Illegal TV boxes imperil OTT revenue

The nation’s over-the-top (OTT) service providers in 2018 lost more than NT$28.3 billion (US$920.62 million at the current exchange rate) in revenue, due to rampant use of illegal set-top boxes from China, a survey released by the Institute for Information Industry and the Taiwan OTT Association showed.

The Cable Broadband Institute of Taiwan (CBIT) said that copyright infringement involving illegal set-top boxes could cause cable and OTT operators to lose revenue of more than NT$50 billion per year should the losses continue to expand at a rate of 15 percent annually.

“Copyright infringement also affects cable channels’ advertising revenue and people’s willingness to subscribe to cable services,” institute director-general Peng Shu-fen (彭淑芬) said on Saturday.

“We have estimated that the cable subscription revenue would drop by NT$600 million per year should the number of cable subscribers decrease by 100,000 annually,” Peng said.

“Cable channel operators would lose NT$860 million of advertisement revenue. We have yet to calculate the losses that would be sustained by peripheral businesses of the cable television industry,” she added.

There are two main types of copyright infringement involving the use of illegal set-top boxes, Peng said.

The first involves devices built into television sets and linked to online platforms that air unauthorized content, while the second involves set-top boxes that are leased to users, enabling them to watch pirated content, she said.

Watching illegal content could create national security and cybersecurity risks, Peng said.

“People can watch Chinese programs through illegal set-top boxes and their personal data could be stolen,” she said, adding that some of the content involved pornography, violence and online gambling.

While the government has vowed to tackle copyright infringement, it has yet to offer an effective solution that involves its agencies, she said.

Peng said that as most copyright cases are settled in court, industry representatives hope that the legal system will expedite the review of the cases to reduce financial losses in the sector.

Copyright infringement has evolved into organized crime, National Communications Commission Vice Chairman Wong Po-tsung (翁柏宗) said.

“You have one group in charge of selling set-top boxes and another group in charge of obtaining content illegally,” he said.

“Servers of such operations are often located in residential areas. If caught, the groups can easily rebuild servers with newly purchased equipment. It is not easy to catch them, but we continue to offer technical assistance to help crack down on copyright infringement,” he added. Taipei Times