Television

A-Pac pay-TV piracy up 11%; revenue loss $1.06 billion: Casbaa

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MUMBAI: Pay-TV piracy is on the rise in the Asia Pacific region. A study released by The Cable and Satellite Broadcasting Association of Asia (Casbaa) and CLSA Asia-Pacific Markets (CLSA) revealed that the cost of pay-TV piracy in the region is projected to grow by 11 per cent from $952 million in 2004 to $1.06 billion in 2005.

A collaborative effort between CLSA, Casbaa and its member organizations, this study reflects a continuing trend, highlighting the fact that the problem is far from under control and the tempo in terms of illegal activity is rising.

This is the third annual study of the issue, covering all forms of cable and satellite pay-TV piracy in markets including Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. The report highlights the impact of unlicensed pay-television operators and unauthorized pay-TV access on regional economies.

The cost to governments in 2005 in lost taxes, license fees and other revenues is predicted to reach $155 million by year end 2005. Higher revenue leakage in India, Thailand, Vietnam and the Philippines is of particular concern. Nevertheless, with a stable $24 million loss, the piracy deficit in Hong Kong is extremely damaging for the overall health of the pay-TV industry, according to Casbaa.

India still leads the region in terms of net revenues lost. Thus, although the revenue loss to unauthorised cable access by individuals is down from $57 million in 2004 to $38 million in 2005, the grey market deficit caused by theft of programming on a wholesale basis has increased overall losses from last years $507 million to this years $632 million, scaling up the total loss by 19 per cent to $670 million.

Pay-TV piracy losses for China are not included in the report, since China is considered, by some industry definitions, to have a negligible, genuine pay-TV market.

In Indonesia, due to the growing number of set-top boxes with breached security systems, an increase in the number of illegal pay-TV operators and satellite signal overspill, industry losses have surged by 25 per cent to an estimated $24 million this year.

Losses to the industry in the Philippines are estimated to have jumped 16 per cent for 2005, as the number of illegal connections by individuals and by rogue cable operators continued to rise. Growth of the legitimate industry has been damaged by the unchecked growth in operations by cable operators who steal programming and resell it to an unsuspecting public. It is estimated that there are now almost the same number of pirate connections as legitimate paid subscriptions in the country.

In Thailand, estimated losses are up 15 per cent year-on-year, to $160 million. While the legitimate industry in Thailand continues to grow, it faces debilitating competition from unlicensed and unregulated competitors.

Vietnams revenue loss has seen a remarkable jump of 68 per cent as the pay-TV market there enters a phase of dynamic expansion. Legitimate subscriptions are rising rapidly, but connections through operators who steal their programming are rising even more rapidly. Vietnam is conservatively estimated to have an illegal subscriber count of 370,000 households.

After reviewing the methodology for calculating pay-TV piracy in Taiwan and yet closer consultation with local operators and the pay-TV channels, estimated losses to the industry from pay-TV piracy still stand at $47 million. While this estimate has fallen from last year, the decline is due to a better understanding of the market-place and not to a real decline in the use of pirated programming. Revenue leakage remains serious and in need of active remedy by the industry and the government.

Meanwhile, the good news is that jurisdictions such as Malaysia and Singapore have made progress since 2004, with dwindling piracy percentages.

Indeed, in Malaysia the cost of pay-TV piracy has dipped by 45 per cent in 2005 to $2.7 million as a result of collaboration between industry and government in enforcement measures to combat the problem. The countrys pay-TV industry, represented by leading operator Astro, has invested substantially in new technologies in order to stay one-step ahead of the pirates.

"While an overall growth of 11 per cent in estimated regional revenue losses due to pay-TV piracy for 2005 is in line with forecasts, the problem is far from under control. There are more markets showing negative development than those having success in counteracting pay-TV piracy. Thats why combating pay-TV piracy remains the industrys top priority. We will continue to work closely with regulators and those carrying out enforcement to roll back these costs to the industry and the community at large," said Casbaa CEO Simon Twiston Davies.

"The increased revenue loss resulting from pay-TV piracy is not only an issue for the industry but also one pertaining to intellectual property rights and to the entire economy in Asia," said CLSA director investment banking and head of media and entertainment investment banking Simon Dewhurst.

"Governments across the region must step up their efforts in protecting intellectual property rights and fight pay-TV piracy to encourage investment and further development of the industry and the economy," he added.

CLSA and Casbaa will release the results of the latest pay-TV piracy study today (27 October) at The Casbaa Piracy Lunch 2005 in Hong Kong during the annual Casbaa Convention.

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