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‘Consumers are not quitting pay-TV to go to OTT brands like Netflix – they’re going to piracy’

Content Asia Summit

Content Asia Summit panel debates how to tackle the rise of piracy

The biggest competitive threat to pay-TV and video on-demand providers in Asia is not new entrants to the market like Netflix and Viu, it is piracy, but the laws in place to tackle it are too weak as illegal set top boxes continue to flood the market, a panel at the Content Asia Summit said last week.

Debating the issue in a session hosted by Media Partners Asia, the head of content at Singtel said that combatting piracy is the single most important issue the content creation industry now faces, and that the main responsibility for tackling piracy lies with the content owners.

“If someone was to ask me, what is the most productive investment the content industry could make right now, it would be in anti-piracy efforts,” Anurag Dahiya, head of content and ad sales at Singtel told his audience at the event in Singapore. “You don’t have to do the numbers to figure that out.”

However, a “big grey area” on the laws surrounding piracy is partly to blame for its rise.

“Determining what is illegal and what is legal – there’s a big grey area that the current laws leave unfortunately,” he said, avoiding direct criticism of Singapore’s media regulator.

“A lot of the responsibility for action [against piracy], certainly on a legal basis, lies with the owners of the content. There is very little unfortunately that the platforms [like Singtel] can do,” he added.

“We’ve got to step back and recognise that the platforms are licensed on a non-exclusive basis in Singapore. So as a non-exclusive licensee you can have no grievance when someone comes here are starts streaming content.”

“So it’s back to the person who owns the rights. And unfortunately we’re at the coal face of it. We’ve been facing the brunt of this decline in subscriptions.”

His comments came later on in a session that began with Media Partners Asia VP Arvind Venugopal presenting the findings from a new industry study that found that pay-TV subscriber numbers in Singapore have started to dwindle.

Singapore's slow pay-TV decline

Decline in pay-TV subscribers in Singapore; source: Media Partners Asia

However, this decline is not just a result of the rise of OTT players like Netflix and Viu, Dahiya suggested. “We’ve seen a decline in some quarters, but that’s not necessarily because of a shift to on-demand. It’s a shift to illegal streams. And this is a pointer for us to start streaming our live services in a different way,” he said.

Among the ways to do this would be the introduction of a recommendation engine, not only for Singtel’s on-demand service but also its linear offering, Dahiya said.

Other ways to combat the pirates are simply to focus on producing better content, and to simply rights issues so that content can more easily be made available across platforms, from TV to mobile, said Jeremy Kung, EVP new media and CEO TMNet at Telekom Malaysia.

Singtel’s head of content said that, among the causes of piracy, the relatively high cost of his network’s content (most piracy websites are free to use, and supported by advertising) is not one of them.

“It [piracy] is not led by pricing. Given our ARPU [average revenue per user] levels [which have held steady while subscriber numbers have fallen], we think the services are affordable, for the quality and width of services that ourselves and StarHub [Singtel’s main competitor in Singapore] provide, I think they’re a fairly justifiable price,” said Dahiya.

However, his view appears to jar with the findings of MPA’s research, which found that consumers in Singapore who cancel their video on-demand service do so primarily because they feel that it is too expensive.

VOD churn metrics

Reasons why Singapore VOD customers cancel their service; source: Media Partners Asia

The rise of piracy in Singapore, Media Partners Asia’s Arvind Venugopal pointed out, is partly a result of Android set boxes now widely on sale through which consumers can access pirated content.

Jonas Engwall, CEO of RTL CBS Asia, a joint venture between European media owner RTL and US network CBS Studios, pointed out that content piracy is very difficult to police as a result of the influx of set top boxes.

He said: “The other day, I was in Great World City [a Singapore shopping mall], but you could pick any mall. They’re openly selling illegal Android boxes.”

“There’s no recourse [to deal with the issue]. You don’t have to go to back alleys, you can buy them in a shopping mall. Collectively, there needs to be tools to address this,” said Engwall.

On the potential for new laws to be introduced to combat piracy, Engwall pointed at a solution that has been implemented in France.

“In France, if you get caught with pirated content, there are fines involved, but the scary part is that you’re not allowed to have internet for a year or so, which is a daunting experience for most people. So that’s something to think about it,” he said.

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