StarHub has up the ante in the fight for English Premier League (EPL) customers with a pledge to return S$30 a month to fans who cross-carry the content on its platform.
In a statement released early Thursday, Singapore's pay TV incumbent said it would now dish out up to $30 rebate a month for customers who opt to watch EPL matches on its platform. Cap at a total of $600, the rebate will effectively cover two seasons of the football tournament. Customers will not need to be tied to any contracts, and the rebate is eligible to both existing and new customers. However, they will need to sign up before September 30, 2013.
The move comes a week after StarHub's previous rebate offer of up to just $300, which was exclusive only to customers who signed up for its pay TV plus Internet service bundle. Customers had complained about the restrictions and found the offer confusing. Arch rival with a $480 rebate.in Singapore, also countered StarHub's previous offer
With StarHub's now improved rebate offering, EPL customers will pay just $29.9 a month to watch the matches. They'll first need to sign up with SingTel, which charges $59.9 a month for its standalone EPL package. At $29.9, EPL fans would now pay less than SingTel's previous subscription of $34.9 so there's great reason to celebrate the latest development.
For StarHub, it could mean its average revenue per user (ARPU) would be more than halved. In its statement, the telco said its pay TV ARPU for second-quarter 2013 was $52. No doubt the triple-service provider would be looking to make up for the loss elsewhere.
Rebate is StarHub's marketing spend
After all, it had been trapped in a lose-lose situation. StarHub lost the last three seasons of EPL fans when it lost the, and it lost again when its competitor quietly for another three seasons of the football league. In theory, this meant StarHub was free to negotiate its own deal with the Football Association Premier League (FAPL), but in practice, the agreement the association signed with SingTel made it challenging for StarHub to ink a reasonable contract of its own.
While there were reasons to rejoice when theEPL content, the mio TV operator announced its standalone EPL packages would cost a whopping $59.9 per month, compared to its previous sports bundle of just $34.9 per month.
So even if StarHub customers was willing to remain loyal and cross-carry EPL content on its platform, they would first need to be willing to part with $60 a month instead of taking up SingTel's discounted bundles. To add salt to injury, this revenue would still go directly to SingTel, not StarHub.
Many had wondered how StarHub planned to ensure its customers remained on its side. In discussions with friends, I speculated it should offer subsidies or rebates to lure EPL fans, but friends questioned why the operator would do that when it would be doing so at its own expense, without earning a penny from cross-carrying the content.
But I suggested that this expense could be regarded as part of its marketing spend, and one that would be wisely spent if the company turned it into valuable advertising championing its support for the customers amid the cross-carriage saga.
In an e-mail response, Lin Shu Fen, StarHub's head of home solutions, said the rebate would be partly offset by the cross-carriage fee paid up to the company from SingTel. This fee is meant to cover operational costs from cross-carrying EPL content on its network, she explained.
"While we will be absorbing loss for this rebate to benefit customers, we believe the loss will not materially impact our overall financials. We feel that it is important to show a sincere gesture of appreciation to our customers who support StarHub," Lin said.
I think StarHub has chosen a great path here. While costly, it will likely buy the operator some favor among EPL fans as well as other pay TV customers.
More importantly, though, this long-drawn saga should serve as sound warning so three years down the road, neither of the two operators should again resort to a bidding war that would only end up sending the wrong signals to the folks at FAPL--that Singapore is rich and, hence, highly exploitable.