DIGITAL TV: the new frontier Update on DTT Development

Milan, 25thOctober 2005 DTT Development in Italy | Coverage

Number of DTT Population multiplexes Coverage

ƒ 2 mux 80% - ≃ 65%

ƒ 2 mux >70%

ƒ 1 + (1) mux ≃ 70% - (≃ 65%)

ƒ 1 mux ≃ 68%

Sardegna and Valled’Aosta should be the first Region to switch off the Analog trasmission: already by the 31st January 2006

(1) MUXs already Authorized but not yet Active

Digital Terrestrial TV

| 2 | | 2 | DTT Development in Italy | SET-TOP-BOX Penetration

ƒ Estimates of over 3ml Decoders at the end of September 2005 ƒ Around 2ml MHP Decoders sold with State subsidies ƒ 192.000 subsidies left to be reserved to Valle d’Aosta and Sardegna (switch off January 2006)

Number of decoders sold through State subsidies STBs Price History

2.000.000 € 390 Subsidy Price € 150 Retail Price (gross of Sudsidy) € 250

€ 199 € 179 € 149 € 150 € 119 € 99 € 150 € 150 € 70

€ 239 € 99 € 49 € 29 € 149 € 49 € 99

March 2004 September 2005 Jan 2004 Mar. 04 May 04 Sept 04 Dec 04 Apr 05 Today

Source: Ministero Comunicazioni Fonte: Stima GfK Marketing Services Italia Digital Terrestrial TV

| 3 | | 3| |3 | DTT Development in Italy | SET-TOP-BOX Penetration

Profile of DTT STBs sold

40% MHP STBs sold without subsidy 56% MHP STBs sold with subsidy

4% Zapper

Source: Estimate by GfK Marketing Services Italia, May 2005

Digital Terrestrial TV

3 | 4 | | 4 | DTT Development in Italy | Channel Offer

MainMain analogueanalogue channelschannels inin simulcastsimulcast SportSport andand sportsport newsnews

i i i i i SPORT

i i i SOLOCALCIO

News:News: financial,financial, international,…international,… KidsKids ShoppingShopping MusicMusic channelschannels

i i i

CinemaCinema newsnews PublicPublic serviceservice channelschannels ReligionReligion PayPay perper ViewView servicesservices

i i i i i

i Interactive Channels Note: “Rete A” multiplex is not included (broadcasting “All Music”, “The Club”, “Camera”, “Senato”) because its current coverage is below 50% Sources: DGTVi; Sat-Net; Booz Allen Hamilton analysis Digital Terrestrial TV

| 5 | | 5 | DTT Opportunity

Digital Terrestrial TV

| 6 | | 6| 6| | DTT OPPORTUNITY | Model

FREE-TO-AIR TELEVISION NETWORK OPERATOR PAY-PER-VIEW

Commercial TV Renting of Spectrum on ƒ Premium Content ƒ 3 generalistic channels proprietary Digital Terrestrial Access through: funded by advertising Transmitting Network to: ƒ Pay-per-View Multichannel ƒ non-captive TV content ƒ Pay-per-Time ƒ Theme Channel funded by provider (DVB-T) ƒ Pay-per- Category targeted advertising or ƒ mobile operators (DVB-H) telesales Interactivity ƒ Interactive and Enhanced advertising ƒ Interactive services

Digital Terrestrial TV

| 7 | | 7| 7| | - Free-To-Air TV -

Digital Terrestrial TV

| 8 | | 8| 8| | FTA TV | Enhanced TV Offer

Program Info “live” Entertainment Original language Games

Additional Tv Streams TV Guide (EPG)

Services/ Public Utility Commerce Interactive ADV Teletext

Digital Terrestrial TV

| 9 | | 9 | FTA TV | Multichannel, first FTA Kids Channel

launched , a new Free Kids Channel together with Broadcasting: “on air” since December 2004

