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Sky Poised to Enter Theatrical Distribution Market for Local Titles in Italy

ROME — Murdoch-owned paybox Sky is poised to enter the theatrical distribution market in Italy as a distributor of local movies in a bold move likely to shake up the country’s evolving theatrical distribution market.

Sky Italy has entered talks with several Italian producers to start directly releasing a portion of their product theatrically itself before beaming the titles on Sky. It intends to pay for these rights based on an “escalator” model tied to their box office performance in Italian movie theaters.  News of the move, which is not yet finalized, was first reported by Italian financial daily Il Sole 24 Ore.

“The growth of the Italian film industry and its presence on our channels are strategic goals for Sky,” said Sky chief of content Andrea Scrosati, confirming the talks. “Any initiative that stems from a comprehensive perspective that involves the best in Italian creativity and production capacity interests us.” “Of course everything has to be evaluated in specific detail and that phase is still under way,” he added.

Italian companies that Sky has entered talks with include Cattleya, Wildside, Lucisano Group, Palomar and Indiana Production, which amounts to roughly half of the homegrown box office, excluding one-off blockbusters.

Sky would become the third broadcaster in Italy with a theatrical distribution arm, after Mediaset’s Medusa distribution and pubcaster Rai’s 01 Distribution unit. 01 Distribution currently dominates the market for Italian homegrown product ever since Medusa scaled back.

Sky’s sister company Fox is a top player in Italy’s theatrical distribution market but does not currently release Italo pics.

In entering Italy’s theatrical distribution arena Sky would be competing with Warner Bros. which releases a substantial number of Italian titles and has an output deal with Mediaset that includes those Italian pics.

Sky Italy topper Andrea Zappia has met with Rai general director Antonio Campo Dall’Orto to assure him that Sky would not take free-TV rights to the movies it acquires, even thought it operates three small free-to-air channels besides its Sky paybox, which has roughly 5 million subs and is the country’s top pay-TV outfit.

Still entering the theatrical distribution arena would position Sky as a partner for Italian producers with an alternative business model to Rai Cinema, which has been holding on to a chunk of equity when it boards Italian movies for which in many cases it sells pay-TV rights to Sky.

Zappia recently told Italian daily La Republica that Sky Italy could invest up to Euros 7 billion ($7.9 billion) in Italy but is seeking a market “with clear, certain and equal rules for all.” He also told the paper that Sky plans to double the number of local productions in Italy.

Another clear signal that Sky is ramping up to become a key player in Italy’s film industry is the fact that it recently took over Italy’s David di Donatello awards, the country’s top film nods, which it will be airing on April 18 instead of Rai.

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