Daniela Biscarini has a lot on her plate. As the head of multimedia and consumer digital services, she is responsible for all digital services offered by Telecom Italia (TIM) . This includes all entertainment services offered by the Italian operator -- such as its video streaming service, TIMvision -- but also music, publishing, gaming and others. She also leads the operator's original content efforts in the mobile arena and is tasked with handling smart home and IoT efforts.
Her team handles video services from soup to nuts: They go from scouting and evaluating new services, to launching them and then managing them across all platforms, as multiscreen distribution is an important requirement for the operator today.
However, the go-to-market strategy and launch is usually done in conjunction with the consumer group. According to Biscarini, "For us [Telecom Italia], most of our offers are bundled with multiple services, so here we work with the consumer group to develop and communicate the offer for the launch."
At the beginning of 2016, Telecom Italia decided to "merge the commercial offers of all our market segments under the name of TIM, creating a unified brand." Consequently, the operator's video streaming service is called TIMvision. Offered bundled with TIM's broadband and mobile services, it provides a video-on-demand selection of content for subscribers via a range of devices, including Android set-tops and smart TVs running the TIM app.
Telco Transformation met up with Biscarini to discuss the TIMvision product, the development of OTT services in Italy and the operator's thoughts on the future of pay-TV.
Telco Transformation: Why did Telecom Italia get into the TV market?
Daniela Biscarini: We entered the TV market long ago. First it was Alice TV, then Cubovision and now we have TIMvision. We understood early on that video was a driver for broadband and we wanted to use our own proposition for video services.
Pay-TV penetration is comparatively low in Italy, at 26% of households. Free services such as YouTube and others have seen high adoption, but pay-TV is quite low compared with other markets like the US and the UK. So there is quite a lot of room to grow. And also, we think there is a lot of opportunity to grow OTT services as well.
TT: Can you describe the TIMvision service?
DB: It's a subscription service, with 11,000 titles available per month. It is available to all TIM fiber and ADSL subscribers for €5 ($5.31) per month along with a free set-top box (STB) on loan. There is no contract, customers can suspend and reactivate the offer without penalty at any time.
TIMvision is also available to mobile subscribers with a €29.90 ($31.73) TIM Smart subscription. The service is also available via an app on smart TVs, PCs, smartphones and tablets, and does not count towards the subscriber's data traffic.
But there is also a transactional option for non-subscribers. Users can get [both rent and buy to own] movies, TV series etc., but also documentaries and catch-up services from broadcasters and other providers via TIMvision's Videostore.
TT: Are you looking at dongles/sticks such as Chromecast as an option to the set-top box?
DB: Yes, we are. But at the moment penetration is not very high. But we do see it as a good opportunity. Also we offer the TIMvision service on mobile. Users can also use the mobile app to push the video to their TVs.
TT: You recently announced an agreement with RAI [Italy's public broadcaster] for its content. Can you describe the agreement, and how it builds on your existing relationship?
DB: RAI is one of our main partners. It is a very important provider of movies and TV shows in Italy. It has a big movie catalog and also a lot of shows on our catch-up service. And in addition to catch-up, we also offer [other] RAI content on-demand already.
In the past, we had the second window for RAI movies [i.e., the movie was first shown somewhere else, usually on the RAI broadcast channel, and then made available after a length of time for TIMvision to show on its platform] but now we have signed an agreement for the first TV window. We also have exclusivity, so for the first month the movie will only be available on TIMvision. Then after one month, RAI can show it on the broadcast channel.
TT: What is the current status of OTT services in Italy?
DB: Pay-TV penetration is quite low in Italy, so I think there is a good opportunity to grow. I think there is a big market opportunity. And OTT is growing -- our experience with TIMvision is good.
Netflix has also been in Italy since October 2015, and it is growing. Growth is not extraordinary, but right now its Italian content is limited, and in Italy it is difficult to grow without a device. Consumers like that OTT is free of commitment, it's easy to sign up and you can get the service on multiple devices -- but without an STB, the [value] proposition is seen as strange. Consumption of video on the PC is limited, so the market is young/young adults. But it's not being adopted by families.
TT: Who do you see as the key OTT players competing with you?
DB: There are not many players. There is TIMvision, Netflix Inc. (Nasdaq: NFLX). Amazon is here but has not done much marketing, so it's not having much impact.
Sky has its Now TV service, like in the UK. It's doing quite well, but there is a trade-off with their existing pay-TV service. There is a danger of cannibalizing it. So their offer is being managed with some tension. Sky's pay-TV base is stable -- it has been slightly decreasing but not growing. It has been in the market for a long time.
[Sky Italia did add 17,000 net new subscribers to reach 4.7 million in 2016; but it was the first time its subscriber base has grown in five years.]
There is also Infinity, [OTT service from Mediaset S.p.A. , the largest commercial broadcaster in Italy] but it's not sports-based and that's been the strength for Mediaset's Premium services. So the strategy is not clear at the moment.
Overall OTT is growing, but only TIM and Netflix are really investing. Netflix is also now acquiring more Italian content, which has been limited till now.
TT: What are your expectations for the future; how do you see the TV/video experience developing in the next five years?
DB: Five years is a long time. Everything is moving month-to-month, not year-to-year. For sure we will have a lot of content delivered, and customers will have a lot of choice, a lot of content.
So usability, user experience, user interface -- these will be key. If today I choose one provider, in future I will choose many providers, even if it's on one device. So we will need to create a great experience to support customers and pick up all their preferred options.
We will see more content, on more devices; and more content experiences on multiple platforms.
In two to three years OTT will exceed pay-TV. In fact, pay-TV will have to move to OTT; also be delivered via broadband. We also have digital terrestrial, it's in 96%-97% of homes in Italy. [Our] STB has both digital terrestrial and broadband connections -- it's very easy, very simple.
And we have also other players on the STB such as Mediaset, Netflix. [TIM customers with active subscriptions to certain broadband tiers can add-on Netflix and Mediaset Premium services to their TIMvision package for a fee.]
Customers can choose what to see. Our goal is to offer lots of choices.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation