Mediaset pivots to free as Premium becomes OTT

Mediaset is “transforming” rather than “shutting down” its Mediaset Premium pay TV business after making the offering an OTT-only service, according to chief financial officer Marco Giordani.

Speaking on an earnings call after Mediaset posted reduced revenue and EBITDA but an improved net profit, Giordani said that Mediaset was reorienting the business to take account of its lower subscriber base as a result of no longer having football rights.

What we have closed is the traditional pay TV operation with card-based subscription,” he said.

“We are adopting a more digital and modern way of serving and providing the service to our customer using OTT, which means that we don’t have any more cards, we don’t have decoders any more, we don’t have CRM with a call centre any more.”

Giordani said that Mediaset is now “clearly following a model” based on advertising and free-to-air content “with some pay services’

Giordani declined to comment on Mediaset’s interest in pan-European consolidation, but confirmed that the group was “working on a business model” involving the potential consolidation of Mediaset España, which has been widely seen as a first step towards a wider European play potentially involving other commercial broadcasters.

The contraction of its pay TV arm’s base hit Mediaset’s revenues for the quarter to March. Mediaset Italy’s revenues in Q1 tumbled to €492.1 million from €609.6 million, which the company attributed to the decline in the Mediaset Premium base following the termination of its Premium Calcio football offering.

Mediaset dropped Premium Calcio from after losing control of the exclusive rights to Serie A Italian football and Champions League football and pulled Mediaset Premium from the country’s digital-terrestrial TV platform as part of a move to “digital transform” the group’s pay model.

In Spain revenues were down a more modest 1.5% to €226.1 million, with advertising revenues more or less flat year-on-year.

Mediaset’s battle with shareholder Vivendi and Simon Fiducaria, the investment vehicle in which Vivendi transferred a portion of shares to meet Italian regulatory restrictions over having shares on both Mediaset and Telecom Italia, is currently focused on a court case over the pair’s involvement in shareholder meetings that is set for a further court hearing on October 22.

Mediaset overall posted revenue3s of €718.2 million for the quarter, down from €839.2 million last year, with EBITDA down from €283.3 million to €221.3 million. However net profit was up from €3.5 million to €39.8 million thanks to reduced amortisation of TV and movie rights.