Reducing Pay-TV Rates with Content Reduction
Ministry of Digital Development and InformationSpeakers
Summary
This question concerns Mr Yee Chia Hsing’s proposal to require pay-TV operators to reduce subscription charges on a pro-rata basis when programming content is reduced within bundles. Minister Assoc Prof Dr Yaacob Ibrahim replied that the Media Development Authority considered this but instead prioritized allowing consumers to exit contracts without early termination charges. Current measures permit penalty-free exits if operators increase prices, remove material channels or sports content, or remove at least 20% of the total channels subscribed. These rules incentivize operators to offer mitigating actions, such as rebates, to retain subscribers when significant changes to TV programming content are made. The government believes this approach effectively safeguards consumer interests while allowing the pay-TV industry to remain commercially viable and continue innovating its service offerings.
Transcript
46 Mr Yee Chia Hsing asked the Minister for Communications and Information whether the Ministry can consider requiring pay-TV service providers to reduce their subscription charges on a pro-rata basis when the TV programming content is reduced as consumers may have subscribed to pay-TV services that are bundled with mobile and internet access and the option to cancel pay-TV services alone may not result in savings.
Assoc Prof Dr Yaacob Ibrahim: When reviewing consumer protection measures last year, MDA had considered having pay-TV operators reduce their subscription charges on a pro-rata basis when certain channels in a subscription bundle are no longer provided. After getting views from stakeholders on this proposal through a public consultation, the Media Development Authority (MDA) decided not to proceed with it.
The value of a channel or a programme within a bundle can be subjective and vary from consumer to consumer. Also, pay-TV operators may offer other similar channels in place of the discontinued ones. During our focuse group discussions, consumers provided feedback to MDA that instead of reducing charges on a pro-rata basis, they prefer to be given the option to exit without early termination charges.
After careful consideration, MDA decided not to proceed with the proposal. To protect the interests of pay-TV subscribers, MDA introduced other measures in April 2016. These include allowing subscribers to exit their contracts without early termination charges when the pay-TV operators (a) raise subscription prices; (b) remove a material channel or sports content; or (c) remove 20% or more of the total number of channels subscribed. To retain their subscribers, pay-TV operators would need to take mitigating actions when they make these changes, including offering rebates on subscription fees.
We believe this is a better way to safeguard consumers’ interests while allowing the industry to innovate and remain commercially viable.