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TV battling the perfect storm of piracy, Netflix and millennials

netflixPiracy, millennial viewing habits on mobile devices and the rapid global expansion of subscriber content services like Netflix are causing major challenges for the linear television market, delegates at the Asia TV Forum and Market heard today.

Last year, Netflix spent some $6 billion creating 30 exclusive shows. At the same time, the percentage of consumers in Asia who consumed content illegally was thought to be as high as 40 per cent of the population – meaning traditional TV programme and filmmakers could be losing up to 25 per cent of their annual revenue to piracy.

Speaking to Mumbrella at the week-long conference in Singapore, Ernst & Young India partner Ashish Pherwani said it was not possible to eliminate piracy or to accurately measure how widespread it was. Although he estimated that the percentage of the population in the region illegally accessing content could reach up to 40 per cent. “Can you shutdown a website or stop illegal DVDs being sold? You can’t,” he said. “There is no real data on how big the problem is. How do you track piracy?

“It’s not just those people who would never have paid for the content anyway. It is those people who would have paid for the content had the illegal version not been easily available. You can’t eliminate piracy, but you can reduce it through better regulation. However, it is not easy, and it is something the whole industry is struggling with.”

Meanwhile, IHS Technology chief analyst and vice-president (UK) Ben Keen pointed to the Netflix phenomenon as an industry sea change. He suggested it was “a boom time for content creation” that provided challenges for linear platforms and those monitoring firms, like Nielsen, whose business models depended on audience measurement in order to provide advertisers with evidence on which to base their spends. “Netflix is becoming the model in terms of the focus on original content,” said Keen. “Last year, it spent $6 billion on creating 30 new shows and this year it will be $7 billion. Those are staggering numbers.”

In certain markets, like Indonesia, Netflix has been banned. While in more open markets, such as Korea, broadcasters like D’Live are actually partnering with Netflix. This new wave of collaborative working was seen as a progressive way forward by some industry leaders.

President of Media Nusantara Citra, David Fernando Audy, is in charge of four free-to-air TV stations in Indonesia – in what is the fourth most populous country in the world.

He told Mumbrella he hoped the Indonesian government would one day allow Netflix to operate there in order that he could sell content to the new media giant, especially as the Western company was aggressively expanding across the Asia market and seeking out new avenues for content. “The impact of the internet has been a positive for the TV industry,” said Fernando Audy. “It lets you reach those who don’t watch linear TV.”

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