MONTE CARLO — Mediaset is launching three digital terrestrial pay TV channels in Italy in a move that will place the Silvio Berlusconi-controlled web in direct competition with Rupert Murdoch’s Sky Italia.
The top Italian commercial broadcaster, which had been previously selling soccer and movies in pay-per-view through its unique system of pay-as-you-go cards used with a digital decoder, now also becomes a de-facto DTT pay TV pioneer.
Mediaset’s new pay TV package, called Premium Gallery, consists of three channels packed with 3,000 hours per year of prime Hollywood dramas including “House,” “ER,” “Law and Order,” and “The O.C.,” and first-run movies such as “Ocean’s 13,” “The Bourne Ultimatum” and “300.”
The bulk of this product comes from two four-year volume deals sealed last year by Mediaset with Warner Bros. and Universal respectively, reportedly worth as much as $500 million-$600 million.
Mediaset and NBC Universal have now also pacted to launch the male-oriented Steel, one of Premium Gallery’s three channels, a prominent segment of which will feature blocks of NBC U’s Sci-Fi channel, which has now found a foothold in Italy, the only major European market where Sci-Fi was not yet present, said NBC U Italy topper Luca Cadura.
Steel will be independently produced for Mediaset by NBC U, which is also present on Sky Italia with its Studio Universal classic movie channel.
Premium Gallery’s two other channels are the femme-skewed Mya, featuring series such as “Gossip Girls” and “Veronica Mars,” and pics like “Pride and Prejudice,” and the family oriented Joi channel, which will beam “House,” a ratings champ in Italy.
“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 Mediaset vice-president Piersilvio Berlusconi during a packed presser in Monte Carlo’s posh Hotel de Paris.
Premium Gallery will cost a mere Euros 8 ($11.70) a month.
Most of Sky Italia’s 4.5 million subs pay about Euros 40 ($58) a month, though Sky does offer a basic package for Euros 15 ($22), but this does not include movies.
During the presser, Berlusconi Jr. said he is in talks with Sky Italia to launch Premium Gallery on their platform as a separate package.
“Ours is an open model and we want to make the content available on as many platforms as possible,” he said.
But the prospect of an agreement of this type between Mediaset and Sky Italia did not temper the tone used by Mediaset with regards to Italy’s single satellite pay TV operator.
“Without the product we bought from Warners and Universal, Sky Italia will be about 250 movies a year short and will be missing between 30%-35% of their prime dramas,” underlined Mediaset digital director Federico Di Chio.
Mediaset, which launched three free DTT channels in November, said it has now invested Euros 1.5 billion ($2.2 billion) on digital infrastructure and content ahead of Italy’s planned 2012 DTT switchover.
Mediaset has sold 2.3 million pay-as-you-go cards with a 70% growth in DTT PPV in 2007, when the service yielded about Euros 200 million ($292 million) in revenues.
Mediaset CFO Marco Giordani said break even would come in 2010 when 3 million subs are forecast, each one expected to be worth Euros 100 ($146) per year.