Pay-TV Operators Continue Fight Against Piracy

By | February 14, 2008 | Broadcasting, Feature

[Satellite News – 2-14-08] With the news that the German pay-TV operator Premiere‘s encryption system has been compromised, the issue of piracy in the pay-TV arena has come back into the spotlight.
    Premiere said Feb. 6 that missed its forecasts due to the breached of the conditional access system supplied by the Kudelski Group. Kudelski has agreed to replace the security cards.
    Satellite pay-TV operators around the globe lose huge amounts of revenues each year as people access pay-TV services illegally. Two of the organizations leading the fight against piracy are the European Association for the Protection of Encrypted Works and Services (AEPOC) and the Cable & Satellite Broadcasting Association of Asia (CASBAA). Satellite News spoke to AEPOC President Jean Grenier and CASBAA CEO Simon Twiston Davies about the piracy threat.

Europe

Grenier is confident that authorities are getting to grips with the organizations behind piracy initiatives and points to several recent cases that offer the industry optimism.
    “In Portugal, a case of a cardsharing ring of dealers being broken up as well as a sentence against a trafficker of piracy equipment — the latter expected to go to jail — do demonstrate the high awareness and good success rate of national law enforcement and the relatively harsh reaction of judges to also consider imprisonment as a lawful punishment for this type of crime,” Grenier said. “The Portuguese Judiciary Police is one of the most active bodies in the EU (European Union) and has achieved many different searches against pirates during 2007. We can be sure to hear more from them.”
    Grenier also highlighted a case in Australia, where a company called The Mod Shop was found to be providing satellite-TV users with equipment to access pay-TV services without authorization. The government has ruled that programmed smart cards as well as cardsharing hardware and software are illegal “broadcast decoding devices,” which according to AEPOC, made this the world’s first sentence against cardsharing piracy possible, resulting in fines of more than 1 million Australian dollars ($901,000).
    “The verdict in Australia is highly interesting because it was the first major worldwide case in regards to this form of piracy – exchanging illegally keys over the Internet,” Grenier said. “So we may see that this case in Australia does provide a learning effect on EU law enforcement and lawmakers — at least demonstrating that cardsharing can be detected and attributed to commercial dealers or private persons that need to be punished accordingly.”
    While a strict law enforcement approach is good news for the satellite industry, “considerable amounts of money are still being lost due to piracy. While [conditional access] and [digital rights management] systems are getting stronger and stronger, the main issues rest in legacy systems that may provide loopholes for pirates,” Grenier said. “In terms of revenues lost. we cannot comment on any specific operator but AEPOC estimates that more than one billion euros ($1.5 billion) is spent in the EU on piracy equipment by users each year, and the detrimental effects on the industry are always bigger than these gains of the pirates.”
    However, Grenier believes 2007 was a good year in the battle against piracy. “We certainly do think that especially during 2007 relevant steps ahead have been made to effectively fight audio-visual piracy,” he said. “Not only in terms of the development of the legal framework in the EU, but more importantly in regards to the practical side of things: law enforcement. National European enforcement entities can be characterized as highly sensitised, considering audio-visual piracy as a very detrimental crime nowadays. The result is that we have seen many successfully conducted raids and court sentences lately bringing down heavy dealers. Besides the dissuasive effect this must have on other piracy circles and also consumers that may be inclined to use piracy equipment.”
    But there remains plenty of work to be done. “It will be very important to see within the revision process of the Conditional Access Directive … that also the private use of piracy equipment, tools or services is considered illegal,” he said. “Some countries, for example the U.K., France and Italy, already have such provisions thanks to completing national legislation but there are a number of countries that may still be characterized as sort of safe harbors for pirates.”

Asia

    In Asia, piracy also continues to be a problem for many operators. “The problem of piracy is serious in Asia, destroying the value of pay-TV video content, sapping the industry’s vitality and often deterring new investment,” Twiston Davies said. “For year-end 2007, CASBAA estimated that piracy had cost the market well in excess of U.S. $1 billion in revenues. Thailand and the Philippines are the worst-hit jurisdictions in Asia. Piracy in Indonesia, unfortunately, is also rapidly rising, and China’s burgeoning Internet industry is also a great source of concern given that rampant piracy is undermining the legitimate pay-TV and fast-leaking to rest of the region. Thus, without strong regime of intellectual property rights, the development of satellite-supported video distribution remains under persistent threat.”
    This is particularly important due to the size of some of the markets as well as the potential growth opportunities for satellite pay-TV operators. “According to our research there are less than 20 DTH (direct-to-home) platforms across Asia, along with only about 14 million DTH subscribers,” Twiston Davies said. “The growth opportunities are huge. For instance, the DTH subscription market in India represents less than 5 percent of today’s pay-TV subscriber base of more than 60 million cable households. … The Indonesia DTH market represents less than 1 million subscribers out of the total 40 million TV households across 17,508 islands. It’s the same story in the Philippines, with well below 100,000 DTH subscribers. Meanwhile, in India, we still wait for the launch of two new DTH platforms sometime this year. The upside for DTH services can only be very positive in a regional economy that is growing by almost 10 percent per year.”

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