HONG KONG: In the latest survey of revenue leakage suffered by the regional pay TV industry, conducted by the Cable & Satellite Broadcasting Association of Asia (CASBAA) and Standard Chartered Bank, the losses are conservatively estimated at $1.54 billion, compared to $1.13 billion in 2006. The report was released on Wednesday on the sidelines of the ongoing CASBAA Convention being held here.
While the China market remains uncharted territory for the annual estimates, this year the newly developing pay TV market in Pakistan has been added to the calculations, with losses standing at $110 million. Estimates for Pakistan’s unauthorised market show 4.6 million pirated cable TV subscriptions with some 345,000 legitimate subscriptions for pay TV services.
Excluding Pakistan, the regional figure stands at $1.43 billion, up $300 million, representing a 26 per cent increase in lost revenues compared to 2006.
Meanwhile, the cost of pay TV piracy in Hong Kong for 2007 has decreased by 15 per cent to $27.4 million, although the number of hacked connections remained unchanged. “The fall in the ‘lost revenue’ number is attributed to the reduced cost of pay TV subscriptions in Hong Kong, thanks to increased competition in the market,” explained Simon Twiston Davies, CEO, CASBAA.
Meanwhile, a large part of the rise in total revenue losses for 2007 could be attributed to a 20 per cent dollar realignment against the Indian rupee. “Nevertheless, the India pay TV market is the most distorted in Asia, thanks to what can only be characterised as structurally-based revenue leakage,” said Twiston Davies.
According to CASBAA, India was a market with 73 million pay TV connections, yet it suffered from severe government regulation which, in turn, had created a debilitating lack of investment in infrastructure. India’s pay TV revenue leakage reached a massive $985 million in net losses in 2007, an increase of 44 per cent over 2006.
While the rest of the world is benefiting from digital roll-outs, Indian consumers have no opportunity to enjoy these fruits. “The systemic shortfall in analogue revenues from local cable operators is a major part of the problem,” observed Twiston Davies.
The 2007 survey of pay TV piracy in Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam, Australia, Macau and this year’s addition, Pakistan, highlights the impact of pay TV signal theft and unlicensed pay TV operators on regional economies amid new and challenging technological developments.
“The pay TV piracy situation in most of the big markets in the region needs to be seriously addressed, not just by the industry but also by the government,” said Lee Beasley, Head of Media & Entertainment, Standard Chartered Bank. “Nonetheless, the fact that legitimate paid subscriptions are seeing an average 10 per cent growth is a positive sign of the vast potential for the Asia Pacific pay TV industry.”
With 1.32 million unauthorised connections, Thailand continues to suffer annual piracy losses in the range of $180 million, the second largest dollar loss in the region.
CASBAA noted that despite a slight improvement in the approach to intellectual property rights by some cable operators in the Thai provinces, there had been a disturbing growth of an emerging and important phenomenon, that of illegal Internet-based card-sharing (via remote servers) for DTH services.
“This is a relatively new and sophisticated technical hack that boosts the vulnerability of DTH services to piracy. This needs to be watched carefully and highlights the need for industry vigilance and continued investment in technical protection supported by stringent legal sanctions,” said Twiston Davies.