The 2007 survey covers Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam, Australia, Macau and Pakistan. China is not yet included in the CASBAA calculations. Pakistan was added this year.

“There is still a wide disparity in the amount of piracy in the 14 markets where CASBAA operates,” says Simon Twiston Davies, CEO of CASBAA. "Generally the more mature markets have taken a strong stand against pay-TV piracy."

"Some governments are actually very proactive, while others are still in need of education on the benefits of the deployment of communications infrastructure," Twiston Davies says.

“The fact that legitimate paid subscriptions are seeing an average 10 percent growth is a positive sign of the vast potential for the Asia Pacific pay-TV industry,” says Lee Beasley, Head of Media and Entertainment of Standard Chartered Bank.

“Some of the piracy methods being used in the regions have technical solutions,” says Twiston Davies. “But we also need regulatory support at every level – in addition to the determination not to tolerate piracy in any form.”

Mature markets; negligible piracy

On the positive end of the spectrum Twiston Davies singles out Japan, Korea and Singapore. “In these countries piracy or signal theft is not a measureable problem,” he says.

“But the pay-TV piracy situation in most of the large, emerging markets in the region needs to be addressed seriously, not just by the industry but also by individual governments,” Beasley says.

The real problems are in countries like Thailand, Vietnam, and Pakistan. CASBAA reports that at least $213 million in unpaid tax revenues was lost across the region in 2007.

Several countries illustrate the general trends in the region:

Hong Kong. The cost of pay-TV piracy in Hong Kong for 2007 decreased by 15 percent to $27.4 million (HK$213.72 million), although the number of hacked connections remains unchanged. “The fall in the ‘lost revenue’ number is attributed to the reduced cost of a pay-TV subscriptions in Hong Kong. Costs have gone down because of increased competition,” Twiston Davies says.

Where pay-TV piracy flourishes

Thailand. With 1.32 million unauthorized pay-TV connections, Thailand continues to suffer annual piracy losses in the range of $180 million, the second largest dollar loss in the region, according to the study.

Despite a slight improvement in the approach to intellectual property rights (IPR) by some cable operators in the Thai provinces, the CASBAA survey notes that there has been a disturbing growth of illegal Internet-based card-sharing (via remote servers) for Direct to Home (DTH) services.

“This is a relatively new and sophisticated technical hack that boosts the vulnerability of DTH services to piracy. This needs to be watched carefully and highlights the need for industry vigilance and continued investment in technical protection supported by stringent legal sanctions,” Twiston Davies says.

Vietnam. The most positive news in the survey is a dramatic decrease in the number of illegal connections to pay-TV channels in Vietnam, where the value of industry losses has fallen from $38 million in 2006 to $10 million this year.

“The improvement is almost exclusively due to the removal of pirated international channels from the lineup offered by Vietnamese operator VTC,” Beasley says. Twiston Davies adds that VTC reached 1 million pirated boxes that were receiving satellite broadcasts for free. “The Vietnamese authorities finally clamped down on them and they are now playing by the rules,” he says.

The current situation in Vietnam indicates that governments can respond to pressure from non-governmental organizations.

“When this happens it helps bring some enlightenment to the market. In the case of Vietnam, where the pay-TV market is growing at an annual rate of 10-15 percent, the importance of IPR is now recognized. This is in a market that was virtually unregulated just a few years ago,” Twiston Davies says.

Pakistan. Estimates for Pakistan’s unauthorized market show 4.6 million pirated cable TV subscriptions in a market with only 345,000 legitimate subscriptions to pay-TV services. Losses in revenue due to pay-TV piracy stand at $110 million.

India. According to the CASBAA survey, India has 73 million pay-TV connections, yet it suffers from heavy-handed government regulation which has created a debilitating lack of investment in infrastructure. India’s pay-TV revenue leakage reached a massive $985 million in net losses in 2007, an increase of 44 percent over 2006.

Meanwhile, a large part of the total revenue losses for 2007 can be attributed to a 20 percent US dollar realignment against the Indian rupee. “Nevertheless, the Indian pay-TV market is the most distorted in Asia because of what can only be characterized as structurally-based revenue leakage,” Twiston Davies says.

While the rest of the world is benefiting from digital roll-outs, Indian consumers are not. “The systemic shortfall in analog revenues from local cable operators is a major part of the problem,” Twiston Davies says.

"As an industry, we are disappointed in Indian regulators. I think they need to adopt a more positive approach so that there will be money to invest in infrastructure and in content protection," Twiston Davies says.

He explains that the overall approach in India is “to put price caps in place. This makes it difficult for broadcasters and MSOs to invest in content protection.” Rates are frozen and unrealistic ceilings are placed on pay-TV services. “These measures have blocked the ability to offer international content. It has even made it difficult to provide premium domestic content,” Twiston Davies says.

To make the situation worse India has different sets of regulations for cable, for satellite, for IPTV and for mobile TV. “There is no reason for government to be involved in this any more than they should be involved in the price of a DVD sold in stores,” he says.

What about the future?

“What is essential to every market is content protection,” Twiston Davies says. “CASBAA recognizes this as does every responsible participant in the Asia Pacific markets: Content protection must be part and parcel of the digital infrastructure. It needs to be one of the bases of copyright legislation and broadcast licensing legislation because this is what enables the entire pay-TV industry to get a return on their investment.”

“Fighting against pay-TV piracy goes beyond economics and increased tax revenues,” he says. “In order for a nation’s economy to flourish, the value of intellectual property rights is a given,” Twiston Davies says. “IPR encourage the growth of the local and regional communications markets and this encourages strong economic growth,” he says.

For more information:

CASBAA