Can local content save StarHub’s skin amid intensifying competition?

It’s trying to hold on to its subscribers.

StarHub seems to be playing it cards right—its recent moves to invest in content creation will not only diversify its revenue streams, but also serve as a defense regarding mounting threats in the mobile and pay-TV markets.

According to a report by BMI Research, StarHub expects to close in May its $18m deal for a 9.05% in mm2 Asia. The two companies have also inked a memorandum of agreement to jointly produce up to $25m worth of original local content over a three-year period.

Considering that StarHub has been investing mm2’s productions since 2012, StarHub’s decision to bag a stake in mm2 may be a signal of its plan to bolster capabilities in original content creation. mm2 provides content for TV and online platforms across Singapore, China, Hong Kong, Malaysia and Taiwan through several partnership deals.

Further, as the fourth mobile operator would set its sights on basic pricing and fulfilling network coverage objectives, incumbents will have to boost their services and advanced content for product differentiation and subscriber retention.

With the tightening competition for OTT video-streaming services, the report suggests that StarHub will be using original content to hang on to its local subscribers rather than chase overseas expansion.

Moreover, StarHub’s deal with mm2 comes on the heels of mm2’s purchase of a 51% controlling stake in Singapore entertainment company Unusual (stylised as UnUsUal) Group for $26m in February 2016.

“StarHub could acquire more valuable content from streaming local events and concerts 'live' —creating a unique value proposition for its pay-TV service which will set it apart from OTT rivals,” the report asserts.