Piracy will kill sports

Choong Kay Lee, vice-president and chief of sports business at Malaysian broadcaster Astro, calls on his government to help battle piracy in an article which resonates worldwide.

The numbers are alarming. The consequences are damaging.

Yet mere lip service has been paid to the fight against piracy for far too long and the government needs to recognise it as a national threat.

Piracy has hurt the entertainment, broadcasting and gaming industries for decades – from the sale of pirated CDs and DVDs of box office movies to downloading latest television series, songs or games via torrents. With advances in technology, the go-to pirated platforms today are illegal streaming devices (ISDs), applications, file sharing and social media streaming.

According to MUSO’s Global Film and TV Insight Report, online piracy cost an estimated MYR2.27m (€491,000/$541,000) in revenue opportunity loss to the Malaysian economy and MYR330m in taxes to the government in 2017. In 2016, the losses were estimated at MYR1.05bn in revenue, MYR157m in taxes and over 1,200 jobs. According to sources, there were approximately 42,000 illegal streams during the 2018 Fifa World Cup in Russia.

A recent survey by market research firm YouGov, on behalf of Asia Video Industry Association’s Coalition Against Piracy, revealed at least 23 per cent of Malaysian online consumers use a television box device. The survey also found 50 per cent of these consumers had accessed streaming websites or torrent sites without paying. This is where legitimate broadcasters suffer.

Of those using ISDs, nearly 64 per cent of respondents said they had cancelled their subscription to some or all of the legal pay-television services they previously had. ISDs are enjoyed by 18- to 24-year-olds, with 76 per cent of them cancelling legitimate subscription services.

Revenues for broadcasters have been impacted with viewers accessing ISDs for free, it will further hurt the industry in years to come. Sports used to be the key driving content for any paid television business but today, no thanks to piracy, the number of subscriptions has been reduced, causing loss of revenue.

The league and rights owners are feeling the impact too. Rights fees for sports content in Southeast Asia has been declining because of piracy. Why does a broadcaster need to pay for premium exclusive content when it is available for free elsewhere? Even snippets of live sporting matches are available on social media.

It is simple economics. The production cost for live sporting events like the Fifa World Cup and Premier League are high. If the consumer is not paying, the broadcaster is unable to pay the rights owners (i.e. the football clubs). If that happens, football clubs will not be able to pay their players and invest in facilities and youth development, among others. The sport will then suffer and fans will have to live with a lower quality product.

Legitimate broadcasters pay huge sums to air such content only to lose out to pirates or who do not invest in the game and sports.

Astro has repeatedly, over the years, called for combating piracy in a big way.

We have worked with the authorities and our peers. They include coordinating and collaborating with the Malaysian Communications and Multimedia Commission (MCMC) to host the Kuala Lumpur Digital Content Anti-Piracy Summit held earlier this year, speed up the process of blocking websites and assisting international copyright owners to lodge complaints directly to the Domestic Trade and Consumer Affairs Ministry.

The company has also lodged complaints on ISDs and content infringement to MCMC and the ministry and participated in the amendments of the Copyright Act 1987. We continuously engage with MCMC, the ministry and other regulators on blocking mechanism terms.There have been some positives seen through these collaborations.

The turnaround time for websites to be blocked have been reduced, between 48 and 72 hours but this is not effective for live sports. Actions have been taken on, complaints lodged and the Malaysian government acknowledges digital piracy is rampant.

But more must be done to eradicate this menacing plague.

In Malaysia, there are challenges with legislation. The enforcement of intellectual property rights comes under the Domestic Trade and Consumer Affairs Ministry but matters regarding piracy online fall under the Communications and Multimedia Ministry, specifically MCMC. There must be efforts to form a centralised body comprising the ministry, MCMC, CyberSecurity Malaysia, police and the Intellectual Property Corporation of Malaysia to address digital piracy.

There must be an increase in enforcement and prosecutions against ISD operators and those who infringe copyright laws. There should also be an increase on public awareness programmes, publicising the prosecution and enforcement work carried out by the authorities.

A mandatory guideline for all e-commerce platform owners should be developed to ensure they do not promote or trade illegal products or offer illegal services.

The cooperation from Internet service providers (ISPs) is extremely important. Without their support, any effort against the pirates will be a waste of time.

Every dollar spent on legal broadcasters like Astro contributes to more than just providing the coverage for a live sporting event. Our initiatives include allowing subscribers and fans to meet and greet their sporting heroes and promoting grassroots development as seen through Astro Kem Badminton (badminton camp).

These initiatives are re-investments of the revenue from the business while revenues from pirated platforms fund illegal activities – from prostitution, smuggling, to even terrorism.

The only way to fight pirates is for broadcasters, ISPs, regulators, rights owners and other stakeholders to collaborate. Otherwise, the war against piracy will remain lip service.
If left unaddressed, sports and eventually the fans will suffer.