Pay-TV ad limits will harm Sky Italia

Italian Prime Minister Silvio Berlusconi's move to lower advertising ceilings for pay TV will hurt Sky Italia unit and curtail growth at the other networks it says.

New Italian regulations would gradually limit the maximum amount of advertising per hour of pay television to 12 per cent in 2012 from 18 per cent now. Free-to-air broadcast channels, including those on Berlusconi's Mediaset network, will be able to increase their advertising to a maximum of 20 per cent per hour from 18 per cent.

“There was no need to interfere in the classic process of supply and demand, which should be left to the market,” Andrea Scrosati, vice president for corporate and market communications at Sky Italia SpA, said after testifying on the rules before a Senate committee. “Advertising revenue is the engine of this sector. If you add limits, you're limiting growth.”

Berlusconi Mediaset, Italy's largest private TV broadcaster, which competes with Sky Italia. On December 17th, the government passed rules that will go into effect in February if they're approved by the Cabinet. They aren't subject to a parliamentary vote.

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