Editor's note: This commentary is split into two parts. Part 1 discusses whether online streaming hurting TV operators is a bad thing. Part 2 talks about what the Media Development Authority (MDA) may do to address the increase in online content consumption.

Part 1

It was reported that SingTel made $10 million in revenue from 2014 World Cup. In an earlier report by TODAY, it noted that SingTel and StarHub won the 2010 World Cup rights in a combined bid worth $19 million. In the same report, Mr Allen Lew, Country Chief Officer of SingTel, said that cost of acquiring sports rights has increased 35 per cent since 2010.

Perhaps Minister Lawrence Wong was correct when he said that with Singapore being a price-taker, SingTel was unlikely to profit from World Cup 2014.

In the weeks leading up to the World Cup, several news reports and online forums seemed show that some Singaporeans would be turning to streaming the World Cup instead of paying the $112 in subscription fees.

Is it conceivable that SingTel's lack of profits from World Cup 2014 be partly attributed to online streaming?

Will the rise of online streaming continue to hurt cable TV operators?

The short answer is yes.

Consumers can access a wider range of programming at a fraction of the price. They also have the freedom to choose the types of programming they want, instead of the bundled deals by cable TV operators here.

If streaming content were made as accessible as YouTube, cable TV operators will have a major worry.

How does streaming look like now?

To watch Netflix, an on-demand streaming service with a library of over 100,000 movie titles, you would require a Netflix subscription (approximately USD10 per month) and also a Virtual Private Network (VPN) subscription. ISPs such as MyRepublic provides free VPN services.

The VPN allows you to fool Netflix's servers into thinking that you are accessing the site from the United States and let you stream content. Several other broadcasters in the United States stream their shows for free for US residents and VPN users can access such content outside of the US.

All-in, this is still cheaper than the lowest-priced cable TV packages offered by SingTel and StarHub.

I suspect that Netflix, and many other paid streaming services, would be more than happy for the additional revenue from VPN streamers.

There is also a myriad of free and paid streaming services from China that has long been an 'open secret' for viewers here who crave East Asian content.

Is there a way for cable TV operators SingTel and StarHub to strike back?

The legality of streaming content is in a grey area. For the World Cup, the rights holder, FIFA, can say that streaming its content is illegal.

For an organisation like FIFA, it relies on the SingTels and StarHubs of the world to monetise its content. It wants as many SingTels and StarHubs to buy its content. It does not benefit FIFA if viewers are watching its content for free bypassing their designated 'SingTels and StarHubs'.

Enforcement on illegal streaming is very time-consuming and expensive. Trying to find an illegal streamer is akin to finding a needle in a haystack, except the haystack itself is almost invisible.

So streaming and Virtual Private Networks (VPNs) are bad for content owners like FIFA, and certainly bad for content distributors like StarHub and SingTel. It represents a loss of revenue.

The cable TV operators can strike back in two obvious ways: 1) Price themselves lower and offer more content; or 2) Lobby for the government to regulate online streaming or regulate the use of VPNs.

Guess which option a profit-maximising CEO would prefer? I know which option Singaporeans would prefer.

What can the Media Development Authority (MDA) do? What should it do?

Blocking VPNs is a crude measure that can be easily circumvented by finding new VPN services. In the same vein, do you think MDA is capable of blocking every single pornographic website in existence?

Banning VPNs outright would be unwise, given the fact that many companies use VPNs for very legit business purposes. Even the Civil Service uses a VPN.

Cable TV operators demanding to make it illegal for home users to use VPNs and MDA agreeing to this demand is a slippery slope to go down. If it is VPNs today, why not Skype, WhatsApp and WeChat tomorrow?

I'm no media mogul, but if another company can supply a programme at a cheaper rate, I could either match his price or I can produce content that he cannot replicate. That's something for the cable TV operators to mull over and MDA should not have to intervene to 'help'.

So is online streaming a bad thing for Singaporeans? If it forces cable TV operators to provide better content at a cheaper price, then the answer is 'No, it is not a bad thing.'

But if we go down the slippery slope idea of outlawing streaming/VPNs, then our media scene just lost the plot.

End of Part 1 

Part 2

The commentary below is an extrapolation of what MDA might possibly do in the face of Singaporeans consuming more content online.

The real challenge MDA has with online streaming

Streaming online content actually poses another challenge for MDA - the material may not be in line with MDA's broadcast content guidelines.

Content that is considered too racy by MDA's standards can now be streamed directly into living rooms without MDA's regulation. What can MDA do?

In fact, YouTube has tonnes of videos which MDA may find questionable. The videos are all there, just waiting for someone to click play.

MDA's possible next move?

It is foolish to try to regulate the innumerable videos on YouTube, or even regulate streaming services from overseas.

First, MDA does not have the manpower to do the former. Second, why would foreign websites bother comply if Singapore forms a minute portion of their revenue?

It is however, foreseeable that MDA will try to identify YouTube channels and streaming websites that have a large Singaporean following, and possibly earning revenue from Singaporeans.

Identify and license them to ensure content they provide are 'in line with Singapore's values'.

They could possibly try to force a licence onto websites such as Netflix, get them to pay a security bond, or even tax a cut of their Singapore revenue. Why would they miss a chance to earn some GST?

I'm not sure how this is even possible with companies such as Netflix or Chinese streaming services like PPTV and Funshion, unless MDA threatens them with the ban/block hammer. VPNs can bypass blocks anyway and Singaporeans can still pay these websites for their services without MDA's knowledge.

I'm guessing the likely 'victims' of possible licensing would be local online content producers whose significant source of revenue come from Singaporeans. Examples are YouTube channels such as Wah Banana, Tree Potatoes, and Night Owl Cinematics.

More media development, not regulation, please

I would like to think that MDA is pretty enlightened and not so foolish in thinking that licensing online content producers like YouTube stars would be the way to go. It is a futile waste of time and effort.

Why would YouTube stars produce objectionable content in the first place if their goal is to earn money? The last thing they want to do is to get into the authority's bad books.

What about really bad and objectionable content?

The real objectionable content are likely to come from those who have nothing to lose - people who don't collect revenue from Singaporeans. The ugly side of humanity is readily available on YouTube as it is.

The best line of defense against such content, if you are a parent, is to educate your children or be around them when they are surfing the net. MDA can't play nanny to children who have the entire Internet readily accessible on their smartphones. Parents have to be the 'regulatory authority' in this case.

What is one consequence licensing online content producers?

Licensing online content producers serves only to instill the heebie-jeebies in young upstarts who are using YouTube as a cheap and effective way to market and showcase their works to a large audience base.

YouTube is the great equalizer Singapore has been waiting for in terms of developing and promoting our talents on an international scale.

Putting a license on budding YouTube filmmakers is just an unnecessary road block that has limited impact on the spectrum of content Singaporeans can access.

I don't think MDA is foolish enough to go ahead with it. I hope.

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