Dahlia TV, one of the two digital terrestrial pay-TV services in Italy, has gone into liquidation. According to a statement by Telecom Italia Media (TIM), which owns a 10 per cent stake in Dahlia TV, shareholders were told yesterday that the company would be wound up and an official receiver appointed.
Sweden's Airplus TV owns an 83 per cent stake in Dahlia TV, with FilmMaster Television holding the remaining seven per cent. Airplus took control of TIM's digital terrestrial service, formerly branded as la 7 Cartapiu, in 2008.
Dahlia TV uses digital terrestrial television frequencies to offer pay services including sport, adult channels. Customers buy smart cards preloaded with credits and can buy one-off events or packages of up to one year. In common with Mediaset Premium, which follows a similar business model, Dahlia TV has tried to shift more of its customers to one-year packages.
The failure of Dahlia TV is the latest demonstration of how hard it is to carve a niche in developed European pay TV markets alongside well-entrenched market leaders. Sky Italia, backed by News Corp, had 4.8m subscribers at the end of Q3 2010 - all on one-year contracts. At the same point, Mediaset reported 3.3m customers - around half of whom were on one-year contracts. IHS Screen Digest estimated that Dahlia TV had 750,000 customers.
Both DTT operators have benefited from Italy's transition to digital terrestrial, with populous regions like Lombardy and Piedmont the latest to switch off analogue TV. However, persuading customers who acquire a pay DTT smart card as part of bundle with a DTT decoder to pay for services on a continuing basis has proved difficult.
The failure comes only a few months into the new contracts for Serie A football. While Dahlia TV secured one of the two exclusive packages of DTT rights (paying an estimated €63m over two seasons), its offer is inferior to that of Mediaset, which signed up all the most popular clubs, and Sky Italia, which shows all matches via satellite. Mediaset Premium is the most likely candidate for Dahlia's rights.
For Airplus TV, this reverse follows stillborn pay DTT ventures in Spain and Portugal. Airplus TV was a founding investor in Swedish DTT platform Boxer (exiting in 2004) and Plus TV in Finland.
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