SingTel v StarHub: It gets curiouser and curiouser

Singapore – Welcome to the Alice in Wonderland world of cable television.

Where red is green, the ball is not round and rules are not what they seem.

That’s how it feels right now with the twists and turns in the never-ending slugfest between SingTel and StarHub to lure eyeballs to their networks.

You could almost identify with Alice when she said to herself: “Dear, dear! How queer everything is today! And yesterday everything went on just as usual. I wonder if I’ve been changed in the night.”

How queer has it been in the pay-TV landscape?

Take the curious case of the set-top box through which the cable operators send their content to your home.

When it was announced in 2009 that the authorities were looking at introducing a common box so subscribers of either telco need not put up with two boxes, everyone cheered.

It seemed like a no-brainer. If a mobile phone could work with either SingTel or StarHub, why not a cable set-top box?

The case was further strengthened with the building of a national broadband network using the latest fibre-optic technology which would be the superhighway for all digital content, including TV programmes.

The network is now completed but, alas, there is no universal box.

The Infocomm Development Authority (IDA) cited commercial and technical difficulties, including “billing across operators, interoperability and common technical standards”, and said none of the bids it received could achieve the desired outcome. It declined to give further details, citing commercial sensitivity.

(In Wonderland, the Eaglet retorted: “Speak English! I don’t know the meaning of those half long words, and, what’s more, I don’t believe you do either.”)

So we have this unsatisfactory situation where IDA could move heaven and earth to build an islandwide digital network costing at least a billion dollars, digging up roads and pavements everywhere, and forcing developers to provide fibre-optic access to all new buildings, but it can’t get the telcos here to agree on a common set-top box for cable TV.

In Alice-speak, the universal box just followed the White Rabbit down a deep dark hole.

Then, there is the even more curious case of the cross-carriage rules.

When it was first mooted, it seemed like a neat way to prevent cable operators from obtaining exclusive content, such as football broadcast rights, and shutting out other operators.

That had created two problems. First, viewers had to subscribe to another operator with another set-top box if their existing operator didn’t have the programme they wanted to watch.

Second, it upped the ante in the bidding war for exclusive content, so much so that when SingTel wrested the rights to broadcast Barclays Premier League (BPL) matches from StarHub, it was reported to have paid $400 million for the three-year contract.

Naturally, subscribers ended up paying more.

Proponents of the cross-carriage rule believe that forcing the operator with exclusive content to share it with other operators would put a brake on escalating bid prices.

It sounded like a good solution until SingTel announced earlier this year that it had secured the rights to the next three years of BPL football, but that its deal was non-exclusive.

Foul! StarHub protested, making no headway in its own negotiations with the content providers.

Penalty! the Media Development Authority (MDA) ruled, after its investigations concluded that the SingTel deal was in fact exclusive as it was found to contain provisions that were anti-competitive.

It applied the cross-carriage rule and forced SingTel to share its BPL content with StarHub.

So non-exclusive is actually exclusive?

As Alice would say, it gets curiouser and curiouser.

SingTel has now offered some creative packaging which will bring the price down for those who sign up to watch BPL matches, but only if it’s bundled with more than 80 other channels. And only if you’re a new subscriber. It won’t apply if you already have an existing contract.

StarHub has since countered with its own rebates.

And so the game continues.

When The Straits Times asked readers what they thought of all this, many said they found the competing offers confusing. Some saw it as just another marketing ploy.

Most curious for many though is that both contending parties are government-linked companies which seemed intent on killing each other.

A reader posed this question in a letter to The Straits Times Forum Page, speaking for many: “Is there sufficient content and product segmentation to ensure that both StarHub and SingTel are not just blindly bidding up content prices just to increase their market share?… Singapore is too small a market to have two providers slugging it out at the expense – and to the detriment – of consumers.”

MDA’s response was hardly convincing, saying it would not interfere with the operators’ pricing or bundling strategies beyond ensuring their practices were not anti- competitive.

To be fair, the higher prices subscribers are paying now, especially for live BPL matches, are the result of a global trend with content providers upping their fees to broadcasters.

They would have done so even if there was just one operator here.

But it is also likely that the overly keen competition between the two telcos added even more froth to the mix.

Everyone ended up paying more, subscribers and operators.

The biggest tragedy for me though has been the almost complete absence of local content on cable TV except that produced by the state broadcaster, MediaCorp.

What Singapore subscribers get to watch here is no different from that anywhere else in the world, including, one presumes, Kuala Lumpur, Bangkok and Hong Kong.

It’s the same fare of news and entertainment shoved into every digital pipeline everywhere – BBC, CNN, Star Sports, Fox Sports, National Geographic, Disney and more.

So what value has SingTel and StarHub added that sets them apart from a hundred other operators round the world?

The one real value that any operator anywhere can add is developing local content not available elsewhere.

If only half the energy they devote to outbidding each other for foreign content was channelled to developing our own, we would have something unique to watch.

Alas, it looks like that too disappeared down another rabbit hole.

– See more at: http://news.asiaone.com/news/singapore/singtel-v-starhub-it-gets-curiouser-and-curiouser?nopaging=1#sthash.9nRajEop.dpuf

Posted in Articles and Speeches, Han Fook Kwang

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