StarHub’s Euro 2012 victory not a nailbiter: analysts

No real impact seen, in reducing SingTel’s subscriber base nor in raising StarHub’s

Even with StarHub’s exclusive rights to the UEFA Euro 2012 in the bag, not much will change the tug-of-war for subscribers between it and SingTel, analysts reckon.

‘Overall, we do not expect the latest development to have a huge impact on SingTel’s subscriber base nor will it aggressively increase StarHub’s subscriber base,’ said OCBC’s Carey Wong in a note yesterday.

As at end-September, StarHub had 542,000 residential pay-TV customers, while SingTel’s mio TV had 335,000 customers.

While StarHub has exclusive rights to air Euro 2012, Singapore’s relatively new cross-carriage law will make it compulsory for StarHub to offer the matches to mio TV viewers who ask for them, at the same price.

While football fans might have plenty to cheer when the tournament runs from early June to early July next year, analysts have greeted the news with a yawn.

‘The impact on StarHub’s earnings should be minimal in either direction,’ said DBS Group Research’s Sachin Mittal in a report yesterday.

CIMB Research analysts Simeon Koh and Kelvin Goh noted that StarHub’s subscriber base rose only 0.6 per cent quarter-on- quarter during the Euro 2008 quarter.

For Euro 2008, in which StarHub was an exclusive broadcaster – ‘exclusive’ in a much stricter sense of the word, pre-cross-carriage law – its sports package customers paid $10-20 to watch the matches, while those not subscribing to StarHub’s sports package paid $50. Rates for Euro 2012 will be announced only next year.

Just how much Euro 2012 is costing StarHub and what viewers will in turn have to pay is something that analysts are divided on, compounded by how the usual bidding process might have been replaced with a negotiated deal this time around.

CIMB’s Messrs Koh and Goh ‘are not overly excited given that the broadcast rights may be very costly; and this one-month event may not give StarHub sufficient firepower to claw long-term market share’, they said in the report.

DBS’s Mr Mittal, however, believes otherwise. ‘This is not the most popular piece of content, and there was an absence of bidding. As such, we assume that content cost should not be a big burden for Star- Hub. SingTel appears to have stayed away as they paid a huge price tag for English Premier League (EPL) rights,’ he said.

Even if cost isn’t an issue for StarHub, the same cannot be assumed for mio TV viewers. ‘While cross- carriage regulation may help mio TV subscribers to watch these matches this time around, they could end up paying more, in our view. Consumers can subscribe directly to StarHub (with or without the sports package) rather than going through SingTel’s mio TV to enjoy savings through bundling discounts,’ Mr Mittal added.

In 2010, SingTel wrested a three-year deal to air the Barclays Premier League (BPL) matches from StarHub in a triumph of bidding, but reportedly paid $300 million for it.

Even StarHub’s decision to go solo in gaining exclusive rights to Euro 2012 has given some analysts pause. OCBC’s Mr Wong said: ‘We are quite surprised by the move, as a joint bid – as in the case of the recent World Cup 2010 – would make more sense, both economically and logistically.’

StarHub’s counter closed 9 cents, or 3.1 per cent, lower at $2.82 yesterday, while SingTel’s fell 6 cents, or 1.9 per cent, to $3.06.

Do exclusive content rights matter?

What’s new?

StarHub has clinched the exclusive rights for the UEFA Euro 2012 football tournament. This would trigger Singapore’s cross-carriage law for the first time since it took effect in August 2011. It is reported that these rights were negotiated mutually and there was no bidding process.

Our view

The impact on StarHub’s earnings should be minimal in either direction. This is not the most popular piece of content and there was absence of bidding. As such we assume that content-cost should not be a big burden for StarHub. SingTel appears to have stayed away as they paid a huge price tag for English Premier League (EPL) rights, leaving less headroom to pay for more content in our view.

Cross-carriage regulation does not address the bundling issue. In 2008, StarHub’s sports package customers paid S$10-S$20 to sign up while those not subscribing to StarHub’s sports package paid S$50. While cross-carriage regulation may help mio TV subscribers to watch these matches this time around, they could end up paying more in our view. Consumers can subscribe directly to StarHub (with or without sports package) rather than going through SingTel’s mio TV to enjoy savings through bundling discounts. In either case, StarHub would take care of billing the customers for UEFA Euro matches and will have a chance to re-engage them through promotions.

