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Italo Media Mogul Berlusconi Regains Political Power

His PDL party secures seats in government, Mediaset preps Netflix-style distrib

ROME — Italy got a new government on Sunday, sealing Silvio Berlusconi’s stunning political comeback with key posts for his PDL party just as his Mediaset TV empire is prepping to launch into digital content distribution, possibly pre-empting Netflix’s bow in Italy.

Enrico Letta, a center-left PD party member, was sworn in as prime minister, heading a bi-partisan coalition with the conservative PDL. This ends a two-month stalemate after February’s elections produced no clear winner but brought Berlusconi, battered after three stints as prime minister, back from the political graveyard.

Letta’s uncle, Gianni Letta, is Berlusconi’s right-hand-man. Though they are in very different political camps, they are now government allies which can only be to Berlusconi’s advantage.

“He’s a person with solid credibility: I like him,” Mediaset VP Piersilvio Berlusconi said of Letta at an April 24 Mediaset shareholders meeting in Milan where CEO Fedele Confalonieri announced plans for a Netflix-style service operational by year’s end.

Exec called it “a service with no equals in Italy, providing an incredible amount of content visible online, on personal computers, tablets and new generation TVs.”

Confalonieri has lately been ranting against Google, Amazon and Apple “for not paying proper taxes in Italy,” referring to the fact that the local services are fiscally based outside Italy. He has urged pols to “allow Mediaset to compete with these American companies on a level playing field.”

While Netflix last year announced it was hiring Italian translators, indicating plans to set up an Italo outpost, this has yet to happen.

Confalonieri and Berlusconi Jr. have recently denied reports that Mediaset’s DTT pay TV operation is for sale, while not ruling out partnerships with foreign players.

Bucking the country’s general trend, revenues at Mediaset’s pay TV Mediaset Premium service were up 10% for the first quarter of 2013 with subs at roughly 2 million. Some 40,000 to 50,000 new families per month signed up for its Premium Play on demand offer, which now has 1.2 million subs. It provides a perfect infrastructure for an on-demand Italo onslaught.

Mediaset in March posted €287 million ($374 million) in losses for fiscal 2012, its first annual net loss ever, as companies cut ad spend due to the economic crisis. Ad revenues for January and February 2013 were down 16%. But with the new government in place business for its free-to-air channels is expected to pick up.

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