Canal Plus-owned Italian pay-TV operator Telepiu is expected to make a loss in 2000 but subscriber figures continue to rise.

Canal Plus’ Italian unit incurred losses of Euro187 million in 1999, compared to Euro146 million in 1998. The losses were mostly due to increased programming costs – the acquisition of sports rights and promotional costs. Canal Plus has been seeking Italian partners to share the burden. However, its latest attempt, with Italian telco Enel, has been put on hold due to a conflict of interest which arose when Canal Plus’ main shareholder Vivendi struck an alliance with Enel competitor Vodafone Mannesmann.

Publishing group RCS is seen as the front-runner for taking up a minority stake in Telepiu, especially after buying a 5 per cent stake in RaiSat back in January. However, RCS’ contribution may not be enough to reduce the financial burden on Canal Plus (Telepiu is expected to report profits only from the beginning of 2003).

However, the number of Telepiu subscribers increased in 1999 to 2.144 million from 1.509 million a year earlier, significantly ahead of the 440,000 subscribers claimed by its rival Stream. The Palco PPV service, which was launched less than one year ago, is proving a success, with nearly half of digital decoder owners ordering either a movie or a football match. Out of some 400,000 subscribers to Telepiu’s digital service D+, 184,000 have accessed its PPV service since September, when the service was introduced.

Meanwhile, the Italian anti-trust authority has extended to June 15 the inquest on pay-TV operator Telepiu’s possible abuse of its dominant position.

The authority requested further information from Telepiu and rival Stream, “regarding up-to-date data from December 31, 1999 on pay-TV subscriptions, including subscriptions to football packages for Serie A and B games” for 1999-2000.

In a separate development, RAI and Mediaset have won a battle against the anti-trust authority that claimed they schemed to keep most rights to major sports events out of the hands of their competitor, Cecchi Gori Communications. A Rome regional court on March 9 overturned a 1998 anti-trust authority ruling and annulled the stiff fine it could have entailed for RAI and Mediaset. The court also rejected an appeal by RAI, Mediaset, and Cecchi Gori against another anti-trust ruling that said instead of bidding competitively for Italian football cup rights, the three networks had reached a backroom deal to carve them up amongst themselves and keep the price down. RAI has announced it will appeal. Also, the authority said on March 16 that it has opened proceedings against Mediaset and TMC, claiming they have violated advertising rules by bombarding football fans with five-second mini-spots during matches. Mediaset and TMC, which is owned by film and TV magnate Vittorio Cecchi Gori, now have two weeks to rebut the watchdog’s charges. They could face stiff fines if found guilty.