We prefer StarHub & SingTel over M1. We continue to like StarHub for its 7% yield. We also like SingTel for over 5% yield, slow migration to National Broadband Network (NBN) and growth prospects from emerging markets. M1 is least preferred due to slow progress on NBN and use of fair value accounting for smart phones.

Maintain BUY on StarHub with TP S$3.05.

Do exclusive content rights matter?

What’s new?

StarHub has clinched the exclusive rights for the UEFA Euro 2012 football tournament. This would trigger Singapore’s cross-carriage law for the first time since it took effect in August 2011. It is reported that these rights were negotiated mutually and there was no bidding process.

Our view

The impact on StarHub’s earnings should be minimal in either direction. This is not the most popular piece of content and there was absence of bidding. As such we assume that content-cost should not be a big burden for StarHub. SingTel appears to have stayed away as they paid a huge price tag for English Premier League (EPL) rights, leaving less headroom to pay for more content in our view.

Cross-carriage regulation does not address the bundling issue. In 2008, StarHub’s sports package customers paid S$10-S$20 to sign up while those not subscribing to StarHub’s sports package paid S$50. While cross-carriage regulation may help mio TV subscribers to watch these matches this time around, they could end up paying more in our view. Consumers can subscribe directly to StarHub (with or without sports package) rather than going through SingTel’s mio TV to enjoy savings through bundling discounts. In either case, StarHub would take care of billing the customers for UEFA Euro matches and will have a chance to re-engage them through promotions.

We prefer StarHub & SingTel over M1. We continue to like StarHub for its 7% yield. We also like SingTel for over 5% yield, slow migration to National Broadband Network (NBN) and growth prospects from emerging markets. M1 is least preferred due to slow progress on NBN and use of fair value accounting for smart phones.

Maintain BUY on StarHub with TP S$3.05.

StarHub scores Uefa for both teams’ viewers

It wins broadcast rights; mio viewers will not be denied

StarHub has clinched the exclusive broadcast rights for the Uefa Euro 2012 football tournament, in what will almost certainly trigger Singapore’s cross-carriage law for the first time since it took effect in August.

The football championship, jointly hosted by Poland and Ukraine, will kick off on June 8, 2012 and end on July 2, 2012, Singapore time.

StarHub said that it will announce subscription rates for the tournament next year. In 2008, customers of its Digital Cable Sports Group who signed up early paid $10 or $20 for signing up later. Customers without a Sports Group subscription paid $50.

This time around, SingTel’s mio TV subscribers will be able to watch the action on the pitch for the same price as StarHub viewers if they want to, thanks to the cross-carriage law. Under this new mandate, StarHub has to make the matches available to its competitors’ subscribers within five days of a viewer’s request.

This law only applies to exclusive content acquired on or after March 12, 2010.

‘We note StarHub’s acquisition of the Euro 2012 rights and look forward to StarHub announcing more details…Football fans already have a lot of choice on mio TV – however, if the content is offered to us, we would welcome the opportunity to enhance our customers enjoyment of this major event,’ a SingTel spokesperson said.

While SingTel did not say if it had made play for the Euro 2012 rights, BT understands that they were in negotiations with the rights sellers at one point.

While analysts had widely expected StarHub and SingTel to submit a joint bid just as they had with the last Fifa World Cup, StarHub’s decision to go solo has its rewards. BT understands that there was no bidding process this time around, but rather a negotiated deal.

One way this could play out for SingTel mio TV subscribers who opt to watch the Euro 2012 is that they could subscribe directly to StarHub for the content, while still being mio subscribers, industry observers said.

The subscription revenue will go directly to StarHub. What is more, the game has to be aired in its original form, bearing StarHub’s branding and commercials. StarHub, however, would be expected to reimburse SingTel for the carrying cost incurred, as part of a possible outcome, BT understands.

While the cost of the rights remain unknown, analysts agree that if another operator had joined StarHub in the fray, the final price could have been driven up.

‘If it had been a competitive process, then I’m sure it would have been higher,’ said Gregory Yap, analyst with Kim Eng Research.

On top of that, Uefa expects Euro 2012 to earn 1.3 billion euros (S$2.26 billion), more than 840 million euros of which will come from media rights.