UK - Audience Share (Multichannel +pay) (Daily Breakdown in min. per Day)

Entertainment 00:36 Others Theme 8% Kids 00:16 News 1% Entertainment Sport 00:10 4% 38% Documentary Cinema 00:09 6% Music Music 00:06 7% Documentary 00:05

News 00:03 Cinema 9% Theme Channels 00:01

Others 00:09 Sport 11% Kids 00:00 00:07 00:14 00:21 00:28 00:36 00:43 00:50 17%

Source: BARB, Annual Report BSkyB, Analisi BAH Digital Terrestrial TV

| 10 | | 10 | FTA TV | Multichannel, first FTA Kids Channel

Individuals - 24 Hours Kids (4 – 15) – 24 Hours

13.8%

2.1% 10.0%

1.7%

May 2005 September 2005 May 2005 September 2005

Source: Auditel Digital Terrestrial TV

| 11 | | 11 | FTA TV | Multichannel, Home Shopping Channel

MediaShopping

C5, I1, R4 ƒ Production and post Production Facilities Corner Windows ƒ Retailing and Marketing ƒ Customer Service ƒ Delivery and Logistics Direct 24h DTT ƒ 120 employed people Marketing Channel ƒ Around 1.000.000 clients ƒ 29% Revenues from Publitalia - Telesales Internet Catalogue - “60 spots ƒ From Jan. to Sept. 2005 (*): - 33.000 average sales per month - 80 euro, average revenue per Sale

(*) Canal D, analog FTA Terrestrial Channel with 65% coverage Digital Terrestrial TV

| 12 | | 12 | - Network Operator -

Digital Terrestrial TV

| 13 | | 13| 13 | | NETWORK OPERATOR | Digital Terrestrial Broadcasting

Digital Terrestrial Network

DVB-T DVB-H

Digital Terrestrial Set-Top-Box Mobile Handset, PDA, Portable TV

ƒ Open Platform ƒ Open Platform ƒ Limited Broadcasting Capacity ƒ Tv content can be broadcast in original format ƒ Ideal for FTA Broadcasting and DVD quality ƒ Channel multiplication ƒ Low power consumption ƒ 2 MUX. already hosting 3rd party channels ƒ Needs only a small antenna

ƒ 4 – 6 Mbps per channel ƒ 200 – 500 kbps per channel ƒ 4 – 6 channels per Multiplex ƒ 20 – 25 channels per Multiplex

Digital Terrestrial TV

| 14 | | 14 | NETWORK OPERATOR | Mobile TV Possible Business Scheme

Content Providers

Content Aggregator Commercial Agreement Mobile Operators Broadcaster

Digital terrestrial Mobile Network Network

Linear Broadcast Unicast & Free/PPV Tv Return on-demand Billing Content Path Content

End Users

Digital Terrestrial TV

| 15 | | 15 | Pay-Per-View – “MEDIASET PREMIUM”

Digital Terrestrial TV

| 16 | | 16| 16 | | PAY PER VIEW | First Pre-paid card Offer on TV

BENEFITS FOR VIEWERS BENEFITS FOR MEDIASET ƒ No dish required ƒ Focused Investments ƒ No Subscription ƒ Defensive Move ƒ “Pay for what you watch” ƒ Driver for DTT Penetration ƒ Additional Revenues

Digital Terrestrial TV

| 17 | | 17| 17 | | PAY PER VIEW | Clear and simple technology

A B

Insert the Select the card in the match STB

D C

Enjoy the Buy the match! match

Digital Terrestrial TV

| 18 | | 18 | PAY PER VIEW | Clear and simple technology

ƒ DTT broadcasting stable and reliable ƒ Secure Encryption Software and Technology () ƒ New Releases of the Encryption Software uploaded OTA (Over-the-Air) ƒ System enables “Rechargeability”

Credit recharged on the Credit used watching Mediaset Card Premium Content 4 1

Credit sent OTA Credit Purchased (on- (Over the Air) to the STB 3 2 line / off line)

