Starhub's stock drop 4.5%.
Failed negotiation
Starhub's portfolio of educational channels will no longer be available to viewers due to a failed negotiation between Starhub and Discovery because it is not willing to pay a fair value for the programmes.
Types of disruption
Technology and piracy could be a part to play. Internet TV like Netflix and Youtube have disrupted the television business because of the availability of programs. Speed of internet also makes it faster to view the video clips and movies online. Piracy still exist because it markets itself as a cheap alternative to viewing starhub channels. A $45-$60 dollar a month subscription from Starhub could only cost you $8 per month with a pirated TV box, which is able to access most of Starhub's channel.
With multiple disruptions to its TV business, Starhub can no longer command a premium price for its TV subscriptions. Therefore, it is understandable why Starhub is not be willing to pay a premium to keep its educational portfolio.
Moving forward
Starhub can replace these channels with cheaper alternatives or to decide to slowly wind down their TV business and invest in new businesses to be able to sustain shareholders returns.
Source: Maybank Kim Eng - ketrade platform
10 year historical price chart
Starhub trading at close to crisis levels
Source: https://www.businesstimes.com.sg/companies-markets/discoverys-portfolio-of-11-tv-channels-to-be-dropped-from-starhub-after-june-30
