Hong Kong, 24 October 2006 – The Cable and Satellite Broadcasting Association of Asia (CASBAA) and Standard Chartered Bank (Hong Kong) Limited (Standard Chartered) today released the Cost of Pay-TV Piracy study for the Asia Pacific region for 2006. The CASBAA Pay-TV Piracy Report 2006 was conducted by CASBAA in collaboration with its member organisations and assistance with validation of the findings from the Creative Industries Division of Standard Chartered specialising in the media & entertainment sector.
This is the fourth annual survey of the issue covering the various types of pay-TV piracy in markets including Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam and this year’s new additions, Australia and Macau. The study highlights the impact of pay-TV signal theft and unlicensed pay-TV operators on regional economies amid new technological developments.
The study estimates that the cost of pay-TV piracy in the region increased from US$1.06 billion in 2005 to US$1.13 billion in 2006. For four consecutive years the cost of pay-TV piracy has risen and in 2006 the number of illegal subscriptions across Asia Pacific is estimated to have increased by 20% in 2006 to 5.2 million connections.
The Report also highlights that pay-TV piracy will result in an estimated tax revenue loss of US$158 million to the region’s governments in 2006. In particular, the piracy situation in India, Hong Kong and Vietnam continues to worsen.
“Pay-TV piracy should raise an alarm not only in the pay-TV industry, but also for a range of Asian governments,” noted Mr Lee Beasley, Head of Media and Entertainment, Standard Chartered. “Having said that, we believe the pay-TV market still presents huge potential for growth.”
According to CASBAA, the rate of growth in the dollar value of pay-TV revenue leakage has slowed slightly, while the number of illegal connections across the region has jumped 20% and more markets are demonstrating worrying signs of serious revenue loss.
“As a result of this, pay-TV piracy is possibly the number one issue facing the entire industry in the Asia Pacific. Meanwhile, CASBAA will continue to work with the industry, regulators and the community at large to improve the situation,” said Mr Simon Twiston Davies, Chief Executive Officer of CASBAA.
In 2006, CASBAA has undertaken lobbying of governments in numerous markets and continued with legal actions against pirate operators and the commercial distribution of unauthorised signals in bars and clubs.
The new study estimates that the cost of pay-TV piracy in Hong Kong for 2006 will be US$32.4 million (HK$252.72 million), a hike of 29% over last year. “This could have a genuine impact on Hong Kong’s reputation as an intellectual property rights hub,” said Mr Twiston Davies.
According to CASBAA, the rising level of Hong Kong losses can be partly attributed to increases in illegal set-top box use and to satellite overspill reception, as this year’s World Cup energised sales campaigns by criminal pirate syndicates.
Leading the region in dollar terms, India’s pay-TV revenue leakage has reached a massive US$685 million in net losses. The grey market deficit in India, due to “under-reporting” by “last mile cable operators”, has grown from US$632 million in 2005 to US$667 million in 2006.
Thailand also suffers from a rising cost of pay-TV piracy, at US$160 million, the second largest dollar loss in the region comprising an alarming 1.27 million unauthorised connections.
Other markets facing an uphill pay-TV piracy battle include Vietnam and the Philippines. The “greenfield” market of Vietnam has the worst ratio of piracy in the region with one legal pay-TV subscriber to 15 illegal connections. According to this year’s study, there are 90,000 authorised subscribers in Vietnam compared to 1.37 million illegal subscribers.
“The piracy issue notwithstanding, the pay-TV industry in Vietnam is growing fast and represents enormous potential. CASBAA has advised industry players to work together with the Vietnamese authorities to correct the situation as soon as possible,” said Mr Twiston Davies.
In the Philippines, there are few signs of improvement, with the number of illegal pay-TV subscribers increasing to 887,000. The estimated net piracy cost due to illegal distributors, largely in the provinces, has risen by 24% this year.
Despite being a fast-growing pay-TV market, Indonesia is suffering from a revenue leakage of US$23.8 million as government and industry insiders indicate a substantive piracy growth.
Macau, covered by the study for the first time, has the unenviable distinction of having the region’s second highest piracy rate with 10 pirated connections for every one legal subscriber. Last year the Macau government announced measures to deal with the problem, but to date the wholesale piracy of international content continues to be rampant.
