Next month, the fever generated from the irrepressible, hip-gyrating inducing samba music accompanying the soccer festival in Brazil, the host of the month-long World Cup 2014, will infect Singaporeans, soccer fans and non-soccer fans alike.
Central to the recent debate on the TV coverage of the quadrennial World Cup 2014 matches is the price at which the coverage is made available to sports fans, at least as far as the soccer fan is concerned.
That is not surprising because coverage of such a popular sport in Singapore should be made accessible to as many TV viewers as possible at a reasonable and affordable price. The World Cup (WC) will be held in Brazil from 12 June – 13 July 2014.
Singtel managed to secure exclusive rights from FIFA, the world soccer governing body, to broadcast all the matches. Singtel outflanked local rival StarHub with this move which StarHub protested as ungentlemanly, given its earlier offer to Singtel to do a joint bid to secure exclusive rights (Singtel and StarHub had submitted a last minute joint bid to secure broadcast rights for WC 2010). But Singtel had other ideas.
Singtel’s move was strategic as it wanted to enhance shareholder value by securing future revenue streams via more subscriptions through its “sign up for 2 years and get free WC viewing” promotion. While you cannot fault a corporate entity to go for the jugular in the competitive war against its rivals in the pay TV market, you do feel for the average Singaporean consumer, who looks to be a little more than a victim of collateral damage.
The price of the non-promotional WC package is $112, easily one of the highest in the world. Countries where residents get to watch the WC for free include Australia, Britain, Norway, China, South Korea, Japan, Thailand, Indonesia and Cambodia. Comparing with countries which do charge a fee, our consumers come out looking very disadvantaged as well. WC package costs S$38.40 in Malaysia , $6 in Denmark and $21 in HK. So what can our industry regulators do to ensure greater equity in the market for consumers?
Price is just the symptom of the shortfalls of our local Pay TV market mechanism. The bigger issue is whether WC coverage as well as the coverage of big sporting events like the Olympics, Asian Games and Commonwealth Games, should be viewed as public goods? And if they are, would it be fair then to allow the price of these public goods to be determined by free market mechanism which inherently disregards social and community benefits from its pricing mechanism?
Second Minister for Communications and Information Mr Lawrence Wong, has said that the latitude for price negotiation is pretty tight given that the WC content owner, FIFA, is the price setter and holds significant bargaining power. FIFA can just choose not to sell the rights if pay TV operators cannot meet its price. So it appears that Singapore is at the mercy of FIFA whenever WC comes around. But can we not do something to tackle this price challenge so that our consumers are not disadvantaged to the extent they are at the moment?
Mr Wong says Public Service Broadcast (PSB) funds are used to secure the broadcast rights of top level sports content like Olympics, Asian Games and Commonwealth Games. The fact that the coverage of these sports events are funded by PSB funds, provides some justification for supporting the argument to treat the WC in the same way i.e. as a public good which is deserving of public funding, if not wholly, at least in part. On the Ministry of Communications and Information website it is stated that “Public Service Broadcast (PSB) programmes play an important role in fostering a cohesive and informed society, as well as to celebrate our shared identity”.
Part of this effort to foster a more “cohesive and informed society” would be initiatives to create more common spaces and understanding between Singapore-born and bred citizens and foreigners/new citizens. The quadrennial WC is a sporting event which has high public interest and following. Singapore, a global city state with many foreigners of different nationalities living and working here, should welcome the WC as an opportunity to educate its citizens about the culture and unique lifestyles of ordinary people from the various nations that maybe competing in the WC. This serves to strengthen our bonds with the new migrants and foreigners, while giving them an opportunity to know Singaporeans better through a common currency – love for football.
It maybe be argued that this public interest justification to fund WC coverage is already met by putting 4 key WC matches in the anti-siphoning list, as provided for in the Media Market Conduct Code.
The anti-siphoning list draws up a list of sporting events like the World Cup, whose broadcast rights should not be exclusively acquired by pay TV providers and must be available for free-to-air (FTA) broadcasters to acquire, namely MediaCorp. Examples of other sporting events include Olympics, SEA Games and Asian Games and all matches in which the Singapore national team is playing as part of the World Cup.