The MDA had mooted the cross-carriage mandate after a StarHub-SingTel bidding war broke out over the Barclay’s Premier League (BPL) broadcast rights in 2010.

While SingTel’s BPL coup helped to swell its subscriber ranks from 155,000 to about 200,000 in less than a year, it was said to have more than paid the price – a reported $300 million for the BPL rights.

While consumers will not be torn between set-top boxes for football action, it remains to be seen just how much the cross-carriage law has kept bidding ardour low and consequently, content price contained.

Foong King Yew, research director at Gartner, reckons that it is too early to tell how cross-carriage will change bidding behaviour.

‘I suspect that it’d depend on the type of content. Sports content is highly desirable because there’s a big following here. The incentive to go for an exclusive agreement is definitely much stronger compared to some other sort of content,’ he said.

The Uefa deal has been sealed late in Singapore, relative to its neighbours. Thailand’s GMM Grammy was awarded exclusive rights in April, while Malaysia’s Astro had the deal in the bag since last year.

StarHub scores Uefa for both teams’ viewers

It wins broadcast rights; mio viewers will not be denied

StarHub has clinched the exclusive broadcast rights for the Uefa Euro 2012 football tournament, in what will almost certainly trigger Singapore’s cross-carriage law for the first time since it took effect in August.

The football championship, jointly hosted by Poland and Ukraine, will kick off on June 8, 2012 and end on July 2, 2012, Singapore time.

StarHub said that it will announce subscription rates for the tournament next year. In 2008, customers of its Digital Cable Sports Group who signed up early paid $10 or $20 for signing up later. Customers without a Sports Group subscription paid $50.

This time around, SingTel’s mio TV subscribers will be able to watch the action on the pitch for the same price as StarHub viewers if they want to, thanks to the cross-carriage law. Under this new mandate, StarHub has to make the matches available to its competitors’ subscribers within five days of a viewer’s request.

This law only applies to exclusive content acquired on or after March 12, 2010.

‘We note StarHub’s acquisition of the Euro 2012 rights and look forward to StarHub announcing more details…Football fans already have a lot of choice on mio TV – however, if the content is offered to us, we would welcome the opportunity to enhance our customers enjoyment of this major event,’ a SingTel spokesperson said.

While SingTel did not say if it had made play for the Euro 2012 rights, BT understands that they were in negotiations with the rights sellers at one point.

While analysts had widely expected StarHub and SingTel to submit a joint bid just as they had with the last Fifa World Cup, StarHub’s decision to go solo has its rewards. BT understands that there was no bidding process this time around, but rather a negotiated deal.

One way this could play out for SingTel mio TV subscribers who opt to watch the Euro 2012 is that they could subscribe directly to StarHub for the content, while still being mio subscribers, industry observers said.

The subscription revenue will go directly to StarHub. What is more, the game has to be aired in its original form, bearing StarHub’s branding and commercials. StarHub, however, would be expected to reimburse SingTel for the carrying cost incurred, as part of a possible outcome, BT understands.

While the cost of the rights remain unknown, analysts agree that if another operator had joined StarHub in the fray, the final price could have been driven up.

‘If it had been a competitive process, then I’m sure it would have been higher,’ said Gregory Yap, analyst with Kim Eng Research.

On top of that, Uefa expects Euro 2012 to earn 1.3 billion euros (S$2.26 billion), more than 840 million euros of which will come from media rights.

The MDA had mooted the cross-carriage mandate after a StarHub-SingTel bidding war broke out over the Barclay’s Premier League (BPL) broadcast rights in 2010.

While SingTel’s BPL coup helped to swell its subscriber ranks from 155,000 to about 200,000 in less than a year, it was said to have more than paid the price – a reported $300 million for the BPL rights.

While consumers will not be torn between set-top boxes for football action, it remains to be seen just how much the cross-carriage law has kept bidding ardour low and consequently, content price contained.

Foong King Yew, research director at Gartner, reckons that it is too early to tell how cross-carriage will change bidding behaviour.

‘I suspect that it’d depend on the type of content. Sports content is highly desirable because there’s a big following here. The incentive to go for an exclusive agreement is definitely much stronger compared to some other sort of content,’ he said.

The Uefa deal has been sealed late in Singapore, relative to its neighbours. Thailand’s GMM Grammy was awarded exclusive rights in April, while Malaysia’s Astro had the deal in the bag since last year.