Please read the case \"StarHub: English Premier League\" presented below and ans

Question

Please read the case "StarHub: English Premier League" presented below and answer the questions:

StarHub: English Premier League

Some of the most ardent fans of Arsenal, Manchester United, and Liverpool live far from Highbury, Old Trafford, and Anfield. Until the 2006-2007 season, ESPN held the broadcast rights to the English Premier League (EPL) for Singapore. Then, in late 2006, StarHub bid and estimated $160 million U.S. dollars to beat ESPN to win the rights for the next three seasons. The winning bid paid more than ESPN had paid for the previous rights.

The Singapore government prohibits the reception of satellite TV. StarHub, and integrated telecommunications and cable provider, is the only provider in Singapore. In 2007, StarHub's major source of revenues was mobile services, which accounted for 52% of revenues and included:

Cable TV 17%

Broadband 12%

Fixed network services 14%

Equipment sales 5%

In 2001, StarHub unbundled the basic cable TV package into thematic basic packages and reduced the price from $32,95 to $20 a month. Subsequently, it added new channels to the various basic packages without increasing prices. In 2004, StarHub raised the price of the sports package from $8 to $15 a month. The sports package included ESPN Star Sports. Typically, cable TV operators pay content providers such as ESPN a royalty based on the number of subscribers to the content.

Following the acquisition of the English Premier League (EPL) rights, StarHub announced price increases to the basic packages from $20 to $24 a month in July. StarHub decided to broadcast the EPL on its own sports channel, which is included in the sports package. This resulted on an increase of the sports package from $15 to $25 a month, effective in October.

Mr. Thomas Ee, StarHub Senior Vice President explained price increases this way: "Most pay-TV operators around the world increase prices periodically, and StarHub has not done so despite a steady rise in costs over the years."

In 2007, StarHub's cable TV revenue grew by 9% from S$313 million to S$342 million. The average revenue per user (ARPU) rose by 6% from S$48 to S$51, while the subscriber base increased by 4% to 504,000 as at the end of December, 2007. Relative to the number of households in Singapore, the subscriber base amounted to a 45% penetration rate.

Explanation / Answer

Ans:

a) StarHub raised the price of the sports package by $7 to $15 a month. The sports package included ESPN Star Sports. Typically, cable TV operators pay content providers such as ESPN a royalty based on the number of subscribers to the content.StarHub

announced price increases. It raised the price of basic packages by $4 to $24 a

month with effect from July 11. It decided to broadcast the EPL on its own sports

channel, which was included in the sports package. It raised the price of the

sports package by $10 to $25 a month, with effect from October.these are the changes in the demand and costa...first they are done with the mobiles and other services..then creating a buzz in tv marketing.thy extended their services to cable tv by the demand...

b) we know that the StarHubs major source of revenues was mobile services, which

accounted for 52% of revenues, with cable TV, broadband, fixed network

services, and equipment sales accounting for 17%, 12%, 14%, and 5%

respectively. In 2001, StarHub unbundled the basic cable TV package into thematic

basic packages and reduced the price from $32.95 to $20 a month.

Subsequently, it added new channels to the various basic packages without

raising prices. The new channels included CCTV-9, Discovery Travel & Living

and STAR Chinese Channel. In 2004, StarHub raised the price of the sports package by $7 to $15 a month. The sports package included ESPN Star Sports. Typically, cable TV operators pay content providers such as ESPN a royalty based on the number of subscribers to the content.the above factors indirectly are relevant to the starhub's pricing of cable tv's

c)StarHub announced price increases. It raised the price of basic packages by $4 to $24 a month with effect from July 11. It decided to broadcast the EPL on its own sports channel, which was included in the sports package. raised the price of the sports package by $10 to $25 a month, with effect from October. Mr Thomas Ee, Senior Vice President of Cable, Fixed & IP Services,justified the prices increases

StarHubs cable TV revenue grew by 9% from S$313 million to

S$342 million. ARPU (average revenue per user) rose by 6% from S$48 to S$51,

while the subscriber base increased by 4% to 504,000 as at end December 2007.

Relative to the number of households in Singapore, the subscriber base

amounted to a 45% penetration rate. so,in the above way by increasing the cost of basic packages it adjusted the cable tv pricing..

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