Italy's home entertainment market had a booming year in 2003 thanks partly to a successful battle against piracy and to the strength of DVDs, national home video organisation Univideo said on Wednesday.

According to Univideo's latest figures, the Italian home entertainment sector registered a turnover of Euros 697m in 2003, as 20m DVDs and 14m video cassettes were sold or rented in the country.

"The market has recorded an extraordinary increase particularly in the last few months," said Univideo general director Davide Rossi. "This is partly due to all those people who have returned to the video market thanks to the smart card's very efficient battle against piracy."

Since News Corp took over pay-TV platform Telepiu, it has enhanced the operation's smart card security system. Previously many Italians could watch the pay-TV service and its movies for free via pirated smart cards.

Rossi said the market had also been bolstered in 2003 by the success of DVDs. There are currently 4m DVD players in Italy and according to Univideo, the figure is expected to rise to 10m.

However, while he anticipated that in 2004, digital cinema will be "economically stronger than any other ancillary sectors," Rossi also warned of the risks of having shorter theatrical and video windows.

"We need to avoid any kind of overlapping. I don't think any one wants to play the game of 'the winner takes all,' because that could seriously unbalance and harm the market in the medium term. It's healthy for there to be some competition between different sectors, but there are laws to regulate competition."

He warned: "Any blindly agressive politics will only lead to an implosion of the whole system."