His prepaid soccer card takes on Rupe's Sky Italia
ROME — Italo Prime Minister and media mogul Silvio Berlusconi must be over the moon right now — while News Corp. boss Rupert Murdoch has got to be ready to kick himself.
And the reason? Berlusconi’s broadcast group Mediaset bowed a digital terrestrial TV scheme Jan. 22, which means anyone with a prepaid card and a set-top box will be able to watch a premium soccer game for just E3 ($4).
The scheme takes the turf right out from under Murdoch’s feet. He was banking on the Serie A live soccer monopoly to power his fledgling satellite paybox Sky Italia, which charges $62 a month for its soccer and sports package.
Berlusconi is using the game to force soccer-mad Italians to make the move to digital terrestrial.
The strategy is so significant it could easily become the biggest milestone in Italian TV since Berlusconi pioneered his commercial terrestrial webs in the 1980s.
Despite government subsidies, only about 800,000 terrestrial digital decoders are installed in the country’s 22 million TV households.
But according to a study by analyst Italmedia Consulting, these low-cost soccer cards will help propel that number in this soccer-crazy nation to more than 2 million by the end of the year, 5 million by 2007 and 10 million by 2010.
“Soccer is an excellent device to launch digital terrestrial in Italy,” says Mediaset deputy chairman Piersilvio Berlusconi, the Prime Minister’s son, announcing the scheme devised by his management team.
The prepaid cards, which sell in newspaper kiosks, tobacconists and other shops, are valid for eight of the Serie A league’s top clubs, including Berlusconi’s own A.C, Milan, Juventus, Inter and Roma.
Telecom Italia, owner of smaller terrestrial web La 7, which holds rights to several less popular Serie A teams, is also launching similar cards.
Last week, Mediaset announced a deal with La 7 that will allow it to air full Serie A highlights in pay-per-view. The pact between Mediaset and La 7 excludes pubcaster RAI — Mediaset’s main rival — from the digital soccer game.
In a coup that marked first blood with Sky last year, Mediaset paid $164 million for terrestrial digital rights to the eight clubs through the summer of 2007, plus an option for 2007-2009 that also includes these teams’ digital satellite rights.
Sky Italia, which has 3 million subs, is shelling out $524 million this season for satellite rights to all 20 Serie A clubs.
While Sky Italia reps were not available for comment, they have downplayed the importance of the prepaid soccer cards, claiming that premium movies are the paybox’s main lure for new customers.
But according to several Milan analysts, Italy’s evolving TV scene is bound to impact Sky Italia hard, though it’s too early to say how much or how soon.
Execs from the paybox have been busy trying to renegotiate deals with the Serie A and threatening the league with a 40% price cut next year.
Mediaset seems to have maneuvered itself into a win-win situation.
“They just need 300,000 paying viewers per match to break even, which should not be a tough target,” according to Oriana Cardani, an analyst for Milan’s Rasbank.
Meanwhile, due to competing coverage, Italian soccer fields are preparing for as many as 40 TV cameras per match, which averages out to almost two cameras per player.
And coaches are complaining they won’t be able to see the game from the bench.