Singapore is the only market covered by the Report that brings good news to the industry this year. As a result of the ongoing digitisation of the cable network, the number of pirated pay-TV subscriptions remains low. The piracy issue appears to be under control, with a 15.8% decline in pay-TV piracy cost.
“Nevertheless, more action is required from governments ¨C even the good ones ¨C to counter the corrosive effects of piracy on the pay-TV and related industries,” said Mr Twiston Davies.
Standard Chartered and CASBAA will release the full results of the latest pay-TV piracy study on October 25th at the Academy for Performing Arts in Hong Kong. A CASBAA Convention 2006 session on pay-TV piracy will feature a presentation by John Medeiros, the CASBAA VP for Government Relations and Regulatory Affairs, who will look at the value of cooperation between government and the pay-TV industry and review challenges facing governments and industry.
The CASBAA Convention 2006 is Asia’s premier broadcasting event. Tagged “From Bandwidth to Brandwidth”, the CASBAA Convention 2006, to be held from 24 to 27 October, is poised to shed light on using advancements in digital technologies to maximise the value of newly-available communications bandwidth for sophisticated brand development, innovative marketing and premium content.
Standard Chartered – leading the way in Asia, Africa and the Middle East
The history of Standard Chartered in Hong Kong dates back to 1859. It is currently one of the SAR’s three note-issuing banks. Standard Chartered incorporated its Hong Kong business on 1 July 2004, and now operates as a licensed bank in Hong Kong under the name of Standard Chartered Bank (Hong Kong) Limited, a wholly owned subsidiary of Standard Chartered PLC.
Standard Chartered PLC is listed on both the London Stock Exchange and the Stock Exchange of Hong Kong and is consistently ranked in the top 25 among FTSE-100 companies by market capitalisation.
Standard Chartered has a history of over 150 years in banking and is in many of the world’s fastest-growing markets with an extensive global network of over 1,200 branches (including subsidiaries, associates and joint ventures) in over 50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the Americas.
As one of the world’s most international banks, Standard Chartered employs almost 50,000 people, representing over 90 nationalities, worldwide. This diversity lies at the heart of the Bank’s values and supports the Bank’s growth as the world increasingly becomes one market.
For more information on Standard Chartered, please log on to www.standardchartered.com
STANDARD CHARTERED DISCLAIMER:
The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to accuracy or completeness. While all reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors of fact or for any opinion expressed herein. We do not undertake to advise you as to any change of our views. This is not a solicitation or any offer to buy or sell.
About CASBAA (www.casbaa.com)
The Cable & Satellite Broadcasting Association of Asia is an industry-based advocacy group dedicated to the promotion of multi-channel TV via cable, satellite, broadband and wireless video networks across the Asia-Pacific. CASBAA represents some 110 Asia-based corporations, which in turn serve more than three billion people. Members include Asia Broadcast Satellite, Australia Network, ABN AMRO, Asia Broadcast Satellite, AETN International (History Channel), AsiaSat, Astro (Malaysia), Bloomberg Television, Comverse, Chunghwa Telecom, Discovery Networks Asia, Granada, EMC, HBO Asia, IBM, Macquarie Bank, MTV Networks Asia Pacific, Nokia, now TV, PricewaterhouseCoopers, Sony Pictures Television International, STAR Group, Sun Microsystems, Turner International Asia Pacific, UBC (Thailand), Walt Disney Television International, Zonemedia, Anytime, BBC Global Channels, BBC World, Celestial Movies, CSM TNS, ESPN STAR Sports, Eurosport, Hallmark Channel, Hong Kong Cable, Intelsat, Irdeto, Harmonic, Lovells, MEASAT, Motorola, National Geographic, Paul Weiss, Playboy TV, Seagate, Sky News Australia, Standard Chartered Bank, Synovate and TimeWarner.
For further information, please contact:
Liza Ng / Sovanna Fung
iPR communications
Tel: +852 3178 9010 / 2131 8962
Fax: +852 2131 8955
Email: lizang@iprcomm.com.hk
sovannafung@iprcomm.com.hk
Rebecca Kennedy / Katie Wong
Communications, CASBAA
Tel: +852 2854 9913
Fax: +852 2854 9530
Email: pr@casbaa.com