Category: StarHub
StarHub – BT
What’s next, StarHub, after EPL blow?
LAST weekend saw the 6-1 drubbing of English Premiership minnow Hull City by soccer giant Liverpool. In a cruel coincidence played out yesterday in the local telco scene, the Reds landed an equally crushing blow on its archrival in a match that could tilt the balance of power in Singapore’s pay-television landscape.
Singapore Telecommunications (SingTel) yesterday outbid StarHub to score the coveted rights to broadcast the next three seasons of the English Premier League (EPL).
The victory breaks StarHub’s stranglehold on the event for nearly a decade. To add salt to injury, SingTel also prised away ESPN Star Sports, and with it StarHub’s claim to a bonanza of other sporting events including Formula One, Wimbledon and the US Open Golf Championship.
Bruised egos aside, the more worrying concern for StarHub is that the double-whammy could spark a mass defection among its 530,000-strong cable television TV subscribers. Investors appear equally unsettled and StarHub shares paid the price by sliding 6.5 per cent to $2.03 yesterday.
For local sports fans, the EPL is often the swing vote when deciding on a pay-TV bundle. To make it a complete no-brainer, SingTel went all out to wrestle other major sporting events away from StarHub so sports fanatics will naturally choose to see red and not green. This was the case in Hong Kong when iCable parted with a large portion of its customer base after ceding EPL broadcast rights to PCCW in the last auction.
In Singapore, the outcome could be a 20 to 30 per cent migration of StarHub’s sports group customers, according to DBS Vickers analyst Sachin Mittal.
This estimate (a conservative one) would spell a sizeable reduction in StarHub’s pay-TV sales, a segment which accounts for 19 per cent of its total revenue. StarHub’s average revenue per pay-TV user of $56 will also be thinned significantly as a result. To add to the blow, some mobile and broadband customers could also be enticed to switch if SingTel comes up with attractive pricing bundles.
StarHub is well aware of the allure of the EPL and sports in general, which was why it was willing to consistently price this genre of content below their actual costs. SingTel was equally cognisant of the fact, which was why it was willing to pay a heavy price this time around after failing to do so in 2007.
The blow, as crushing as it is, will not be a fatal one on StarHub’s pay-TV business. The company still has a strong arsenal of other content including news channels, lifestyle and entertainment programmes. These include BBC, Discovery, AXN, and popular Hong Kong TVB drama series.
The immediate priority now is to delineate from its sports heritage and come up with compelling packages for its remaining channels. After all, Singaporeans are fickle and price-sensitive, so a good bargain should keep them tuned in. The only hassle for the consumer is to have two separate set-up boxes, but this should be an acceptable compromise if the price is right.
In addition, the EPL deadweight has now been passed on to its biggest rival. StarHub has never made money from screening the premier league, neither has PCCW, and SingTel is unlikely to break the jinx.
While StarHub’s cable TV sales may drop, its content acquisition costs should be correspondingly reduced. It can now focus on exploiting more profitable channels instead of using them to cross-subsidise loss-making ones.
Vengeance can also be exacted if StarHub reclaims the EPL rights the next time round as SingTel’s investments may not be recouped within a three-year time frame. If nothing else, it could exact vengeance by bidding aggressively to drive up the costs for SingTel.
A good company can build on its success but, more importantly, it should be able to swiftly recover from setbacks. With the arrival of former M1 chief executive Neil Montefiore next year, coupled with the continued guidance of CEO Terry Clontz as company director, StarHub should be able to prove its mettle.
SingTel, StarHub – BT
Fledgling mio stuns StarHub, bags EPL rights
Major coup for SingTel, which also gets ESPN to cross over
Singapore Telecommunications outbid StarHub to scoop up the exclusive broadcast rights for the next three seasons of the English Premier League (EPL). To complete its crushing victory, SingTel also managed to wipe out the bulk of StarHub’s sports programming by convincing anchor tenant ESPN Stars Sports to defect.
Singapore’s largest operator yesterday announced that it has won the sole right to screen EPL matches here across its mio TV, Internet and mobile platforms from 2010 to 2013.
The unexpected victory dispels previous speculation of a possible joint SingTel-StarHub bid to cap the escalating costs of scoring the world’s most-watched soccer league.
‘We looked at the joint bid scenario and decided it’s not ideal for Singaporeans. Some matches will have to be split,’ said SingTel Singapore CEO Allen Lew.
