Murdoch's Sky says Berlusconi's Mediaset Unfairly Dominates Local Market

The head of News Corp.’s Italian unit, Sky Italia Srl, called for more competition in the country’s media market, saying it’s dominated by Prime Minister Silvio Berlusconi’s Mediaset SpA.

“More freedom in the TV sector to encourage more competition is needed,” Sky Italia Chief Executive Officer Tom Mockridge wrote in a letter to Corriere della Sera newspaper published today. “The Italian system has permitted a single company, Mediaset, to have such a dominant position in the TV sector to the extent it receives 65 percent of advertising revenue.”

Mediaset, Italy’s largest private television broadcaster, competes with Rupert Murdoch’s Sky Italia. Mockridge’s letter underscores the tension as the companies compete for greater shares of the advertising market. While Mediaset dominates the free-to-air television market, Sky is the top pay-TV provider.

Mockridge “cites Mediaset’s advertising revenue without revealing his own company’s monopoly of the satellite platform, where it collects almost 90 percent of pay-TV revenue,” Mediaset Chairman Fedele Confalonieri said in an e-mailed statement today. “We won’t take lessons in competition from a member of the world’s most dominant media groups.”

Sky Italia protested in January after the government passed new regulations to limit the maximum amount of advertising per hour of pay-TV programming, to 12 percent in 2012 from 18 percent last year. Free-to-air broadcast channels, including those on Berlusconi’s network, will be able to increase advertising to a maximum of 20 percent per hour from 18 percent.

Sky Italia has said that it faces restrictions in entering Italy’s new digital-terrestrial TV market. The European Commission said July 20 that Sky Italia can bid for frequencies to enter the free-to-air digital market.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. and its Dow Jones unit in providing financial news and data.

To contact the reporter on this story: Steve Scherer in Rome at scherer@bloomberg.net

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