Debated in Parliament on 12 Aug 2013.
Mr Zaqy Mohamad asked the Minister for Communications and Information in view of the recent ruling against SingTel's appeal on sharing of Barclays Premier League (BPL) content (a) how does the local subscription cost for paid BPL channels compare with charges by other TV operators in major markets; and (b) whether MDA foresees other impact or inconvenience to consumers, such as procedures, processes or hidden costs, due to the cross-carriage measure.
I would like to emphasise upfront that it is not the intent of the cross-carriage measure to lower the cost of pay TV subscriptions. In any competitive market, prices will be determined by market forces. On this, I would like to share two points on the pricing and packaging of premium sports content in the pay TV market.
First, globally, the cost of acquiring premium sports content, and BPL content in particular, is on an upward trend. In the UK, BT and BSkyB jointly paid about £3 billion for the BPL rights – a 70% increase from the last round in
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2009. Closer to home, it was reported that there has been an increase in BPL content acquisition cost of more than 450% and 300% for the Thai and Vietnam pay TV markets respectively. Such a trend was also mentioned in a recent The Business Times article on 31 July 2013. In fact, and I quote, "so dear were these rights that Abu Dhabi Media dropped out of the EPL race in the Middle East, citing the 'commercial infeasibility of the deal'".
Hence, it would be unrealistic to expect the cost of premium sports content to remain unchanged when they continue to grow in appeal. Our pay TV retailers would have their own commercial considerations when determining the packaging and pricing of their offerings, including what they think would be acceptable to customers.
Second, premier sports content, such as the BPL, is more often than not offered on a bundled basis with other content. This practice is seen in numerous countries like Malaysia, Thailand, Hong Kong, Australia and UK, and is an established pay TV norm, which allows for premium content costs to be monetised over a larger subscriber base. Ala carte channels, where available, are usually more expensive than bundled pricing.
MDA has looked at the prices of the comparative bundles in several countries, including Malaysia, Thailand, Hong Kong, Australia and also, the home country of the BPL, UK. As BPL is not offered on an ala carte basis in these countries, MDA compared Singapore's BPL ala carte offering to the cheapest packs in these countries. While our pricing in Purchasing Power Parity (PPP) terms is more expensive than that in Malaysia and Australia, it is less expensive than in the United Kingdom, Hong Kong and Thailand. Members can refer to the table below.
We also note that following the announcement by SingNet on the pricing for the ala-carte BPL, both SingNet and StarHub have come up with competitive triple-play bundles and promotional rebates or discounts for subscribers who sign up or recontract for these bundles and the BPL content. In fact, StarHub’s latest announcement on 8 August 2013 essentially means that customers can potentially watch BPL content for less than the original $34.90, after the full rebate. This also results in the lowest price option available among the countries in the table below.
Further moderation in sports content prices in Singapore will come about once pay TV providers and sports content owners realise that beyond a certain price level, they stand to lose more consumers, as consumers switch to
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alternative sports franchises or access platforms.
On the implementation of the cross-carriage measure, I understand that MDA has been closely monitoring the implementation process and has, in fact, facilitated a number of implementation meetings with both SingNet and StarHub. The Media Market Conduct Code (MMCC), also imposed obligations on both pay TV operators with regard to ensuring the smooth implementation of the cross-carriage of the BPL channels in time for the season's kick off on 17 August 2013, and that there is no discrimination in the customer service arrangements and viewing experience for subscribers on either platform. MDA takes a serious view of any breach of obligations by either pay TV operator and will not hesitate to take firm action against providers that breach their obligations.
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