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Why Starhub Gets to Overcharge For Euro 2012

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Ryan Ong

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Starhub just announced the price of the Euro 2012 package, and that price is “way too much”. You’d think that 20 years of televised football violence would put some fear into TV providers, but you know, parasites don’t have emotions. No, what we’re getting are absurd pricing policies, which Singaporeans have accepted as well as a case of genital warts. In this article, I examine the possible reasons behind Starhub’s fees, and what you can do about it:

 

So The Prices Are…?

About $70, if you aren’t an existing subscriber. This table has more details:

 

Early Bird (Between 27th March and 30th April)

After 30th April

Existing Subscriber

$58.85

$69.95

New Subscriber

$69.95

$80.25

*Prices include GST

 

Guy watching TV with a leg up
The average soccer fan, making an important contribution to the team’s victory.

 

If you remember 2008, the price for watching the same tournament was around $10-$20. Either inflation is about 100 times worse than the government believes, or this is the most extreme measure to curb football betting in Singapore history.

Whatever the reasons, Singapore’s football fans aren’t happy. In the interest of rescuing Starhub executives, who will shortly be tied up and exposed to non-stop recordings of 80’s rock ballads on Vuvuzela, we present possible excuses for Starhub:

 

1. Singtel Raised the Benchmark in 2010

When Singtel broadcast the World Cup in 2010, the price was between $70 – $94. Now, I know the World Cup makes for expensive content, but realize this: Singtel’s price was amongst the highest in the region. There was even a Facebook page to boycott Singtel, which was about as damaging as chucking a lychee at a T-Rex.

 

Playmobils on a world map
Singapore soccer fan: Cheered for Spain. Couldn’t find it on the map.

 

Singtel proved a point that year: Football fans will happily subsist on three week old leftovers if it means catching the game. Now, Starhub’s capitalizing on the fact. Singtel tested the waters for them with the World Cup, and now both providers have a better idea of viewers’ pain thresholds.

Like good capitalists, Starhub and Singtel are going to raise prices until customers revolt. Once the subscription rates drop (or the anthrax letters come through the mail), they’ll consider backing off.

 

2. Non-Disclosure of Starhub’s Costs

Starhub pays a fee to broadcast Euro 2012. If we had some idea of what that fee is, we could gauge the fairness of their price. But since Starhub hides this secret like the Burmese junta hides votes, we’ll make a logical assumption: Starhub pays very little for the broadcasting rights.

If we knew they were paying a pittance, they’d never get away with overcharging. But nothing obliges them to reveal the real cost, so they can keep using the “Broadcasting rights are so expensive” argument. Until TV providers are somehow obliged to reveal their costs, they can keep overcharging.

 

Business presentation
“Don’t think of it as overcharging. Think of it as deep respect for your financial competence.”

 

3. The Internet is Killing TV

Is Starhub unaware that some viewers will resort to live streaming? Not at all. In fact, they’re probably counting on it. I bet Starhub knows a percentage of viewers will go online; part of the high cost is to compensate for this lost revenue.

Too bad it triggers a domino effect: TV providers up their cost to make up for lost revenue, which in turn drives even more viewers to the Internet. But until viewers turn to the Internet in significant (read: disastrous for Starhub) numbers, Starhub can keep milking football fans for all they’re worth.

 

Woman with PC
“So in your day, you had to be home at a particular time to watch something? You’re what, 87?”

 

4. Riding on Mio TV’s Back

In 2010, the MDA introduced a law that prevents exclusivity. Whatever Starhub has the rights to, it must also offer to Singtel viewers.

Starhub’s response is business driven: If that’s the way it has to be, they may as well make money from it. Viewers with Mio TV are also be able to purchase Euro 2012. Since there are some 35,000 odd Mio TV viewers, Starhub has extended it’s reach; it may as well take advantage of that, by charging everything just short of internal organs for cross-carraige content.

 

Couch potato
Cable TV: Because Internet addiction is so unhealthy

 

5. Exclusivity and Lack of Competitiveness

MDA’s mandate was supposed to prevent monopolies, and encourage competitiveness. But we’re seeing something else that needs to be addressed: Without competition, TV providers have no inclination to undercut one another.

MDA’s mandate has prevented viewers from being cut off; content is now available to everyone. But without intensive competition, companies like Starhub don’t need to worry about pricing. If we don’t buy from them, who else will we turn to? Until measures are taken to correct that, Singaporeans will have to keep living with stunts like these.

 

Sleeping employee
“Of course TV was a competitive industry…back when the Flintstones was cutting edge CGI”.

 

Image Credits:
Sean MacEntee, Mr. Thomas, fdecomite, Victor 1558, Ed Yourdon, furryscaly, cell 105, Drabik Pany

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Ryan Ong

I was a freelance writer for over a decade, and covered topics from music to super-contagious foot diseases. I took this job because I believe financial news should be accessible and fun to read. Also, because the assignments don't involve shouting teenagers and debilitating plagues.