Sunday, July 12, 2009

MDA, brainless and spineless?

My father and I are soccer fans, but we had not been subscribing to any cable football channel for many years now, because I refuse to pay the exorbitant and endlessly increasing subscription fees. But I do not blame StarHub. I blame MDA.

Why? I dont have the exact figures, but going by the quoted fees for the exclusive rights to the Barclays Premier League (BPL), divided by the subscription fees, by my guesstimate, is a very large proportion of StarHub's total subscribers. In other words, to secure the exclusive rights, StarHub is bidding near breakeven level. In other other words, dear football subscribers, even though it is costly, StarHub is really not making much money from you. In all likelihood, non-BPL football viewers are probably subsidising the BPL football viewers.

Anybody who knows some introductory economics would know that in a state of perfect free competition, the profit goes to zero. The stakes of cable tv in Singapore is higher. Most StarHub cableTV subscribers are in it for BPL and BPL alone. If Singtel beats StarHub to the BPL exclusive rights, StarHub CableTV will cease to be a viable entity with collateral damage to StarHub's commoditized businesses in mobile, IDD and broadband business. Therefore, Singtel will always try to force StarHub to bid at their threshold of pain, but let StarHub win it. That way, StarHub will continue to operate a profitless business that will continue to drain StarHub's ability to expand aggressively in other businesses. Notice you still cannot buy the iPhone from StarHub, despite suggestions that it would be available, late LAST year. And soccer fans will direct all their hate at StarHub. Wonderful win, win situation for Singtel.

It was not too long ago when soccer fans can watch free, live matches on free-to-air channel, SportsCity. But now that the football clubs are demanding more TV money, we know that this advertising supported will not work any more. But a large part of the subscription costs now is due to the bidding war between Singtel and StarHub, and it has been going on for years. What has MDA done all these years, other than sitting on their hands? Nothing much, except endless talk about how MDA is observing the situation. Oh, and finally, they "commissioned" some consultants to study the "competition issues". What kind of regulator needs third party "consultants" to tell them what they should do? They ought to be the experts and they should take the lead, instead of passing the buck to the consultants to whom blame can be shifted if things go wrong. If they want to act like taichi bureaucrats, then they should be paid like taichi bureaucrats, instead of acting and benefiting like they are some private sector employees with nice titles like CEO and matching perks.

So enough panning, here's my constructive suggestions:

1) Ban Singtel from bidding for football rights. Singtel wants to build their mioTV business, and is able to use their sheer size to directly and indirectly subsidize their BPL bid. Barring them will take the heat off StarHub and give them room to negotiate.

2) Stop pretending StarHub and Singtel are not Singapore state owned enterprises. Pretending to compete when it comes to overseas contracts only hurts the Singapore market. MDA as the regulator should knock their bloody heads together if they cannot learn to work together for the interests of Singapore. The very least MDA could do, is to make the telcos pledge not to bid for exclusive rights. Better yet, let ESPN win the rights and run the shows, and work out some deal beneficial for mutual survival, eg Manchester United exclusivity for StarHub and Liverpool exclusivity for Singtel, except when the two teams play against each other.

3) Give up trying to nurture the S-League. mioTV dropped in my lap and I had access to Italian Serie A for free. The match I skimmed through, was the one that featured David Beckham. Forcing people to watch S League, which is not even close to being second best by entertainment values, by intentionally making BPL watching expensive will not work.

MDA studying competition issues

I THANK Mr Tan Chak Lim for his letter on Monday, ''Managed' football telecast rights benefit consumers, content providers', and Mr Lim Phei Kiat for his letter on Wednesday, 'Subscribers paying too much for pay TV football'.

We note football viewers' concerns on higher subscription costs and having to subscribe to both SingTel and StarHub for different sports content.

Thus, late last year, we commissioned a study on competition issues in convergent media and telecoms markets. Both SingTel and StarHub were among the industry players interviewed by the appointed consultants in the course of the study.

The issues are multifaceted and include commercial agreements for broadcast of sports events, foreign content owners' rights, and Singapore's obligations to abide by international conventions that protect such rights.

We are pleased to update that this study is ongoing and various options are being explored. The Media Development Authority seeks the patience and understanding of TV viewers, and will update the public on the results of the review at an appropriate juncture.

Eileen Ang (Ms)
Head (Competition & Market Access)
Development Policy
Media Development Authority

No comments:

Post a Comment