So placing a sporting event in the anti-siphoning list does not make it free. It still has to be acquired at a price by MediaCorp either exclusively or from either of the 2 pay TV providers through a sub-licensing agreement.
However, the 4 key matches (opening day match, 2 semi-final matches and final) which will be broadcast on a FTA channel in MediaCorp, also compares poorly with what is on offer by other territories. Malaysia and Denmark offer 32 matches and Hong Kong offers 22 matches in their FTA channels.
Perhaps in the impending review of the cross carriage and anti-siphoning provisions under the Code, regulators could explore the feasibility of adding on more matches into the anti-siphoning list.
So under a scenario whereby pay TV operators continue to bid competitively for the WC broadcast rights, the anti-siphoning list could be increased from the current 4 matches to 9 (or more), to include the quarter-final matches as well as the 3rd place match.
However, regulators could institute a requirement by the pay TV operators to secure the broadcast rights well ahead of the event, say a year in advance. An early deadline could give pay TV operators more time to sell WC promotional packages, develop more creative content leading up to the WC which will in turn draw more sponsors and advertisers.
The successful bidder (after being appointed as a commissioning broadcaster) could initiate a call for proposal to commission an ancillary sports-infotainment content (which will run in tandem with the main live match coverage) under the auspices of the PSB Contestable Fund Scheme (PCFS). This content should be available on multiple platforms thus increasing reach and generating more viral marketing opportunities.
Under the current PCFS rules, MediaCorp will have exclusive broadcast licence to the PCFS funded programme for up to one year. MediaCorp can then air the programme together with the 9 acquired “live” matches under the anti-siphoning list. This will generate advertising and sponsorship revenue from which will help MediaCorp offset the cost of acquisition of the “live” matches under a sub-licensing agreement with the successful bidder/pay TV operator.
Singapore Pools which earns money from betting on WC matches, could be persuaded to “give back” to the community by increasing its subsidies for Singaporeans wanting to watch the WC. MediaCorp could work with Singapore Pools in this respect to explore how this could be done. Perhaps a sports viewership fund of sorts could be set up to which Singapore Pools could contribute yearly and from which MediaCorp could draw from to support its purchase of the rights to air WC matches in the anti-siphoning list. In return, Singapore Pools could receive first rights for sponsorship of the programme assuming sponsorship rules are met.
The advantages of this proposed plan of action is that viewers get to see more of the key matches “live” on FTA TV (MediaCorp) and the free market principles of the competitive bidding for WC broadcast rights by private pay TV companies are respected. Also while possibly more public funds maybe used by MediaCorp to pay for the sub-licensing fee for the key matches, this is minimised as far as possible by its access to the proposed viewership fund. Another positive knock-on effect is that the standard of Singapore TV production in general gets a boost.
One possible setback is pay TV operators will have to continually face the prospects of higher bids in order to secure the WC rights. But this is ameliorated by more time available for securing advertisers and sponsors.
Another possible plan of action would simply be for all the main parties, Singtel, StarHub and MediaCorp, to proceed with a private-public joint-bidding exercise to secure the WC rights within a clearly stated deadline. The regulators need to make a strong “public good” argument for this proposal to take hold and gain currency among the pay TV operators. This is not just because a larger sum of money maybe required from the PSB fund for MediaCorp to do this but also to counter possible criticism that free market principles have been compromised with the submission of the joint bid by 3 separate entities.
Creative solutions can be negotiated on how the pie is divided among the 3 corporate entities in terms of advertising and sponsorship revenues with MDA playing the role of facilitator to ensure overall fairness in the negotiations.
In conclusion, I believe the time has come for some concrete measures to be taken to deal decisively with the issue of the cost of viewing WC matches in Singapore. And it starts by recognising what value the WC could potentially bring for us Singaporeans which goes far beyond economic benefits. I’m afraid when it comes to WC TV viewership, there are good arguments to treat it as a public good which would justify some form of mandated regulation in order to tackle unfettered price increases in future. Viva la Football!!
Here’s the People’s Association’s World Cup Screening Schedule at all the various community clubs in Singapore.
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