CASBAA Report: Pay-TV Piracy to Top $1.5 Billion for 2007

HONG KONG, October 31: A
new report from the Cable & Satellite Broadcasting Association of Asia
(CASBAA) and Standard Chartered Bank has found that piracy has cost the pay-TV
industry in Asia $1.54 billion in lost revenues, up from $1.13 billion a year
ago.

The 2007 survey of pay-TV
piracy covers Hong Kong, India, Indonesia, Malaysia, the Philippines,
Singapore, Taiwan, Thailand, Vietnam, Australia, Macau and this year’s
addition, Pakistan. The report highlights the impact of pay-TV signal theft and
unlicensed pay-TV operators on regional economies amid new technological
developments.

The developing pay-TV
market in Pakistan currently has losses that stand at $110 million. Estimates
show that there were 4.6 million pirated cable-TV subscriptions in Pakistan,
with some 345,000 legitimate subscriptions to pay-TV services.

Excluding Pakistan, the
regional figure stands at $1.43 billion, representing a 26-percent increase in
lost revenues. The report also highlights that at least $213 million is being
lost in unpaid tax revenues across the region this year.

CASBAA also revealed that
the cost of pay-TV piracy in Hong Kong for 2007 has decreased by 15 percent to
$27.4 million (HK$213.72 million), although the number of hacked connections
remained unchanged. “The fall in the ‘lost revenue’ number is attributed to the
reduced cost of a pay-TV subscription in Hong Kong thanks to increased
competition in the market,” said Simon Twiston Davies, the CEO of CASBAA.

Meanwhile, a large part of
the rise in total revenue losses for 2007 can be attributed to a 20 percent
U.S. dollar re-alignment against the Indian rupee. According to CASBAA, India
is a market with 73 million pay-TV connections, but suffers from heavy-handed
government regulation that has created a lack of investment in infrastructure.
India’s pay-TV revenue leakage reached $985 million in net losses in 2007, an
increase of 44 percent over 2006.

“Nevertheless, the India
pay-TV market is the most distorted in Asia thanks to what can only be
characterized as structurally-based revenue leakage,” added Twiston Davies.

With 1.32 million
unauthorized connections, Thailand continues to suffer annual piracy losses in
the range of $180 million, the second largest dollar loss in the region. CASBAA
notes that, despite a slight improvement in the approach to intellectual
property rights by some cable operators in the Thai provinces, there has been a
growth in illegal Internet-based card-sharing via remote servers for DTH
services.

CASBAA has continued to
lobby governments and has extended legal actions against commercial
distributors of unauthorized signals in public venues in Hong Kong and against
pirate operators in the Philippines. The Hong Kong actions have been
successfully concluded while the issues in the Philippines remain in court.

On a more positive note,
the report found that there was a dramatic drop in the number of illegal
connections to pay-TV channels in Vietnam, where the value of industry losses
has fallen from $38 million in 2006 to $10 million this year.

—By Irene Lew