French media conglomerate Vivendi will be leveraging its holding in Telecom Italia and French programmer Canal Plus to launch a new channel on Telecom Italia's TV service, TIM. This is according to a report in Paris-based financial daily Les Echos.

The premium channel, named Canale Plus, will have Telecom Italia as the majority owner and will feature entertainment programming, film and sports. In particular, Canal Plus's ability to garner sports rights is an important driver of the new venture.

In addition to the channel, this joint venture will work on acquiring rights to audio-visual content and directly producing original films and series. According to the report, the newly formed venture could start developing new productions as early as October this year.

The announcement is the latest twist in an ongoing tussle with Mediaset, the Italian broadcaster owned by ex-prime minister Silvio Berlusconi. After initially agreeing to acquire Mediaset's Premium pay-TV business for €800 million ($857 million) last year, Vivendi decided to suddenly pull out, citing "overly-optimistic" business projections from Mediaset. The two companies are fighting it out in court currently.

In addition, Vivendi's stake in both Mediaset and Telecom Italia has been flagged by Italian regulators, who have asked Vivendi to reduce its stake in one or the other to a permitted threshold. Vivendi is appealing the ruling but it increasingly looks like it will be reducing its stake in Mediaset. This new initiative suggests that it is looking at a different content strategy for the Italian market altogether. (See Vivendi-Mediaset: Bad Romance Gets Worse.)

The report comes two days after the departure of Flavio Cattaneo, former CEO of Telecom Italia who reportedly quit under pressure from parent Vivendi. Reports suggest that despite Cattaneo's turnaround of the Italian incumbent's fortunes, Vivendi was looking to appoint Chief Convergence Officer Amos Genish the managing director of Telecom Italia. Upset by the decision to curtail his authority and limit his control of the company, Cattaneo decided to call it a day. (See Cattaneo Quits as Telecom Italia CEO, Gets €25M.)

It's not entirely clear what kind of entertainment programming Canale Plus will be creating, but a soap opera based on the Vivendi-Mediaset-Telecom Italia saga seems full of dramatic potential. And the rights to it would already be in-house.

— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation