Setanta has finally gone off the air for good in the UK. The Irish broadcaster slipped into administration some £200 million in debt and costing at least 200 jobs. Lots of babble on the Beeb about poor customers still having to pay for a blank screen but as its a monthly subscription service, one of its attractions and weaknesses, it shouldn't be hard to stop the direct debit. Poor punters..out of pocket £12.99 max. Could the business model have worked without the recession?
Setanta needed 2 million subscribers to break even. That was a big ask. Sky, has 9 million and has taken 25 years to build up. Setanta did not do badly with viewers, getting 1.2 million, but there was no room for the unexpected. Like a global recession or the bad publicity from a poor customer service problem. Also Setanta did not appear to offer value for money. A Sky package costs far more but also includes far more. Especially a lot more of much better football matches. Then add in movies and sports and comedy and lifestyle and documentary and music , sci-fi/horror/shopping/quiz and many other channels. Setanta was not bad value for a die hard, rugby, golf and footy fan, but it did lead to football fans feeling they were being asked to pay twice. The competition rules, largely bought in to break up the Sky monopoly were inadequate. Only one of the six sold packages needed to be sold to a second bidder as well. This was the inferior tea time kick off, early start games.
But the real question that should have been asked when the directors sat down to work out their plan to topple Sky was
"Hasn't this been tried before? like ITV digital?"The Setanta plan was thinking that people would not pay for Championship football but WOULD pay for Premiership football. That was a little bit wishful. Footy fans will pay a huge amount to watch Liverpool vs Man Utd but not a lot for Stoke vs West Brom. Setanta made the classic mistake of over paying for a product.
There are other reasons too. Short term private investment income, when long term investment was required. That same long term investment made very difficult to find when TV rights are sold in 3 year packages. Once Setanta lost two of its three Premiership rights for 2010-2013 back in February it was all over bar the switch off.