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StarHub Ltd’s Pay TV Business is Under Pressure: 6 Key Things Investors Should Know

It is no secret that StarHub Ltd’s (SGX: CC3) pay TV business is under pressure.

In the telco’s latest annual report (for 2016), this matter was featured in the management’s discussion section, a column in which the company’s leaders seek to address the most pressing questions about the business. It’s an admirable effort, and one worth reading through.

With this in mind, here are six key thoughts from StarHub’s management on the company’s pay TV business.

For the first three thoughts, please go here.

4. Standing out from the crowd

StarHub is sharpening its focus on its pay TV content. In particular, the telco is looking to bring in more Asian content. The company’s chief marketing officer, Howie Lau, said:

“To differentiate our TV offerings, we have gone beyond the typical US brands and we have been adding even more Asian content as Chinese and Korean content are just as popular.”

Another area of focus would be original, local content. Lau said:

“We have also been increasing our local content output. Working with Infocomm Media Development Authority (IMDA), we have commissioned and produced a variety of programmes ranging from travelogues to children infotainment to sports documentaries.

We are looking to commission about 110 hours of original productions.”

StarHub is hoping that its differentiated content will help stem the slide in the subscriber count of its pay TV business. Time will tell whether it works.

5. Curating and partnering up

Lau also added:

“Over the past year, we have introduced a new TV package, dubbed the ‘Connoisseur Pack’, and added new brand name channels with unquestionable appeal, such as BBC First and DreamWorks.

We have teamed up with Netflix to help show their library over our pay TV platform.”

In essence, StarHub is working to bundle channels that might appeal to different segments within Singapore. Furthermore, the telco is also working with online streaming provider Netflix to bolster its content.

6. Strategic stake in mm2 Asia

StarHub has also acquired a strategic stake in film production company mm2 Asia Ltd (SGX: 1B0). StarHub’s chief financial officer, Dennis Chia, said:

“We acquired an 8.8% stake in Catalist-listed regional production house mm2 Asia Ltd for $18.04 million in June 2016. We already have a fruitful track record of working together since 2011. We believe this deal will help improve our pay TV offerings with more local content.”

The investment in the production house allows StarHub to tap on local, differentiated content that may not be available on other channels. This is related to the fourth point above.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Netflix.