Stephanie Wang
Jan 15, 2010

Live Issue... SingTel keeps its eye on the pay-TV ball

Barclays Premier League (BPL) deal heralds a new era and increased rivalry in the Singaporean market.

Live Issue... SingTel keeps its eye on the pay-TV ball
A sports rights package sealed at the end of last year is set to seriously shake up the TV market in Singapore in 2010, with implications for the previous market leaders in both the pay-TV and terrestrial sectors.

In August, Singapore’s StarHub will hand over the lucrative rights to screen the Barclays Premier League (BPL) to its rival SingTel for the next three years — a contract the leading pay-TV service has held since 1997. The BPL will join ESPN Star Sports on SingTel’s mio TV, which will also carry high-profile sporting events such as the FA Cup, Formula One, Wimbledon and the US Open. The prestigious package presents a major challenge to StarHub, tempting many subscribers to switch allegiance.

SingTel, the sole challenger to StarHub’s previously-held monopoly in Singapore’s pay-TV market, bid aggressively on the BPL in the hope of drawing more viewers to its platform, which launched in July 2007. To sweeten the deal for potential subscribers, the telco has also promised to cut the viewer cost of the BPL package by nearly 60 per cent.

The BPL win sparked a war of words between the two telcos, with each launching bargain sports packages in order to win and retain viewers. Industry experts see the wrangling as a positive development for the whole market. “Any increase in competition is a good thing for consumers, clients and agencies,” says Clinton Simpson, managing director of Universal McCann Singapore.

However, Simpson warns the increasingly fragmented market will also bring challenges, especially for advertisers with broad target audiences. “It places an increased importance on media agencies to know their clients’ target markets and the impact it has on them.”

The BPL deal could well inject some vitality back into the pay-TV market. Rajesh Mahtani, Starcom’s executive director of strategy and analytics for Southeast Asia, believes the pay-TV market in general is starting to show signs of sluggishness after registering steady growth in the wake of mio TV’s launch. He says pay-TV does enjoy surges in market penetration for milestone sporting events such as the football World Cup, but they are generally short-lived.

StarHub finds itself in the unaccustomed position of having to vigorously defend its turf. Until now, the company had been clearly dominating SingTel in the pay-TV market, where mio TV has received only a lukewarm reception. The BPL handover will go a long way to changing that.

Despite StarHub’s claims to the contrary, the impact of losing the BPL will be damaging for the telco. “I think we know what’s going to happen,” says Simpson. “People who like sport and love the BPL will go to mio TV. It’s as simple as that.”
Simpson says he has seen research that indicates mio TV could triple its subscriber base next year, with 70,000 viewers coming direct from StarHub. He proposes a variety of ways StarHub can move forward, including aggressive bundling of product offerings and introducing HD channels.

The developments also pose a strong challenge to terrestrial TV, which may well be the biggest loser in the deal as viewers migrate to attractive pay-TV packages. However, Mahtani believes terrestrial - over which state-owned MediaCorp still holds a monopoly - still matters, because, although half of Singapore’s population now has access to pay-TV, “advertisers need terrestrial TV to reach the other half”.

MediaCorp will nonetheless feel increased pressure to step up its efforts to stay relevant. Mahtani suggests it could explore ‘catch-up’ TV, redistributing content via other channels such as broadband, and increasing interactivity levels.
In the long run, the intensifying rivalry between StarHub and SingTel could herald a win for consumers, who will likely benefit from more affordable subscriptions and a wider range of quality programming.

But even while the dust was settling on the squabble over the BPL rights, the two telcos announced a joint bid for the rights to screen the 2010 football World Cup, promising they would sacrifice all margins to bring affordable coverage to Singaporeans. Based on this evidence, it seems the companies are at least willing to bury any perceived differences in order to stay on-side with consumers and, of course, advertisers.

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This article was originally published in the 14 January 2010 issue of Media.

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