Ad pickup, broadband to revive Italy TV mkt

MILAN, ITALY: Italy's television market is seen growing 3.4 percent a year to 9.2 billion euros by 2012, as advertising recovers from recession and broadband starts contributing to pay-TV growth, a new study shows.

News Corp unit Sky Italia, Italy's No. 1 pay-TV player, will eat into Mediaset's domination of TV advertising, ITMedia Consultancy general manager Augusto Preta said, outlining a study to be published next week.

He expected Sky's advertising revenues to increase by 100 million euros to about 350 million euros in 2012.

TV advertising in Italy fell 11 percent to 3.9 billion euros in 2009 as crisis-hit advertisiers cut marketing budgets.

"On the back of a slight economic recovery, TV advertising, which is the most important part of this industry, will return to growth, ensuring that in three years we return to levels similar to those of 2008," Preta told Reuters on Tuesday.

TV advertising will grow an annual 2.8 percent to 4.2 billion euros ($5.9 billion) in 2012 while pay-TV revenues are seen rising 5.6 percent per year to 3.3 billion euros in 2012, underpinned by digital terrestrial offers and by a dynamism in IPTV and broadband-based television.

"Pay-TV ... has grown even during the crisis when people stayed more at home watching TV," Preta said.

Sky Italia, which broadcasts on satellite, is Italy's top pay-TV player, but its leadership has been eroded by a lower-cost digital terrestrial offering by new entrant Mediaset.

IPTV and broadband-based television has a limited market share but Preta said this sector has strong growth potential.

"In the coming years growth will come mainly, even though marginally, from new IPTV offers and the so-called over-the-top television," he said, referring to offers from such groups as Samsung Electronics and Sony.

Taking the TV market as a whole, Sky and Mediaset will continue in a head-to-head battle for leadership with similar market shares and revenues of around 3 billion euros