‘We see this (EPL) as game changing for mio TV. There are significant (subscriber) numbers that we can expect from this,’ he told reporters at a media briefing yesterday.
Incumbent StarHub was widely-tipped by market watchers to retain its EPL crown, the star attraction of its sports content line-up for more than half a decade. Its CEO Terry Clontz was equally confident of landing another victory ahead of the recent auction for the 2010-2013 campaign.
‘We should be able to retain the rights. If we don’t, I may have to opt for an early retirement,’ he said during the operator’s second-quarter results teleconference in August. When the hammer eventually fell last night, SingTel won with the higher bid.
‘While we are committed to offering quality sports content, we are mindful of the balance in meeting consumers’ expectations with regard to price, and shareholders’ expectations in terms of profits. Presently our sports package is priced below the cost of the content that makes up that package,’ StarHub’s head of content Kathleen Syron said in a statement after SingTel’s EPL announcement.
‘Our bid for EPL was aggressive, but also made with the intent to hold retail prices stable,’ she added.
SingTel declined to reveal the price it will be paying for the coveted football league but BT understands the cost could be between $150 million and $300 million and not the $400 million predicted by some market analysts.
‘This is definitely a very big shakeup for both SingTel and StarHub,’ said OCBC research analyst Carey Wong.
‘We believe that SingTel’s EPL bid price was so attractive that Premier League decided to award the EPL rights in the first round itself rather than proceeding to the second round,’ DBS Vickers analyst Sachin Mittal added.
‘We can fund this from our cash flows. It’s not as high as some people think,’ Mr Lew said, adding that pricing details for the EPL will only be announced ahead of next season’s kick-off in August 2010.
‘But I can confirm that Singaporeans will not be charged more than what they are paying today on cable TV,’ he stressed.
StarHub customers currently pay around $52 for their football fix. This includes monthly subscription to the firm’s basic tier, as well as the $26.75 it charges for a group of sports offerings which include Football Channel (for screening live EPL games), SuperSports, ESPN and Star Sports.
Besides losing its EPL rights yesterday, StarHub was dealt a second blow as the claim to three of these sports channels has also gone to rival SingTel.
This is the result of an exclusive, three-year content deal between SingTel and ESPN Star Sports.
A total of seven ESPN channels will make their debut on SingTel’s mio TV service progressively over the coming year. These include three that are currently on StarHub – ESPN, Star Sports and Star Cricket – and a new channel called ESPNews.
With the ESPN pact, SingTel will lay claim to additional sporting events including the Formula One, the Australian Open, Wimbledon and the US Open Golf Championship on top of its EPL, UEFA Champions League and Italian Serie A soccer programming.
‘Content is key. We decided that sports will be the content that we would brand ourselves with,’ SingTel’s Mr Lew explained.
SingTel shares rose five cents yesterday to close at $3.27, while StarHub slumped 14 cents to close at $2.03.
SingTel – BT
Will SingTel keep its word on not charging consumers more?
BARELY 60 hours after telco giants StarHub and SingTel braced themselves for battle, it was the latter that had its arm raised as it secured the prized exclusive rights to air English Premier League matches from next August.
Many football fans were caught off-guard by the speedy conclusion of the bidding war as SingTel announced its victory early yesterday morning. Up until then, the possibility of an alliance between the two rivals was still being discussed. Fans were also busy weighing their options should one or the other, or even both, win the bid to screen ‘live’ games from the world’s most popular football league for the next three seasons.
As the dust settles, to say that many are finding themselves in a tricky spot is an understatement. Signing up with both telcos would be the most ideal as it would give the complete package of all the different sports and other channels as well, but at what cost to the wallet?
Bear this in mind, though: SingTel also surprisingly announced that it had bagged the ESPN Star Sports channels, which include other key offerings such as the FA Cup, Formula One, the Australian Open, Wimbledon and the US Open Golf Championship.
The message from SingTel is clear: From next year, everyone who wants to watch the vast majority of sports will have to sign up for mioTV.
Perhaps crucially, SingTel chief executive Allan Lew promised in a statement yesterday that consumers would not be charged ‘more than what they are currently paying to their cable TV operator’, while still enjoying the convenience of SingTel’s integrated mobile, Internet and mioTV platform.
But there are many other factors to consider before one chooses to jump ship. First, there is the group who has only just signed a fresh two-year contract with StarHub primarily because of the sports channels. They now face the prospect of being football-less next year unless they sign up with SingTel too, as they are unable to break their StarHub contract due to hefty penalties.
