SINGAPORE (Dec 11): The Coalition Against Piracy wants the Singapore government to do something about set-top boxes that allow users to watch content without paying traditional distributors such as StarHub and Singapore Telecommunications. In a Dec 3 report, Bloomberg quotes CAP general manager Neil Gane as saying that “within the Asia-Pacific region, Singapore is the worst in terms of availability of illicit streaming devices (ISDs)”.

These set-top boxes, easily available at Sim Lim Square, are not illegal. Most run Android software and can be plugged into a TV, allowing users without a smart TV to watch YouTube or Netflix on the big screen. But users can also download apps to watch pirated broadcasts of English Premier League football matches, or movies and TV serials available on the internet. The legality of those apps is questionable, and CAP is lobbying for action on such software.

CAP’s 21 members, which include divisions of Sony and 21st Century Fox, may be better off investing in new content distribution strategies. While piracy is unquestionably wrong, content owners and distributors should consider the possibility that it is technological disruption that is threatening their business models — not thieves. Regulatory action is no match for new technologies.

Bryan Tan, a partner at law firm Pinsent Masons, points out that the content industry had some years ago lobbied intensely for tougher laws on online piracy. In 2014, the Singapore government amended the Copyright Act to allow owners of copyrighted material to get internet service providers to block infringing sites.

“Here we are, a couple of years down the road, and only one order has been given to block a site in that time,” Tan says. “Now, we see them coming again and saying more needs to be done. But what is wrong with this law that you fought so hard for in the first place, that you didn’t want to use it? Is the same thing going to happen this round? These are questions to be asked.”

Tan also highlights the high pay-TV penetration rate here. As at end-September, Singtel had 404,000 pay-TV customers while StarHub had 467,000. That amounts to nearly 70% of households. “There is a small percentage of people who will never get a pay-TV subscription and some people probably are just too poor, which means that almost everybody else has one,” Tan says. So, if it is true that Singapore is a hive of piracy, it means that the population isn’t being adequately served by the current ecosystem. “It is almost as though people here have paid for a hotel buffet, but are sneaking out to McDonald’s to eat. Very mysterious.”

Vignesa Moorthy, CEO of internet services provider ViewQwest, says his customers want on-demand content but cannot get it. “If you compare Asia with [developed markets such as the US], content is not as available. In absence of content, people will resort to piracy to gain access,” he says. “The reality of it is there’s nothing particularly exciting to watch on cable TV.”

If content owners want piracy to stop, Moorthy says, then content should be made available online at a reasonable price. He points to the success of affordable and innovative services from players such as Netflix and in the US, and the growing popularity of such services around the world. During peak hours, about 20% of ViewQwest’s traffic goes to Netflix and about half to YouTube.

Moorthy says at least half of ViewQwest users are currently paying an additional monthly fee to use ViewQwest’s Freedom DNS service, which makes it possible to access US-only streaming services such as Hulu and HBO Now. “We created the Freedom DNS service to address the issue of lack of content,” he says, adding that he would be happy to see demand for Freedom DNS fall if more streaming services are made available here. “Potentially it would be an erosion of revenue for us, but as more people need more broadband for access to content, it should balance out.”

CAP’s Gane, however, says the industry has already adapted significantly to the digital revolution. “We are witnessing a wave of intense innovation in legitimate video content supply, with new combinations of services, bundles and prices giving consumers far greater choice than they enjoyed a short time ago. In other words, the industry is adapting its content distribution business by using available technology to provide greater choice and a more expedient service,” he says in emailed comments to The Edge Singapore.

“We think the number and nature of services will continue to expand — as long as the market is not pre-empted by the crime syndicates. We note that legal over-the-top services in Singapore have a market share of 6%, while 14% of Singaporeans already admit to having a pirate ISD box. Innovative services cannot succeed where piracy reigns,” Gane adds. “We are competing with crime, not with technology. Just as global and regional legitimate content players have entered the Singapore market, crime syndicates behind illegal services, which provide access to unauthorised content via ISDs, are multiplying and achieving substantial market penetration.”

Gane says, ultimately, consumers are just looking for a free ride. He cites data from consultancy Sycamore Research showing that 40% of Singaporeans actively turn to illegal streaming, ripping and peer-to-peer sharing. Two-thirds of them said their main reason for breaking the law was to get the content for free.

This article appears in Issue 809 (Dec 11) of The Edge Singapore which is on sale now

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