Some of the grumbling from SingTel in the past two days has been rather astonishing.
Right after being told to share its Barclays Premier League screenings with StarHub, it threatened to raise prices for football fans next season. It took things further yesterday, saying it might not be bidding for World Cup rights in 2014.
To which football fans should say “thank you”. Let someone else bid lower so viewers don’t have to pay so much.
Now, SingTel has a right to do what it wants in a free market. What’s strange is how it wants to convince football fans that it’s a victim of a refereeing error.
First, this so-called cross carriage rule has been in place since 2011. Just last year, StarHub won the Euro 2012 rights and screened the matches on SingTel’s mio TV without complaint. In fact, StarHub made a tidy sum from that, because SingTel viewers also paid it to watch the matches.
SingTel has much to gain by showing its matches on StarHub. It gets paid by more viewers, can charge more for sponsorship and it can even upsell SingTel services to them – right on a StarHub box.
Arguably, SingTel has benefited more from the cross carriage rule. Last year, it managed to grab hold of several important channels, such as National Geographic, when the exclusive deals with StarHub ended.
With that, SingTel’s mio TV looks more than just a box for football. By catering to the nature lover as well as the Manchester United fan, it has since signed up more subscribers, while StarHub faced its first sharp decline in the 20 years it ran a pay-TV service.
SingTel surely hasn’t helped its case with the wheeling and dealing that went on in the latest battle for TV rights. By trying to short-circuit the process, it left the Media Development Authority with little choice but to rule against it.
The real reason why SingTel is unhappy is because it cannot now lock in viewers and sell its more profitable mobile and broadband services to them. Those services are what have been “subsidising” costly TV rights, and even they are under pressure from slimmer margins.
SingTel is said to have paid about US$200 million for the rights, much less than the estimated US$400 million in the previous round.
Why can’t it lower prices? That’s possible, but only if it can make more money elsewhere. Don’t forget SingTel has had to pay millions too – S$150 million in the latest round – to upgrade its mobile network to cater to higher usage.
That’s what’s upsetting for the red team. In all honesty, it can’t be bothered with “guaranteeing” football fans some football action in Singapore, if that didn’t bring in the money.
SingTel’s CEO for its Digital Life unit, Allen Lew, had told Today: “I’ve got more important things to do in life than to make appeals and continually have discussions with regulators. The World Cup will happen, and if Singapore’s not part of it, good luck!”
Actually, SingTel’s the one who needs the luck. It will now have to consider how to recoup its investment in the BPL screenings. As for the World Cup, be very surprised if SingTel doesn’t cash in on the most-watched sporting event.
To be fair, what the red team is doing is not new. Previously, the folks in green had carried out the same aggressive lobbying, by placing ads in the national papers to pressure SingTel to share its screenings after it lost its bid.
Football fans should be familiar with such on-field antics. By arguing with the referee, each hopes to win a penalty, avoid a card or claim a dubious goal. Eventually, the match has to be settled one way or other.
For now, the ref seems to have made the right call. In the long run, viewers will be better off if pay-TV players don’t bid so highly for exclusive content and pass on the cost. That’s what the cross carriage rule is for.
For the football fan, the decision probably comes down to price. If it goes up a lot more than the S$34.90 a month now, as SingTel is hinting, maybe it’s time to tune off.
Voting with one’s wallet has been the oldest way to protest in a free market, and surely, football is not something one can’t live without on weekends.
Clarification: We had earlier said that SingTel had paid S$200 million for the Barclays Premier League rights for the next three seasons. A closer estimate, we’ve been told, is US$200 million (US dollars instead of Singapore dollars).