India tops in pay TV piracy in Asia

By SiliconIndia   |   Tuesday, 26 October 2004, 07:00 Hrs
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HONGKONG: Asia's pay TV industry is expected to lose $970 million to piracy in 2004, with India's fragmented system of grey market operators accounting for more than half the total, according to a Cable and Satellite Broadcasting Association of Asia (CASBAA) survey released on Tuesday.

The 2004 figure compares with $874 million in lost revenue last year, the first year CASBAA conducted its survey.

But while the figure is up 11 per cent year-on-year, the rise is more indicative of better measurement methods and less of an actual increase, said CLSA's media and entertainment investment banking head, Simon Dewhurst.

"The message is ... we're getting better at detecting where this piracy problem is," Dewhurst said at a media briefing to discuss the study. "Across the region, (losses due to pay TV piracy) are quite static. It's getting better in some markets, worse in others."

Within the region, India accounted for 58 per cent of total revenue leakage, or $565 million worth.

The lion's share of that is a direct result of the country's highly fragmented industry, where many major operators are unable to monitor the activities of smaller companies that control much of the so-called "last mile" access to homes.

Pay TV piracy comes in many forms, but often involves the illegal installation of decoders and set-top boxes to receive cable or satellite service, or the sale of service by companies that obtained signals illegally.

Thailand was the second worst, with $141 million in lost revenue, followed by Taiwan ($114 million lost), the Philippines ($70.4 million lost) and Vietnam ($26.4 million lost).

Those markets are characterised by better-known problems, such as signal theft from local cable or satellite operators.

Dewhurst said the situation is improving in India as the market consolidates, while it is getting worse in Vietnam, the Philippines and Thailand.

"Market by market, the situation is slightly different," he said, adding that piracy will cost local governments $152 million in lost tax revenues this year.

Dewhurst said that pay TV piracy in Asia, while a problem, is still relatively small compared with the estimated $14 billion in revenues that regional operators collect each year.

"Piracy is a direct attack on a Government's ability to be able to argue they have a robust approach to intellectual property protection in the market. The pay TV industry is not facing a crisis as far as piracy is concerned."

Some of the region's biggest pay TV providers include Singapore's StarHub , Hong Kong's I-Cable Communications , Malaysia's Astro and News Corp's Star Group, which has a major presence in India.

The magnitude of the pay TV theft is roughly comparable in dollar terms to movie piracy, which is also a major problem in many Asian markets.

Pirated movies cost the world's major studios an estimated $718 million last year, according to the Motion Picture Association. Within that figure, China was the biggest culprit accounting for about a quarter of the losses.

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