Published November 3, 2009

Just move on, StarHub

By WINSTON CHAI

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DESPERATE times call for desperate measures, so the saying goes. And when one has to turn to one's rival for balm, that must surely signal that the situation is as dire as it gets.

Up against a wall: Rather than moping over the BPL loss, StarHub should concede that the sports battle is lost and move on quickly to reposition itself with its other exclusive pay-TV content

StarHub may have done just that when it extended an olive branch to Singapore Telecommunications to carry the latter's pay-television content on its cable platform for free.

On the surface, the suggestion - unheard of in the pay TV industry - appears to be a rare case of business altruism. StarHub's 500,000 cable television customers can be spared the hassle of having two set top boxes when the new BPL (Barclays Premier League) kicks off next August.

Rival SingTel also stands to gain as it could save millions by tapping StarHub's infrastructure to reach consumers and businesses instead of investing in its own wiring.

To make the deal even sweeter, customers will pay SingTel for their BPL subscriptions, even though the channel is delivered via StarHub's cable television set-up. After all, the argument is that StarHub has already been doing the same for free-to-air channels such as MediaCorp 5 and 8.

It would seem that the complaints of long-suffering football fans have finally been heard and, short of any government intervention, an interim win-win work-around has now been found. However, if you peel the bark off the StarHub olive branch, it is quite clear that damage-control is the true self-serving intent.

The BPL has always been the crown jewel of StarHub's sports line-up and its latest offer to SingTel seems like a veiled attempt to cling on to this prized trophy.

StarHub's mooted approach will indeed save consumers the inconvenience of owning two pay TV boxes.

What is left unsaid is that it will also help stem the exodus among its current cable television base. This is because StarHub customers who want to watch the BPL will be more inclined to hang on to their pay-TV subscriptions.

Another fact is that StarHub is mandated to carry terrestrial channels such as MediaCorp 5 and 8 by the Media Development Authority of Singapore (MDA). In the latest plot twist, StarHub extended the offer to carry SingTel's content out of its own free will.

The MDA has already said that it would not interfere in the commercial arrangements of pay-TV operators despite some recent customer rumblings. This is consistent with its decision in 2006 when SingTel appealed successfully to the MDA to ban exclusive content such as the BPL on the grounds that it discourages competition.

This means that any tweaks to the regulator's policy should only be made in the next round of bidding three years later when the scores between the two quibbling foes are even.

While StarHub could be using the media to influence public opinion to get SingTel to concede the middle ground, it may have done the exact opposite of stirring the hornet's nest.

At the red camp, this suggestion will undoubtedly be seen as yet another gibe at its ability to wire-up the nation over the next 10 months for BPL broadcast.

StarHub's outgoing helmsman, Terry Clontz, had already questioned this once and the comment was met with a stern rebuttal from SingTel Singapore CEO Allen Lew.

'We have never said something and not delivered,' Mr Lew told BT then.

If SingTel takes up the StarHub offer now, it will be seen as backtracking on a public commitment. Pride aside, a compromise also cast doubts over the viability of its own mio TV platform.

If SingTel can resort to door-to-door selling in housing estates to push its mio TV service two years ago, you can be sure it will spare no expense to drive the take-up for its new sports portfolio.

Furthermore, the marketing machinery at SingTel has already been fired up. Its telemarketers have already started calling customers to up-sell its new sports line-up. Such a content-sharing arrangement would only complicate the sign-up process.

Rather than moping over the BPL loss, StarHub should move quickly to resolve lingering consumer doubts. Concede that the sports battle is lost and move on quickly to reposition itself with its other exclusive pay-TV content. Make the necessary price adjustments and offer perks to lock in consumers with shorter-term one-year contracts to stem immediate customer outflow.

StarHub has said that it would bounce back after being one goal down. Now it's time to put the money where its mouth is. Offering to take in your rival's star striker can hardly be considered a viable solution.