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StarHub Ltd Repackages its PayTV Business for an Online Streaming World

Last week, StarHub Ltd (SGX: CC3) announced a major change in the price plans to its Pay TV business.

Prior to the change, customers had to start with a compulsory basic package at a monthly cost of $33.17. The new plan goes by genre – called d’Lite packs –  such as movies, sports, Chinese, Malay, and Tamil. The movie pack will cost $24.90 per month, while the other d’Lite packs will cost $19.90 per month.

The move comes in the wake of StarHub’s Pay TV segment being pressured by alternative viewing options and piracy.

Losing value

In its latest 2016 annual report, StarHub chairman Steven Terrell Clontz outlined the challenges in the company’s Pay TV segment:

“In the Pay TV business, OTT [over-the-top] players are also making headway in video entertainment, which is impacting traditional cable TV providers. In addition, the industry faces growing threats from non-sanctioned TV boxes and websites streaming the latest blockbuster movies and popular TV shows.

It is clear that the value of linear broadcasted TV content, offered over traditional networks, is not as valued as it once was.”

Fighting back

StarHub is acting to stem the loss of subscribers as alternative viewing options encroaches into its Pay TV area. Clontz added:

“StarHub continues to evaluate the commercial value of each content offering and works to realign our packages and pricing in keeping with customers’ needs.”

The latest change in the TV price plan mentioned above could be the outcome of this evaluation. In essence, StarHub is rebundling available channels into new packages that might suit customers’ needs better. The lower price points per pack also brings the company’s Pay TV offering closer to the prices charged by online streaming options such as Netflix.

StarHub is also looking to lower its content costs. Clontz said:

“We are happy to report that we have made progress with some content partners at lowering costs aligned with market realities. But we need more content providers to come around to the new realities.”

Time will tell if the telco’s latest move catches on. We will be watching to see whether the new packages will gain traction with subscribers.

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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.