Challenging times ahead for telcos
Already plagued by dwindling pay TV subscriber numbers, StarHub and Singtel face a tough future with the possible launch of Disney+ here.
And new disruptions caused by the Covid-19 pandemic are also threatening to sink the pay TV business further, say experts.
About two weeks ago, Singapore-based job listings for Disney+ appeared on LinkedIn, fuelling speculation the streaming service could arrive here soon.
This followed Disney channels being dropped from StarHub’s and Singtel’s pay TV platforms on June 1.
Among the offerings that consumers can look forward to on Disney+ are movies and series from Disney, Pixar, Marvel, National Geographic and Star Wars.
Industry observer Oo Gin Lee, previously a tech editor with The Straits Times, told The New Paper: “Disney has always been one of the anchor tenants of the pay TV channels...I worry for Singtel and StarHub with more of these streaming players entering the local market.”
Telco analyst, Chua Soon Ghee, a senior partner at consulting firm Kearney, said: “It follows the trend of content owners wanting to go direct to consumers, and Disney+ might make it even harder for the telcos to retain their pay TV subscribers.”
Between 2015 and March 31 this year, the number of StarHub pay TV subscribers dropped by 40 per cent, from 545,000 to 327,000 households.
Singtel’s pay TV subscriber numbers dropped by nearly 10 per cent, from 423,000 to 382,000 households.
But stay-home measures during the pandemic may have helped the pay TV business.
Singtel said there has been increased viewership on Singtel TV in recent months, while StarHub recorded a double-digit percentage growth in viewing hours across its channels, with customers watching an average of 2.5 hours of programmes daily.
Viewership on the Singtel Cast streaming service has tripled, while StarHub saw a significant increase in the number of unique users on its streaming service StarHub Go.
But Mr Oo said he suspects that Singtel’s and StarHub’s streaming traffic may be insignificant compared to that of the major streaming services.
Data provided to TNP by web analytics company, SimilarWeb, showed that web traffic to StarHub Go accounted for just 0.002 per cent of total web traffic in Singapore in May.
And traffic to Singtel Cast was too low for data to show up.
On the other hand, YouTube took up about seven per cent of total web traffic, while Netflix took up one per cent.
Mr Peter Ho, an executive director at Deloitte Consulting Southeast Asia, said the lack of live sports during the pandemic would have led some consumers to reconsider their subscriptions.
Sales manager Roger Ng, 46, said he stopped his English Premier League (EPL) subscription with Singtel because there was no point paying for repeats.
A report by Kearney showed that even as the pandemic drew eyeballs to the screens, the economic fallout would make people more aware of how much they were spending, and what they were getting in return.
Mr Kenneth Tan, 49, who works in the oil and gas industry, lamented: “There are many channels in my bundle that I don’t even watch. I’m paying $120 a month for a lot of things I don’t need.”
But Kearney’s Mr Chua said some people would still have good reasons to keep their subscriptions.
He said: “The older generation is not as tech-savvy and tend to prefer the convenience that pay TV offers, instead of navigating apps and websites.
“What telcos have going for them is the customer relationships they have built with subscribers over the years. If they can leverage on that, pay TV can still be sustainable.”