Mediaset, Sky-Italia eye content deal

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ROME -- Italian broadcaster Mediaset said Friday that it is in talks with rival Sky-Italia in an effort to hammer out a deal that would provide some of Mediaset's pay-per-view content on Sky's satellite-based channels.

If a deal is reached, it would be a new collaboration between Mediaset's Silvio Berlusconi and Rupert Murdoch, the controlling shareholder at Sky-Italia parent News Corp.

Berlusconi and Murdoch were allies for many years until News Corp. began investing heavily in its Italian operations, setting the two companies on a collision course.

A spokesman for Sky-Italia confirmed that "discussions" between the two companies were under way but declined to elaborate.

Such a deal would not only put the Berlusconi-Murdoch rivalry in the past, it would give Mediaset a far greater reach for its pay-per-view channels and provide new content for Sky-Italia.

The negotiations come in the midst of Mediaset's efforts to transform itself from a pure broadcaster into a major content producer as a hedge against declining advertising revenue.

In 2007, Mediaset acquired control of Dutch reality television producer Endemol and it moved Berlusconi's film production and distribution giant Medusa under the Mediaset umbrella.

In its statement Friday, Mediaset said it will not abandon the strategy of selling pay-per-view content under the Mediaset Premium banner, only that it will begin offering some of its Mediaset Premium content to Sky-Italia subscribers.

Mediaset said earlier in March that Mediaset Premium, which was founded in 2005, continued to lose money. But the company reiterated projections that it would break even by 2010.
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