Mediaset must invest to stay competitive, say analysts

Italian broadcaster Mediaset needs to continue to invest in order to protect its share of the television market, according to analysts.

Investment bank Morgan Stanley noted that the broadcaster has been forced to implement its first cost cutting plan in recent history as a result of difficult conditions facing its domestic TV operations.
“The rapidly increasing penetration of digital TV allows Italian households to receive more free-to-air channels, This is leading to the fragmentation of audiences. Mediaset needs to keep investing to protect its 55% share,” it wrote in a report.
“Mediaset is suffering from its size. Indeed, since it is the dominant TV operator (55% market share) while TV is by far the largest medium in Italy (57% of Italian ad spend), the group is very heavily sensitive to fragmentation, even coming from much smaller operators. Every percentage point of market share lost by Mediaset is equivalent to €40 million i.e. more than 10% of Italian EBIT,” the bank added.