Mediaset expands satellite service

Adds Disney Channel, Premium Calcio

ROME -- Italian broadcaster Mediaset said Thursday that it would expand its satellite broadcast service to include the Disney Channel and all-sports channel Premium Calcio as it gears up to battle entrenched Italian satellite television leader Sky-Italia, a subsidiary of Rupert Murdoch's News Corp.

The expected clash in the satellite television sector pits Murdoch against Italian prime minister and media mogul Silvio Berlusconi, Mediaset's leading shareholder. Murdoch and Berlusconi worked together in the past, often in opposition to state broadcaster RAI, which has a limited satellite presence.

Mediaset said its Premium service doubled revenue in the first quarter compared with the same period in 2007, reaching 110 million euros ($174 million).

Mediaset Premium, which expects to have 420,000 customers by the end of the year, predicts it will produce more than 400 million euros ($632 million) in revenue this year, with losses totaling 70 million euros ($111 million). The company expects to break even by 2010.

Despite the fast growth, Mediaset Premium remains far behind Sky-Italia in customer size. The News Corp. unit had 4.4 million subscribers by first quarter end and could reach the 5 million-customer level by early 2009 even though its pay-for packages generally cost more than Mediaset Premium's.