Berlusconi breaks Murdoch monopoly on pay TV
ROME In the 1980s Silvio Berlusconi broke pubcaster RAI’s broadcasting monopoly by launching commercial TV in Italy. Now his son Piersilvio is breaking Rupert Murdoch’s monopoly on Italo pay TV.
Berlusconi Jr., who recently unveiled Mediaset’s feeveechannels beamed on digital terrestrial television, made it clear that free TV remains its core business, with the web’s three free-to-air channels commanding 40% of audience share.
Still, after an active year that saw Mediaset buy a 33% stake in Endemol last spring, it’s clear the conglom is “entering a new phase,” as Piersilvio Berlusconi put it. It looks likely to have far-reaching consequences for the 22 million Italian TV households, if nothing else as a driver for the country’s planned 2012 switchover to digital.
Massively plugged by spots featuring thesps Hugh Laurie and Uma Thurman, the Mediaset Premium Gallery offering consists of just three channels, each with a mix of movies and serials.
What makes them so alluring — and competitive with Murdoch’s satcaster Sky Italia — is that they are packed with 3,000 hours per year of hot, Hollywood product thanks to four-year volume deals Mediaset inked last year with Warner Bros. and Universal worth a whopping $500 million-$600 million.
Mediaset has since also pacted with NBC Universal to launch the male-oriented Steel on Premium Gallery, produced independently by NBC U. It will feature blocks of the Sci Fi channel, which has finally landed in Italy, the only major European market where it was absent, notes NBC U Italy topper Luca Cadura.
Besides Laurie starrer “House,” a former Sky Italia staple that Mediaset is beaming exclusively on the pay-package’s family-oriented Joi channel, the offering includes “ER,” “Law & Order,” “The OC,” “Veronica Mars,” “Friends” and “Gossip Girl” — the last three on femme-skewed Mya. All peppered with hit pics such as “Ocean’s Thirteen,” “The Bourne Ultimatum” and “300,” to name a few.
At e8 ($11.60) a month, Premium Gallery is competitively priced, especially considering that Italy’s free DTT offerings include RAI Sport, Tarak ben Ammar’s Sportitalia, BBC World and Mediaset’s own free DTT channel Iris, dedicated to movies and fiction. On top of that, Italos can buy soccer and movies from Mediaset in pay-per-view.
“There is a huge segment of the Italian audience out there willing to pay for TV; but not for lots of channels that they aren’t interested in,” said Piersilvio Berlusconi unveiling the package in Monte Carlo’s posh Hotel de Paris. “Our goal is not a bloody war, but to compete and cohabit, even if that is incredibly difficult.”
Berlusconi said he planned to meet News Corp.’s James Murdoch to discuss putting Premium Gallery on Sky Italia as a separate offering.
Sky, for its part, feigned indifference. “It proves that Italy’s pay TV market is open to pluralism and competition,” says Sky Italia spokesman Tullio Camiglieri.
According to Milan media analyst Francesco Siliato, author of a recent report on digital terrestrial pay TV in Europe, Mediaset’s move won’t have a big impact on Sky’s more high-end 4.3 million subscribers, who pay an average of $52 per month for dozens of channels, even though Sky offers a $21 basic package.
Still, as Mediaset digital director Federico Di Chio points out, “Without the product we bought from Warners and Universal Sky Italia will be short about 250 movies a year and between 30% and 35% of their prime series.”
That is the type of leverage Mediaset will bring to the table when talking to Sky Italia about launching from its platform.
Meanwhile, Mediaset plans to break-even by 2010 by having Premium Gallery beam into 3 million Italian homes. As 5.6 million homes are already equipped with a DTT decoder that goal seems more than realistic.