Mediaset first-half profit plummets 73.5%

Fewer ads, failing pay TV and huge overheads hit Italo group

ROME — Silvio Berlusconi’s Italo commercial broadcast group Mediaset posted a 73.5% drop in first-half net profit to €43.1 million ($53 million) on Tuesday, as advertising in Italy and Spain, where it also operates, continues to dry up while its pay TV side struggles.

Ad sales fell 11.2% to $1.4 billion amid bleak consumer confidence. Meanwhile subscriber revenue at paybox Mediaset Premium dropped to $320 million from $325 million in the same period last year. Eight years after its start-up it has yet to break even, indicating that it may never fly.

Mediaset Premium is suffering from stepped-up competition from Rupert Murdoch’s Sky Italia, which has been beefing up its lineup with content such as Formula 1 auto racing and extensive Olympic coverage on 13 channels, one in 3D.

In the digital terrestrial free-TV arena, smaller players are eroding Mediaset’s market. Analysts say Mediaset needs a bold new digital strategy combined with radical cost cuts.

It has already announced plans to shave $307.5 million in costs over three years and industryites had expected that Mediaset would boost that to $492 million.

But it made no mention of further cuts on Tuesday.

With results slightly exceeding analysts’ negative expectations, Mediaset shares closed down 0.35% at $1.70. They have dropped 56% this year.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More TV News from Variety