Lorenzo Pellicioli

May 22, 2009 World Screen

April 2009

CEO
De Agostini Group

 

The De Agostini Group is active in 66 countries and focuses on four businesses: publishing, media, games and financial services. Last November, Lorenzo Pellicioli announced the creation of the new company Zodiak Entertainment, consisting of Zodiak Television, the Marathon Group and Magnolia TV, making De Agostini a major player in the production and distribution of content.
 
WS: De Agostini began as a very strong publishing company. What was the motivation to start investing in content and production companies?
PELLICIOLI: For five years now, the De Agostini Group has been a diversified financial conglomerate of which publishing has been only one of its sectors. When we began the process of diversifying in 2001 we identified two areas: TV content and TV broadcast stations. The first opportunity presented itself in 2003 with the acquisition of a majority stake in the Spanish station Antena 3 TV through a joint venture with our long-term partner Planeta.
Between 2007 and 2008, the group had the opportunity to acquire three leading production companies: Magnolia in Italy, the Marathon Group in France, and Zodiak Television, which operates in Sweden, Northern Europe and Asia. All of these assets are grouped within Zodiak Entertainment, a company created by the De Agostini Group last November and headquartered in Paris. Our goal in the area of media content has been to create a global brand, a leader in the development of entertainment content for television and new media, and to generate value for the group.
 
WS: What opportunities did De Agostini see in the television and new-media businesses?
PELLICIOLI: Zodiak Entertainment represents the natural evolution of the group’s creative and international vocation. We believe it’s an area with great potential for growth, thanks in part to new-media platforms. We are also convinced that it’s possible to obtain advantages and synergies from the collaboration between Zodiak Entertainment and the various businesses within the De Agostini Group, in particular publishing (with De Agostini Editore) and gaming (with Lottomatica). There are multiple possibilities for a broad and far-reaching “cross-fertilization.”
 
WS: What prompted you to look beyond Italy for expansion?
PELLICIOLI: Investing beyond the Italian borders reflects a longtime intent of the De Agostini Group. In its 100-year history, through various publishing products, it has exported its brand to every corner of the earth. Today, the publishing group works in 30 countries and the gaming [division] Gruppo Lottomatica is in more than 50. DeA Capital, our investment company, has assets in France and Turkey. And we should not forget that the insurance company Assicurazioni Generali, of which we are among the major shareholders, is another international company. And Zodiak Entertainment itself is based in Paris. While we are proud to be based in Italy, we think “global.” Today, a great deal of De Agostini’s value is not dependent upon Italy. And in the media content business, which has worldwide value, being international is a necessity. The acquisitions of Magnolia, Marathon and Zodiak Television confirm our commitment to developing our businesses in the geographic areas where we aren’t present, or strengthening our presence in the areas where we are doing business.
 
WS: What strengths did you see in Magnolia, Marathon and Zodiak?
PELLICIOLI: Through these companies we have a number of strengths: a strong international bent with a direct presence in more than 20 countries, a huge variety of programs, a group of successful creatives and a widespread distribution business. These are three very successful companies, as witnessed by the repeated recognition they have received. They have created a range of various TV programs, from animation to documentaries, from drama to video clips, in addition to having the ability to adapt formats of great success to the needs of various broadcasters.
The consolidation and development of close relationships with local broadcasters, an innate ability of our companies, gives us a considerable advantage in a highly competitive market. Today we are among very few on a worldwide scale who are able to work in all the key television genres: entertainment, animation and fiction.

WS: What is Zodiak Entertainment’s mission?
PELLICIOLI: Zodiak Entertainment’s main goal is to combine its organic growth with other acquisitions and strengthen our position in the U.K., U.S. and emerging markets. With this strategy we aim to become, in the next three years, one of the principal players in the international content market. With its headquarters in Paris, Zodiak Entertainment’s main function will be the distribution and sale of formats, in addition to circulating ideas among the companies in its group. And the production companies will be responsible for maintaining relationships with broadcasters, and for following shows from their production right through to their air dates.

 
WS: Your companies cover a wide range of programming genres. Do you plan on focusing in particular on any specific genres? For example, formats or animation?
PELLICIOLI: Zodiak Entertainment consists of more than 20 successful international companies and produces more than 5,200 hours of programming each year for television and new media. They include reality shows, drama and comedies, documentaries, factual, animation, quiz shows and much more. Producing a variety of genres is a strong point of the group and we will continue to pursue this strategy in the future as well. One of our priorities, however, is also light entertainment, as this is a genre that sells and performs well internationally.
 
WS: Do you plan on making more acquisitions of production companies?
PELLICIOLI: We are always ready to make new acquisitions, but we will be very careful about their potential for creating value and therefore also their price. Recently we bought Mast Media in the U.K. It has some very interesting, innovative and popular formats, such as the game show Oblivious, which was distributed in 20 countries and in 2002 was the winner of the prestigious Silver Rose award at the Rose d’Or Festival. Our current priority, however, is to best integrate the companies into Zodiak Entertainment.
 
WS: Do you plan on investing in other TV networks?
PELLICIOLI: In 2003 we had the opportunity to buy a majority stake in Antena 3 and we did so. But our investment strategy right now is directed more toward content than broadcast outlets. We believe, in fact, that in a media landscape that is characterized by so many platforms and devices on which to receive content, it’s more forward thinking and lucrative to invest in content, in ideas and in programs, in the real brands of the future.
 
WS: In what areas do you expect to see growth, and what is your strategy for achieving growth?
PELLICIOLI: Growth, in every sector, is achieved through research and innovation. We therefore wish to set up, as soon as possible, a network of creative talent that is able to develop ideas that can be exported to the markets where we already are present as well as in those in which we would like to operate. For that reason, besides focusing on creativity, we are also intent on distribution, as we are present in many countries, mostly European. We have also developed excellent relationships with the major broadcasters in the world. In terms of growth and opportunities, we’ll always keep an eye on new-media platforms: web TV, Internet and mobile are some of the areas we want to get into. We are convinced that the young generations are radically changing the way content is consumed, compared to the “old” generations that are used to general-entertainment television.
 
WS: What is your timetable for making Zodiak a public company?
PELLICIOLI: If, within the next three years, we are able to reach the goals we have set for ourselves and become one of the principal international media players in the content market, with revenues of 800 million euros to 1 billion euros and EBITDA of 130 million euros to 150 million euros, and if the financial markets will allow it, we will be able to make Zodiak Entertainment a public company.
 
WS: In this difficult economy, what are the major challenges for a media company, and what, on the other hand, are the major opportunities?
PELLICIOLI: The work we do as media companies is paid for by consumers: they are the ones who buy product from companies, who in turn advertise and invest in our clients—media outlets. The current economic crisis, which in my opinion is much more serious than any since 1929, will force consumers to change their habits, and consequently will change companies and the advertising world. Perhaps the companies that will be positioned to find the best opportunities are those who will be able to interpret the nature of the change in lifestyles and the new needs of viewers of all ages. Getting information, communicating and using mass media are needs that no human being, no matter how deep the crisis, will be willing to give up. 
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