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October 14, 2009
SingTel’s surprising announcement Monday on pricing for Premier League broadcasts was timely, coinciding as it did with our TelcoTV event, which wrapped up yesterday; certainly there were a lot of questions around the logic of offering up football (soccer) matches at such a low price.
Basically, SingTel’s offer consists of:
- All Premier League matches;
- A set-top-box thrown in for free
- An unbundled US$17 price tag – meaning households need only buy the football, not a basic subscription.
The latter is significant because it will negatively impact bottom lines considering the operator probably paid somewhere in the neighborhood of US$200-250m for three-year broadcast rights. Assuming the bid was at the high end, it would probably need to charge about US$35, $20 and $17, respectively, over the next three seasons just to break even on the content (based on our initial take-up estimates after SingTel CEO Allen Lew’s announcement Monday).
Yet we like what we see because it shows:
- A sensitivity to consumers and football fans, who are currently locked into StarHub, the pay-TV incumbent and current EPL rights holder;
- An understanding that for IPTV to succeed, set-top boxes must be offered up for free to drive adoption and provide a storefront in the home for programming, applications and services.
Considering SingTel’s other announcements around ESPN, Star Sports and ESS News, we are likely to see the operator enjoy massive market share gains next year. And having Premier League football as a loss leader will allow it to reach scale. Clearly, SingTel knows the tendency of viewers to channel surf – making this prime time to encourage the peek-and-purchase dynamic.
— Charles Moon, Manager, AP
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