Commentary: Singapore viewers to pay S$58 for Euro 2012, in first “cross carriage” deal

Commentary: Singapore viewers to pay S$58 for Euro 2012, in first “cross carriage” dealEuro 2012

“Same old expensive price” was probably the first thing that struck many Singapore football fans when they heard today that StarHub is charging S$58 to watch live Euro 2012 matches in June.

The price, for early birds only, is only slightly less than the other football bonanza just two years ago – the World Cup. Back then, pay-TV viewers had to pay S$66 to get the live matches, prompting much unhappiness.

But this time, things may be a little different. And they could have a huge bearing on how expensive sports progammes will be in future.

For Euro 2012, viewers will be able to watch the matches without being tied to a StarHub contract. This includes SingTel mio TV subscribers who can now watch the matches through their existing set-top boxes. They will pay StarHub separately but the content will be piped through SingTel’s network without having them fuss over a new set-top box.

This is the first time this is happening because of a “cross carriage” ruling that the government regulator had hammered into place after the World Cup bidding fiasco in 2010. 

That year, Singapore almost became only a handful of countries that did not have the World Cup on TV because both SingTel and StarHub baulked at the asking price for exclusive broadcast rights. In the end, a lower joint bid was pushed through and subscribers of both operators could watch the matches on their own set-top boxes.

Today, the cross carriage arrangement means that any pay-TV operator here (with more than 10,000 subscribers ) may carry the content over its network, as long as their subscribers ask for it.

This solves a number of problems. Viewers don’t have to be “stuck” to one pay-TV operator because it has exclusive rights to some content, and they don’t have to add a second set-top box just to watch the exclusive content.

In the larger context, this means he is free to swap pay-TV operators because there is no exclusive content that forces him to stay with one operator. In the past, the problem was that telcos would bid in the hundreds of millions of dollars for exclusive programmes like live football to lock in a user, so they can later up-sell more profitable broadband and mobile services to him.

The market has also changed substantially since a few years ago. Today, the margins for broadband are thinning in Singapore, thanks to the intense competition in fibre broadband, and mobile services are not the same sure-fire hits they once were because of the rising costs of providing for the explosion in mobile broadband usage.

All this means that telcos may not have the stomach for the crazy bidding wars that occurred with previous pay-TV deals involving expensive rights . They now have to bid with an intention to make money from the broadcast deal alone.

Indeed, the Euro 2012 broadcast in Singapore offers a preview of what may come when the broadcast rights for the Barclays Premier League (BPL) go up for bidding in the next few months.

Will StarHub or SingTel go all out in their bids, as they did three years ago, to the dismay of football fans? Or will there be a more measured approach, so that the costs are not all passed on to consumers, and so that rights owners do not view Singapore fans as suckers who can afford to pay a lot more than those from other countries?

The takeup for Euro 2012 could well determine that. If StarHub, which by the way, collects all the receipts for broadcasting, including those from rival telcos’ subscribers, finds that there is a propensity to pay, then it could well throw in a hefty bid for the BPL and raise prices. SingTel could do the same, of course, to secure its profits from BPL screenings.

But gone are the days when having exclusive BPL rights translates to pay-TV sign-ons which can then be easily turned into customers of their “triple play” bundle that includes broadband and mobile services.

What the new rules mean is that things are a lot more de-coupled now, and users have a choice to buy services a la carte without losing out. Telcos and indeed their foreign content partners, many of whom were against Singapore’s new rules, may also be less willing to pursue exclusive deals that keep out rather than reach a larger audience.

As the Media Development Authority would happily point out, there are more common channels showing on both SingTel and StarHub now. In 2010, there were only seven of them, mostly foreign public service channels, but today, this number has more than doubled, with the likes of ONE and Celestial Movies showing on both the big pay-TV players in the country.

So, after the last World Cup, competition in pay-TV does appear to be a little less ruinous than before, when the wrong type of contest between SingTel and StarHub often resulted in users paying more and being inconvenienced each time exclusive rights are up for grabs.

That said, there are things that can still be improved. MDA should scrutinise the “activation” charge that an operator can levy on a user for tuning in to its content. The idea of cross carriage, after all, is that prices should be uniform across all operators.

For Euro 2012, StarHub is charging S$10 for SingTel users to sign up. It’s fair to charge for the additional work involved in turning on the channel for non-subscribers, but the price needs some scrutiny. That $10 for a $58 package is close to 20 per cent of the overall one-off price, which is substantial.

Commentary: Singapore viewers to pay S$58 for Euro 2012, in first “cross carriage” dealEuro 2012 price

Could MDA specify the turn-on fee to be a percentage, say, no more than 10 per cent, of what users pay? This could be 10 per cent of the total package, in one-off sports events like Euro 2012 (and perhaps others like the Grand Slams in tennis), or could be 10 per cent of the first month’s subscription in the case of the nine-month long BPL season.

To be fair, the current deal does not go as far as, say, a wholesale agreement, where each pay-TV operator will have the rights to broadcast and collect their own revenues from them. As things stand, there is still a possibility that the exclusive rights owner could charge an exorbitant price because it still controls the rights to the content.

Yet, the current regime is a modest step forward from the bad situation of a few years ago. There is no guarantee it will immediately mean cheaper sports programmes – the rising salaries of footballers like Wayne Rooney, for example, have to come from somewhere – but at least telcos will think twice before bidding up and passing on the costs to consumers.

And hopefully too, by now, the rights owners from Uefa in Europe or the Football Association Premier League (FAPL) in England will not assume that viewers here are always ready to empty their wallets for a bit of Rooney magic. Fans are prepared to walk away , as the World Cup episode showed.

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