Digital Terrestrial TV

| 19 | | 19 | PAY-PER-VIEW | New “Mediaset Premium” Card

Cards ƒ 2-size “Mediaset Premium” card: - 30 Euro (o/w 5 Euro plastic card) - 10 Euro (o/w 5 Euro plastic card), bundled with Set-Top-Box offer ƒ “Mediaset Premium Club”, for Commercial Premises (Pubs & Clubs) ƒ “Mediaset Premium” is available in 2.500 consumer electronic stores ƒ “Mediaset Premium” Cards will expire 30th June 2007

Credit Recharge ƒ 6 Credit size from 10 Euro to 100 Euro, ƒ Recharge fee from 10% to 0%, respectively ƒ Credits can be recharged through: - Credit Card calling Mediaset Premium Call Centre or connecting to Mediaset Premium Website - “Scratch Cards”, available in more than 80.000 point of sales: - Consumer electronics stores -Kiosk - In Lottomatica and Sisal sale points; recharge codes will be printed directly from terminals ƒ Credits have to be activated via a dedicated Call Centre or Website.

Digital Terrestrial TV

| 20 | | 20| 20 | | PAY PER VIEW | Live “” Offer

“SERIE A ’05/’06” - Mediaset Premium Offer

ƒ 10 Teams ƒ 190 matches in a season ƒ 100 “Tier 1” matches (4 top Clubs) Juventus Inter Roma Lazio ƒ 90 “Tier 2” matches ƒ 38 “DIRETTA PREMIUM” ƒ “SERIE A” season started 28th August 2005 Messina Livorno Siena Sampdoria Treviso Pricing ƒ 5 Euro per match ƒ 79 Euro, “Team Seasonal Ticket” + “Diretta Premium” ƒ 99 Euro, All Matches + “Diretta Premium”

ƒ 760 Euro “Mediaset Premium Club”, All Matches + “Diretta Premium”

Digital Terrestrial TV

| 21 | | 21 | PAY PER VIEW | Movie Offer

Movies - Mediaset Premium Offer

ƒ 4 Movies per day (Monday – Friday) ƒ 100 – 150 Titles in ’05/’06 season ƒ Movies are available with: ƒ Original Language ƒ Subtitles ƒ 5.1 Dolby Digital Audio ƒ PPV From 2 Euro (library) to 4 Euro (1st run on TV) First window ƒ Movie Offer started 28th August 2005 available on TV

Box Office 49126 24 months

DVD Sale DVD Rental PAY per VIEW PAY TV FTA TV

Digital Terrestrial TV

| 22 | | 22 | PAY PER VIEW | “Mediaset Premium” …. Coming up!

ƒ Reality Shows ƒ Concerts ƒ Fiction ƒ Comic shows ƒ Theatre plays ƒ Musical ƒ from September 2006: all UEFA Champions League matches ƒ Others … coming up!

Digital Terrestrial TV

| 23 | | 23 | MEDIASET | DTT Project Development

ƒ Mobile TV Business (DVB-H) PHASE 3 ƒ Pre-paid card and MHP Integration (2006) ƒ Introduction of other pre-paid funcions (Es. Pay per time)

o

i ƒ Launch of new PPV Content (Reality, Movies, etc.) t PHASE 2 a Introduction of “Seasonal Ticket” or “Package Ticket” (2H2005) ƒ

t

e ƒ Launch of Rechargeable cards

n

e

P

T PHASE 1 ƒ Launch of PPV Offer on a Key content (Soccer) T (1H2005)

D ƒ Launch of a new theme channel (Boing) ƒ Launch of DTT Platform ƒ Creation of a Digital Terrestrial Infostructure

Digital Terrestrial TV

| 24 | | 24| 24 | | DIGITAL TV: the new frontier Update on DTT Development

Milan, 25thOctober 2005