There is another catch. Those who want to subscribe to mioTV must have a SingTel fixed line installed in their home. This would be a problem for those who have terminated their lines in recent years, preferring to use their mobile phones to communicate instead. Subscribing to a fresh fixed line for the sake of mioTV would mean paying extra for installation and monthly charges.
While SingTel claims that it has 95 per cent of residential areas covered already, it has to work faster in wiring up the rest of the country – including pubs and coffeeshops and other nightspots – to win over as many customers as possible.
Currently, the estate where I live in in the West is not mioTV-ready yet, which means I can’t even enjoy the Champions League this season. The only way to catch the games is on my computer via SingTel’s Football Frenzy offering, which would cost $156 a year.
Netizens, meanwhile, are all abuzz at the revelation that they might have to subscribe to both pay-TV operators. Forgoing StarHub would mean not being able to watch news channels such as BBC or CNN, entertainment stations such as Star World or AXN and premium movie channels such as HBO.
Clearly, SingTel is now putting all its eggs in one basket and banking on sports to win over a still-sceptical public. All eyes will now be on whether it remains true to its word that consumers won’t have to pay more to watch sports than what they are currently forking out now.
SingTel, StarHub – CNA
SingTel wins rights to BPL, ESPN STAR Sports
Singapore Telecommunications Ltd (SingTel) announced it has won the rights to air Barclays Premier League (BPL) matches across its platforms, as well as exclusive broadcast rights to ESPN STAR Sports for mio TV.
In a statement released Thursday, SingTel said the rights would allow it to broadcast BPL matches on mio TV, the Internet and mobile applications for three years starting August 2010.
SingTel said it has also secured rights to a suite of sports networks and services from ESPN STAR Sports (ESS) for its mio TV customers. ESPNEWS, a brand new 24-hours sports news channel, is slated to be broadcast on mio TV from next month.
SingTel, StarHub – BT
Are SingTel, StarHub teaming up for EPL bid?
Both kept mum whether their bids are solo or joint
Singapore Telecommunications and StarHub have both tossed their hats into the ring for the English Premier League (EPL) broadcast rights. But the silence surrounding the nature of their bids could mean that the bitter rivals could turn from foes to allies this time around.
The two companies yesterday confirmed that they have submitted bids for the next three seasons of the EPL, the crown jewel in StarHub’s sports programming line-up. However, both telcos kept mum when asked if they were going solo or opting for a joint assault.
Their silence adds to recent speculation that the rivals could launch a joint EPL bid to reduce the heavy price that has to be paid for the world’s most-watched soccer league from 2010 to 2013.
Besides the two telcos, ESPN Star Sports is also expected to be involved in this contest.
StarHub forked out an estimated $250 million in 2007 for its three-year EPL screening rights, a four-fold increase from what it previously paid.
With its growing popularity, market watchers expect EPL rights to soar even higher, prompting concerns that the sky-high costs could eventually be passed on to consumers.
Investment research firm CIMB pegged the figure at $400 million, nearly six times higher than the price ESPN Star Sports paid for the 2004 to 2006 campaign.
To cap escalating content costs, Deutsche Bank’s research arm subsequently said that a joint bid between SingTel and StarHub was becoming ‘increasingly likely’.
The Programme Advisory Committee for English Programmes – a body appointed by the Minister for Information, Communication and the Arts in 2007 to give feedback on English broadcast programming – also urged the two pay-TV operators to join hands in the interest of local viewers.
Fanning the speculation even further, officials from the Football Association Premier League have also clarified that they have always allowed joint bids from Singapore.
In the United Kingdom, the broadcast rights are typically in the hands of a few players. For example, ESPN currently owns two of the six EPL groups while Sky Sports has a claim on the remaining four.
However, Kim Eng research analyst Gregory Yap believes that a dream partnership between SingTel and StarHub is an unlikely outcome.
‘. . . SingTel and StarHub are fiercely-competitive and are unlikely to agree,’ he said in a client note on Monday.
‘If anything, SingTel is more likely to bid aggressively even if it does not win just to spoil the show for StarHub,’ Mr Yap added.
This would mirror the scenario in 2007, where SingTel went head-to-head with StarHub and ESPN Star Sports.
Singapore’s largest operator was then hoping to score a star attraction ahead of the launch of its Mio TV service.