Move may mark softening in war with Mediaset

ROME — Rupert Murdoch’s Sky Italia and Silvio Berlusconi’s Mediaset/Medusa have reupped their three-year volume agreement under which Sky is acquiring satellite rights to some 90 Medusa movies, in an unexpected move for the two battling media giants.

The deal comprises Medusa’s entire September 2009-2012 lineup, made of 40% of high-profile Yank pics, such as Martin Scorsese’s “Shutter Island” and Woody Allen’s “You Will Meet a Tall Dark Stranger,” and 60% of hot Italo titles, including Gabriele Muccino’s “Kiss Me Again.”

Medusa, which is owned by Mediaset, is Italy’s top movie outfit.

Move comes somewhat as a surprise due to the fierce competition between Sky and Mediaset and escalating acrimony since 2008 when Mediaset, Italy’s top private terrestrial broadcaster, launched its digital pay TV operation.

Financial terms of the deal were not disclosed.

Mediaset vice chairman Piersilvio Berlusconi, who is Silvio Berlusconi’s son, said he hoped the agreement would mark “a useful step to create new conditions of reciprocity.” He was referring to what he called Sky’s “previous proprietary and monopolist attitude,” specifically with regards to Fox pics and World Cup soccer rights, which News Corp. has never agreed to sell to Mediaset.

“We have no obsession with exclusivity: all viewers of all platforms must be able to see the most interesting content,” commented Berlusconi Jr.

“We are very happy to renew our agreement with Medusa,” said Sky Italia vice president programming and promotions Andrea Scrosati, who praised Medusa for “the quality of the titles it produces and distributes.”

While Mediaset’s cheaper DTT pay TV service, which is called Premium, has been steadily growing, with 4.4 million active cards in June, Sky Italia saw its first ever drop in subs during the past two quarters — down 39,000 between January and March 2010. Sky Italia currently has 4.7 million clients.

Last month in an effort to boost biz Sky Italia cut the cost of its basic movie and soccer packages by 25% to a monthly E29 ($36) in what CEO Tom Mockridge said was “a response to the recession and difficulties that many Italian people have.”

The cost of Sky in Italy had risen slightly in 2008 after the Silvio Berlusconi government doubled the sales tax to 20%, a move that hurt Sky and triggered increasing hostilities.

In related news, Italy’s communications watchdog on Tuesday noted that in fiscal 2009 Sky Italia generated more revenue than Mediaset for the second consecutive year — E2.71 billion ($3.4 billion) compared with Mediaset’s E2.51 billion ($3.15 billion) — confirming that, despite some difficulties, Sky remains a mega-money spinner for News Corp. and a major threat for Mediaset.

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