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Pop Culture

Keep pricing plans competitive or become the walking dead

Netflix and Spotify's one-price plan is the way to go

No prizes for guessing why lunch and dinner buffets are popular in Singapore - there is not much to think about when you can pay one price and eat whatever you want, as much as you want.

It is great whether you know it is the sashimi spread you want or you prefer to keep your options open and decide only after browsing the food stations.

The only two problems are wastage of food and not getting your money's worth.

But these two problems disappear when the buffet model is applied to pop culture offerings in television, movie and music content, as Netflix and Spotify have shown by their successes.

Their examples should force other content providers to rethink their pricing strategies in an age when piracy is so easy and tempting.

DreamWorks has launched a new 24-hour TV channel in Singapore via StarHub. So fans of the studio can catch its beloved characters such as Puss In Boots and Toothless the dragon in action all day, every day.

While audiences are certainly not entitled to free content, giving them more options without any extra  fees or complex sign-up procedures may soon be the  only way for  content providers  to stay competitive.

But why is the channel listed under StarHub's Supreme Box Office Pack, instead of in the Kids group?

Sure, the DreamWorks channel may be marketed as one for the entire family, but there is no denying that its core group of viewers will be under the age of 12.

With cheery animated series such as All Hail King Julien and Dragons: Race To The Edge in its programming line-up, it is similar in genre and tone to popular channels bundled under StarHub TV's Kids group, such as Disney Channel and Nickelodeon.

So what is it doing in the Supreme Box Office Pack, where movie channels such as HBO and Fox Movies Premium are listed, especially when the DreamWorks channel does not air a single feature-length film at the moment? Even Disney Channel broadcasts Disney movies every now and then.

Essentially, bundling the DreamWorks channel in the movie pack means that parents are forced to shell out more money if they want to subscribe to it for their children.

Audiences will have to pay $28.90 a month for the entire movie pack, or $8.56 a month for the channel alone - neither of which are cheap nor convenient options.

The Kids group, on the other hand, is considered one of StarHub's "basic" groups, which is more economical (monthly subscriptions start from $33.17 for three basic groups).

StarHub and DreamWorks' argument for making the new channel more expensive is probably because they are justifying the high quality of its programme offerings. Its shows are original, award-winning stuff, and the high-definition, immersive visuals are fantastic to look at.

But now that customers at Netflix and Spotify are showing with their wallets that they are increasingly favouring affordable, single-price plans to access a large amount of content, the StarHub/DreamWorks pricing comes across as both short-sighted and grossly outdated.

At Netflix, subscribers pay a flat fee of $10.98 a month to access its entire library of content. Some Singaporeans have grumbled that the content menu here is nowhere near as comprehensive as the service in the United States, but the monthly subscription fee is affordable enough so that you do not feel so guilty over-paying for whatever you are getting.

The Netflix model has arguably outshone even the pay-per-use pricing model that Apple's iTunes Store offers with its movie and TV show rentals and purchases.

That model had been lauded for reversing piracy when it was first made available in 2003, particularly within the music scene. You pay an affordable amount only for the exact song or movie that you choose, so there is no money wasted over paying for something you did not want.

But for movie- and TV-viewing, the pay-per-use model seems to have proven less popular.

It is why DVD stores have been slowly phased out - unless you love that particular film or TV episode so much, you would not want to pay for it, especially since it is not super cheap anyway. At press time, for example, it costs $5.98 for a 48-hour window to rent Pixar's animated flick The Good Dinosaur (2015) and $21.98 to buy it.

Still, even that beats the rigid and complex model used by StarHub.

Its system forces consumers to sign up first for what they call three basic tiers of channels, before paying additional fees for more channels.

This system may have worked for audiences here in the past - given the fewer options back then - but with Netflix launching here and changing the game, it may be time for StarHub to rethink and regroup.

While audiences are certainly not entitled to free content, giving them more options without any extra fees or complex sign-up procedures may soon be the only way for content providers to stay competitive. Otherwise, tech-savvy consumers will just as easily seek their content elsewhere.

Just look at how Fox International Channels failed when it aired its tentpole TV drama The Walking Dead on Fox Movies Premium, a more expensive movie channel, instead of on Fox, a basic entertainment channel that airs TV series.

The Walking Dead may be a massively popular show, but it was not enough to convince people to subscribe to Fox Movies Premium.

Instead, fans turned to illegal means on the Internet to catch new episodes, which was an even bigger loss for the company than if it had just kept it on the regular Fox channel.

It is no surprise that the company has since put The Walking Dead back on Fox.

If content providers do not keep their pricing plans competitive, they may well become the walking dead themselves.

•Follow Yip Wai Yee on Twitter @STyipwaiyee

A version of this article appeared in the print edition of The Straits Times on March 30, 2016, with the headline 'Keep pricing plans competitive or become the walking dead'. Print Edition | Subscribe