March 1, 2010 / 5:17 PM / in 8 years

Italy allows product placement in media decree

* Product placement allowed on TV shows

* Lowers amount of advertising on pay-tv channels

* Moves seen benefitting Berlusconi’s Mediaset group

MILAN, March 1 (Reuters) - Italy’s government approved a decree that allows product placement on television programmes, a move analysts said would mainly benefit Prime Minister Silvio Berlusconi’s Mediaset (MS.MI) broadcaster.

The decree also lowers the amount of advertising that pay television players can broadcast and introduces a daytime ban on adult programming, which is seen primarily hurting Mediaset archrival News Corp (NWSA.O) satellite unit Sky Italia.

“Common rules are introduced for all services that broadcast images on any platform,” Industry Minister Claudio Scajola said in a statement on Monday after the decree was passed.

    “European rules foreseeing more flexibility for advertising (are introduced), including product placement in TV programmes; (as well as) rules that strengthen safeguards for under-aged (viewers),” Scajola said.

    Analysts said on Monday product placement could benefit Mediaset because of its leading position on Italy’s TV advertising market, while new pay-TV advertising ceilings should hurt Sky Italia.

    Mediaset collects more than half of what is spent for TV advertising in Italy and its Mediaset Premium digital terrestrial pay-TV package already complies with the new ceilings.

    Advertising accounts for 6 percent of Sky Italia’s revenue and 50-60 percent to its earnings before interest and tax, according to estimates from Bernstein analysts. (Reporting by Danilo Masoni; Editing by Tim Dobbyn)

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