Mediaset goes head-to-head with Murdoch

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ROME -- Italian broadcast giant Mediaset on Friday announced plans to add three pay television channels to its Mediaset Premium brand and took the wraps off new content deals with Time Warner and Universal.

Friday's introduction of the channels sets the company on a collision course with News Corp. subsidiary Sky Italia, indirectly pitting two of the world's wealthiest media moguls -- Mediaset's Silvio Berlusconi and News Corp.'s Rupert Murdoch -- against each other. Before the 2003 creation of Sky Italia, the two worked together on several deals.

The plan comes as Mediaset pursues several new initiatives, including talks to distribute Mediaset content online in Italy via Telecom Italia, FastWeb or Tiscali -- Italy's three most important ISPs.

Mediaset said that Mediaset Premium will cost subscribers about €8 ($12) per month. That's about half the price of Sky Italia's lowest-priced package, though the plans have different offerings: Mediaset's plan will offer little sports and a heavy emphasis on films. Sky Italia's basic package features no films but a wide array of sports coverage.

A Sky Italia spokesman declined comment.

Mediaset said the channels will start operating by midyear.

Also on Friday, the Milan-based broadcaster said it has won exclusive Italian broadcast rights for films from Time Warner and Universal, giving a boost to the Milan-based corporation's efforts to reposition itself as a content company rather than a pure broadcaster.

Terms of the deal were not released, but local media reports estimate that the two four-year agreements are worth about $600 million.

The company, which did not elaborate on the financial details, said the content will be used on Mediaset's pay channels but eventually will appear on the company's three broadcast networks in Italy.

During the past year, major moves intended to diversify the company's revenue sources have included acquiring control of Dutch reality program producer Endemol, moving Berlusconi's Medusa film production unit under the Mediaset umbrella and taking a stake in U.S. Spanish-language broadcaster CaribeVision.
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