to a rapid and reliable diffusion of digital terrestrial television (DTT). In 2005, the private free to air duopolist Mediaset entered the pay TV market with an offer on DTT and, within a few years, has affirmed as a fast-growing operator, threatening the established satellite incumbent (Sky). This evidence apparently challenges
... the received wisdom of the literature and the business practice. With the aim of explaining these peculiar market dynamics, we study the operators' strategies, controlling for the institutional side and the policy. A few main points stand out. First, the enduring spectrum chaos has not significantly hampered Mediaset, nor was spectrum a binding constraint, thanks to biased regulation. Second, the entrant crafted a coherent and gradual "premium content" strategy, finetuning its evolution in accordance with the platform diffusion. Third, the public policy for digital TV served as a supporting complement to the private strategy. In particular, being biased, it favoured the diffusion of DTT over rival platforms, and benefited its main pay-TV offer. Overall, our analysis uncovers a complex and unique national case, rooted in an effective, albeit contentious, publicprivate interplay. Consequently, the Italian case does not convincingly challenge the received wisdom on DTT. JEL Classification: L12, L51, L82.