Television

Piracy losses to hit $970 million: Casbaa, CLSA report

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MUMBAI: The Cable and Satellite Broadcasting Association of Asia (Casbaa) and CLSA Asia-Pacific Markets today announced the results of CLSAs independent assessment of the cost of pay-TV piracy in the Asia-Pacific region for 2004, which was conducted in collaboration with Casbaa and its member organisations.



The cost of pay television piracy in the Asia-Pacific region is predicted to rise 11 per cent from $874 million, as estimated in 2003, to $970 million as estimated in 2004. The report reveals the impact of piracy across all sectors of the Asia-Pacific pay-TV industry, from platform operators to independent suppliers of programming.



This is the second annual Asia-Pacific Cost of Pay-TV Piracy Report covering all forms of cable and satellite pay-TV piracy and spanning Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. The report highlights the impact of unlicensed pay television operators and illegal system subscribers on regional economies.

The cost to governments in lost taxes, license fees and other revenues is estimated to be at least $152 million, according to PricewaterhouseCoopers, who contributed to the report.



The cost of piracy in India ($565 million) continues to dominate regional piracy numbers, contributing 58 per cent of total revenue leakage. The Philippines ($70 million) suffered a dramatic surge of 345 per cent in net revenues lost to the industry driven primarily by a jump in the number of detected unauthorised cable subscribers as compared with the 2003 report. The loss in Indonesia ($21 million) soared by 183 per cent.



Hong Kong ($25 million loss) has suffered a 66 per cent increase in revenues lost to pirated cable subscribers, but the piracy cost associated with satellite overspill has fallen by 16 per cent, due in part to industry de-liberalisation efforts (reported subscribers in Hong Kong have jumped 58 per cent year on year), and in part through the success of anti-piracy measures undertaken by Casbaa on behalf of its members during the past 12 months.



Thailands loss ($141 million) is up 23 per cent year on year. The report concludes that 1.1 million subscribers access unlicensed pay television services in Thailand. Singapore and Vietnam experienced worsening situations, while Taiwans signal theft figures remain similar to 2003. Early indications suggest that efforts to counter a breach in the systems designed to counteract piracy in Malaysia during the third quarter of 2004 have been successful, providing a standout example for other regional markets. South Korea is the only market with no material piracy reported. Australia and China are not covered by the survey in 2004.



"Yet again the results are alarming," said Casbaa CEO Simon Twiston Davies. "Pay-TV piracy in Asia-Pacific is not a matter of small-time individuals who make a part-time living from trading in pay-TV decoders and smart cards. The culprits have direct links to, and funding from, organized-crime syndicates investing large sums of money in breaking encryption systems and collecting illicit cable subscriptions."



"These characters are often involved in drug running and prostitution. In some markets these guys have relationships with terrorists. The offenders are far from nice people and the perception that pay-TV theft  and the theft of other types of intellectual property rights  is a victimless crime must be clearly rebutted," added Twiston Davies.



"The report clearly demonstrates the severity of the cost of piracy around the region," said CLSA Asia-Pacific Markets director and head of media and entertainment investment banking Simon Dewhurst.



"The governance and protection of intellectual property rights will play an increasingly important role in economic growth across Asia, and will continue to form one of the criteria used by the international investment community to determine which markets receive foreign direct investment. Government ministers must realize that pay-TV piracy presents a direct and high profile attack on efforts to promote a robust approach to intellectual property rights protection," he added.



CLSA noted that the global pay-TV industry is larger than the global recording and filmed entertainment industries combined in terms of revenue. It is vital that all industry participants in Asia join forces to address the problems and overcome the challenges of piracy.



"Piracy continues to undermine growth and investment across the regional pay-TV industry, in spite of the fact that the sector is expected to grow by up to 10 per cent in 2005," emphasised Twiston Davies. "That's why Casbaa's top priority is to stamp out pay-TV piracy. We will continue our work with governments, regulators, law enforcement bodies and industry players across Asia-Pacific to combat the problem, enact laws, and develop educational programmes that promote a vibrant multi-channel TV environment."



The second Asia-Pacific Cost of Pay-TV Piracy Report will be released at the Casbaa Convention 2004 held from 27-29 October in Hong Kong. A separate session on the piracy issue titled 'Piracy  Another Billion Dollars Burned!' will take place at 11:30 am on 27 October at the Hong Kong Academy for Performing Arts. The session will feature a presentation by Dewhurst followed by a panel discussion.



This year, Asian pay-TV growth, advertising, piracy, opportunities in China and the roll-out of 3G services will top the agenda at the Casbaa Convention.

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