ROME: News Corp-owned Sky Italia is set to face fresh competition for Italian satellite viewers, with news that free-to-air broadcaster MediasetSpA is launching a pay-TV offering in the country.
Mediaset, a private company founded by prime minister Silvio Berlusconi in the early 1980s, has historically dominated Italy's TV airwaves with several free channels.
But Sky Italia's 180-channel satellite package has amassed 30% of the nation's €8.7 billion ($10.9bn; £7.95bn) TV market since its debut in 2003, says Rome-based media consultancy IT Media.
The fight back from Mediaset includes 18 new digital channels and a June entry into satellite broadcasting via a tie-up with Telecom Italia and the state broadcaster RAI.
Mediaset's pay TV marketing director Marco Leonardi described the move as a "switching point" in strategy.
The company remains the runaway leader of TV advertising revenues with a 58% share, compared to Sky Italia's total of 5%.
However, IT Media expects this to fall to 56% next year – some way from a 63% peak in 2005 – whilst the recession is expected to continue to depress the TV ad market as a whole, which shrank 1% last year.
Pay-TV revenue, however, has remained a beacon of growth for the industry, delivering a 10% increase in 2008 to €2.5 billion.
Data sourced from Wall Street Journal; additional content by WARC staff