ROME — Rupert Murdoch’s European pay-TV platform Sky is entering the Italian theatrical distribution business as a distributor of Italian movies by forging a partnership with five leading local production companies — an innovative move that could shake up Italy’s film industry.
Under the plan, Sky Italia will set up an Italian theatrical distribution unit dedicated to local product in an alliance with prominent shingles Cattleya, Wildside, Lucisano Group, Palomar and Indiana Production. Together, they account for roughly 40% of the domestic box office.
The unusual partnership, hinted at in press reports earlier this year, will offer Sky Italia easier access to local content, which it views as crucial to subscriber growth.
In a key aspect of this unusual alliance, 40% of the still-unnamed distribution company will be in the hands of the producers, while 60% will be held by Sky Italia.
“This brand-new distribution arm is meant to support and promote Italian cinema through an innovative, open and participatory model,” a Sky Italia statement said.
The agreement marks the first time a media company will be “joining forces with some major Italian independent producers to offer the market new opportunities,” it added.
The partners will all have decision-making power and access to the company’s books. Sky will hold all TV rights, pay and free. The company will act as either purely a theatrical distribution service or as a co-financer of films, on a case-by-case basis. Other Italian production companies are expected to join. The plan is to be operational in about a month.
The new company will make Sky Italia the third broadcaster in Italy with a theatrical distribution arm and could break up the current duopoly of state broadcaster Rai and Mediaset/Medusa, the latter controlled by former Italian Prime Minister Silvio Berlusconi. Of those two, Rai’s 01 Distribution unit currently dominates the market for Italian homegrown product ever since Mediaset/Medusa scaled back a bit several years ago.
However Mediaset/Medusa owns hit-making shingle Taodue, whose 2013 comedy “Sole a catinelle” is Italy’s all-time top grosser at $70 million. Mediaset also has an output deal with Warner Bros, which releases a substantial number of Italian titles.
Sky’s sister company Fox is a top player in Italy’s theatrical distribution market but does not release Italian pics.
Sky’s decision to enter Italy’s theatrical distribution arena strictly for local product stems from a strategic necessity. It means Sky Italia is now guaranteed to get premium Italian movie content which currently accounts for almost half the movie content audience share on its platform. Of the top 10 movies on its Sky Cinema channel, seven are Italian.
In other words, Sky Italia no longer has to go ask its competitors, Rai Cinema and Medusa, for pay-TV rights to Italian movies.
In another sign of how Sky Italia views local content as a key subscriptions driver, it recently took over as the broadcaster of Italy’s David di Donatello awards, the country’s top film nods, which historically used to air on Rai.
Sky is announcing the move on the eve of the Venice Film Festival, which opens Wednesday, where it will likely become the subject of major buzz among Italian industry execs.
In Venice, Sky will launch the world premiere of two episodes of Italian director Paolo Sorrentino’s TV series “The Young Pope,” which features Jude Law as conservative cigarette-smoking American pontiff Pius XIII, and also teen pregnancy drama “Piuma” by Italo-Brit writer and director Roan Johnson (“The First on the List”), which it co-produced with Palomar.