Mediaset looks to low income consumers

06 October 2009

MILAN: Mediaset, the Italian media company, is targeting low income consumers with a new discount subscription service, as it seeks to break Sky Italia's stranglehold on the country's pay-TV market.

Sky Italia is estimated to hold 90% of the pay-TV market in Italy at present, and posted higher revenues than Mediaset, part of the media empire owned by prime minister Silvio Berlusconi, for the first time in 2008.

Earlier this year, Marco Giordani, the latter company's chief financial officer, said it wanted to boost its share from 3% in 2008 to 15% in five years time.

As part of this process, Mediaset is “targeting a different public from Sky Italia - those families who can't afford an expensive pay-TV package, but still would like to have access to high-quality content and a multichannel offer," a spokesman said.

Similarly, the Milan-based firm will encourage users of its short-term, pre-paid cards – which typically last for around three months – to sign up for longer deals on a low-cost offering featuring around 12 channels.

Oriana Cardani, a media analyst at Centrobanca, said Mediaset had a "poorer" range of content than Sky, but as it "aims at the lower end of the market, may exploit this phase of recession as its potential target widens."

It is also thought such an approach may yield returns as Italy aims to complete the switchover from analogue to digital television by 2012.

Mediaset recently allied with RAI, the state-owned broadcaster, to launch a free satellite system, TivuSat, aimed primarily at the 5% of households in the European nation not covered by terrestrial digital platforms.

Data sourced from Wall Street Journal; additional content by WARC staff