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» Report 2008
Part Four - INTEGRATED AND CONCENTRATED
THE FORCE OF A CLASS
Chapter 6 - Groups and companies: the principle organisations
Operational companies and leaders
The 40 groups individuated in the reference sample have control over more than 100 companies and, as stated, a number of these enjoy an income which is greater than that of other holdings. The outline of the single, operational companies of major influence taken from the reference sample – stopping at the threshold of 4.35 million euro in turnover – ends up including, primarily, activity which is included in the holding “enclosure” as well as that of the so-called dominant groups: a good 36 out of 45 and, among these – with the exception of Bim Distribuzione – all of the first 35, including the distribution company Universal Picture International which, in the world of the major companies, has a singular connotation being owned in joint venture at 50% by Viacom Inc. and the General Electric Company.



Source: Elaborated from CERVED data, Infocamere-Business register and financial statements of the Italian stock exchange for the companies of the quoted groups Rai, Mediaset (Medusa) and Mondo TV * Thereported data refer to solely to cinema activity -
**The financial statements of Sony Pictures Home and Sony Pictures Releasing foresee the closure on 31st March of each year. All of those of 20th Century Fox, however, close on 31st May -
*** The personnel of Blockbuster consist of 1,489 full time and part time dependents,equal to an equivalent of 1,037 full time individuals..

This yet again puts forward the statement made at the beginning concerning the effective turnover generated by the cinema industry in Italy. Just as it was observed that the value of production of only the first ten companies (over 2,035 million) is greater than the amount of income that the typical consumer studies, in terms of performing arts and entertainment, normally credit overall to the cinema in terms of market demand, as such it is revealed that also at the disaggregate level, that is, in terms of companies which are clearly operational, the amount of revenue of the first 18 trade names is sufficient to surpass the upper limit of 2 thousand, million euro (to be precise 2,003.8) of total income.
Also at the level of single companies such a classification in terms of amount of proceeds (intended as values of production and not as pure turnover) primarily functions to facilitate the exposition and the understanding of the data and the composition of the sector and not to fix an exhaustive grading or ranking of companies and their activities. The objective, in substance, is to schematically represent a verification of the forces in operation which, albeit in an elementary form, permit the delineation and better understanding of the business volume and the “weight” of the diverse businesses within the single sectors.
Starting from the most immediate fact which regards the size of Rai Cinema, more than double in comparison to that of the companies – with the exception of Disney – which follow it, including Medusa Film, of which the table reveals the data relative to 2007, prior, that is, to the incorporation of the ex company leader into the cinema activity of the group Mediaset in RTI and the consequent company reorganization which has modified the structure (the total values of production, however, remain unchanged).
  • Among the objectives of Rai Cinema there are not, in actual fact, only the activities of direct production and the acquisition of Italian and European cinema productions – with the principle commitment being to respect the quota of resources predetermined within both European regulations and the services contract stipulated between Rai and the minister of Communications – but also the acquisition and commercialization of television series, films and animated cartoons “depending on the general editorial exigencies of the group and of its associated companies, without limits”, as states the company mission, “of transmission and distributive formalities or economic support (cinema halls, home video, pay per view, pay television, and so on)”. In truth, the financial statements do not permit the stabilization of clear sub-divisions between performances linked to television roles (therefore minority) rather than those strictly linked to cinema.
  • The second fact regards the relatively limited presence of film studios in comparison to distribution companies and enterprise companies. On the shoulders of the two native ‘mini-major- companies’, Rai Cinema and Medusa, there are, moreover, a 20th Century Fox Home Italia which produces (like Disney) a small part of original films and a Film Master principally active in the short films destined for the publicity market. The first, most important ‘indies’ or independent film producers of the production sector are, in substance, the operational companies Cattleya, Italian International Film, Lucky Red and Mikado.
  • What is somewhat remarkable, moreover, is the circumstance that the companies of the two national group leaders are, among all those present on the table, the youngest. If the formal constitution of the original Medusa by Franco Poccioni is not taken into consideration, not having direct links to those resulting from Mediaset which are still targeted as Medusa, it can be seen, in fact, that the 35 companies at the top of the table were all founded over ten years ago and that, therefore, their principle market impact also derives from a longer period of time during which they have been able to grow and develop. Furthermore, the percentage relative to the classes of seniority also confirm the preceding consideration on the prevalence – in terms of turnover – of distribution companies and enterprises over those of the sector of major volatility which is production.



Elaborated on CERVED data 1st January 2007.

  • In convergence with this annotation is the position, at number 32, of BIM Distribuzione, a company formed in Rome in 1983 by Valerio De Paolis and which has, since its origin, aimed to cover an area in the Italian market which hasn’t already been taken by major United States companies, despite drawing on international cinema (including that of the Far East) and co-producing and distributing films by foreign directors and produced by independent companies. BIM Distribuzione is the result of a gradual but constant development, and their substantial, consolidated position appears emblematic of the persistence with which national independent producers – ignoring  the eventual successes of initial box-office takings which are preparatory to a favourable initial phase –  must maintain in order to reach the managerial, organizational and financial standards which are the basis of work continuity that is essential for achieving and conserving an appreciable market benchmarking (under which there is neither visibility nor sufficiently profitable conditions).
  • The two public entities which appear immediately after BIM Distribuzione: Rai Trade (100% Rai, founded in 1996) and Istituto Luce (100% owned by Cinecitta Holding, and actually formed as far back as 1924) can also make justified claims to seniority. Rai Trade is essentially a services company which cooperates, to a significant degree, with Rai Cinema and 01 Distribution and, as its name suggests, operates primarily in the distribution and commercialization of productions abroad and in terms of licensing and the transfer of rights. Istituto Luce is responsible for the photo-cinema archives of Cinecitta, however, in its work of evaluating and restructuring historical audiovisual property it also participated, in 2007, in the production and distribution of four motion pictures (and only one motion picture in 2008).
  • Fourth among the holdings, Warner Bros. shows itself to be second among the major companies, in the strict sense of the word, of a foreign matrix, this is also a result of the scale of its principle, operational company which is principally involved in cinema distribution (however, it also has certain Italian productions) and generates 57.76% of total revenue as WB, whilst the sister company generates the remaining 42.24%. For a long period of time the two companies have registered a gradual but constant growth of activity,  so much so that from 2001 to 2007 they managed to double the group’s national turnover and have sites in Rome under the ownership of Paolo Ferrari.
  • The position of Blockbuster Video Italy Inc. reconfirms the importance which the company controlled by the group leader Blockbuster Entertainment Inc. (Viacom-Paramount) has assumed in Italy. With 178 direct sales outlets and 64 franchises, as well as 1,935,169 member’s card holders, Blockbuster is the company of the sector which employs the most people with 1,489 full and part time staff (all dependents of Blockbuster Italia, the trade name with which Blockbuster Video Italy operates commercially on the market).
  • The operative continuity in real time, which is contextual to the consolidation of  managerial autonomy and of a market position which is, at least, competitive, is a characteristic that is also adapted to other independent production companies which emerge from the sample of companies. R&C Produzione was created in 1988 by Tilde Corsi, just as Ager 3 by Mario Lorenzo Predome, and Biancafilm in 1993 by Donatella Botti.
  • Albatross Entertainment of Alessandro Jacchia primarily addresses television channels and is, among the few companies which maintain equivalent relations between the two national broadcasters, Rai and RTI-Mediaset. 11 Marzo is more active, however, on the cinema market, where the founders Matteo and Roberto Levi take into account a second company, Tangram Film, for distribution; a division in which operates, primarily, Emme Cinematografica.

 

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