Content in the Sky and in the Cloud: It’s Not Free


The news that Chinese technology company GoTech was “disinvited” from the International Broadcasting Convention (IBC) trade show in the Netherlands last month after conditional access technology provider Nagravision won a $100 million lawsuit against the Chinese company in Texas for manufacturing set top boxes designed to circumvent access controls for Pay-TV platforms brought back memories of the long saga fought by satellite providers in Canada to stop illegal accessing of DirecTV’s satellite signal by Canadians. Given that DirecTV is not licensed to distribute content in Canada, a variety of devious means were used to “trick” the system into believing that the Canadian subscriber resided in the US, usually aided by middle-men who exploited the grey market by setting up accounts in the US, and then selling them in Canada. Given the footprint of DirecTV’s satellite, the signal is easily received in many parts of Canada. It required some technical tweaking to ensure the receiver was properly tuned, but that was part of the “service” provided.

Needless to say, this end run on the stringent Canadian licensing regime was not appreciated by the Canadian satellite providers who were subject to it, given that DirecTV did not have to meet Canadian content requirements and other licensing conditions. Going back more than ten years, both DirecTV and Canadian providers took actions to curtail this commercial-scale piracy, although the practice has still not been fully stamped out. The wide-scale pirating of US satellite programming has dropped but the problem has not gone away; rather it has morphed to other forms of access, such as Internet streaming, as the Nagravision lawsuit shows. Content targeted at or licensed for specific markets is being illegally accessed in both those markets and in other markets for which it was not intended. The Asian satellite and pay-TV association CASBAA (Cable and Satellite Broadcasting Association of Asia) reports that access to illicit streaming devices and other tools to access stolen programming is just a click away.

In addition to the proliferation of devices enabling consumers to illegally access legitimate signals (delivered either by satellite or streaming over the Internet), there are growing numbers of offshore websites that are beyond the reach of domestic regulators and which provide infringing content over the Internet. One effective solution that has been used in Europe, Australia and elsewhere is to institute site-blocking of offshore sites that do not comply with domestic laws. In a previous blog I wrote about a paper done by the Information Technology and Innovation Foundation that showed that not only was site blocking an effective tool in changing consumer behaviour but made a convincing case that it does not infringe on internet freedoms nor “break the internet”. In terms of Internet streaming versus satellite delivery, it is more technically feasible to block illegal sites on the Internet than to block satellite signals, which essentially have to be policed by the broadcaster using anti-piracy technology, with a resort to the courts where necessary.

The commercial-scale infringers have many have ways of fighting back, for example shifting hosting sites from one country to another, changing their site addresses, and putting up password protected “consumer help sites” on the Internet to get their customers up and running again. A good example of the cat and mouse game that is played, and the way in which ethically-challenged merchants try to exploit the grey areas, is demonstrated by the lawsuits that the big cable providers in Canada, Bell, Rogers and Videotron, have brought against a number of small retailers openly advertising ways to circumvent their paywalls. I wrote about this case earlier. Canada’s proximity to the US, both in terms of culture and geography, along with the restrictions on cross border broadcasting imposed by the regulator (CRTC) make for a prolific breeding ground for this type of activity. Expanded content offerings in Canada have done much to help curb the appetite for a direct fix of US programming, but it is impossible to curb the desire of some people to go around the rules and to try to get something for nothing, or at least well below its true value.

The battle is also being fought in other parts of the world, notably Asia, where the desire to access more content while not paying for its true cost, combined with the ready access to the technology to enable piracy and circumvention, has created big headaches for the content industry. The problems don’t just exist in Asia. Police in the UK have just busted an operation that pulled in content via satellite for further distribution over the Internet through servers to users equipped with illegally modified set top boxes, demonstrating how new and older technology is being combined in furtherance of illegally distribution of copyrighted content.

The cat and mouse technology game between content owners and commercial scale pirates will continue. Consumers are better served with content offerings than ever before, but the combination of shady operators who see the chance to make a quick buck off the back of someone else’s investment and a desire by some consumers to get something for nothing if it is readily available means that, whether the content is in the sky or in the cloud, the challenge of getting a fair return on investment for developing and delivering popular content will unfortunately continue. Good content does not come free. If consumers want the steady stream of entertaining and innovative content to continue, they should be prepared to pay those who create, produce and deliver it.

© Hugh Stephens 2016. All Rights Reserved.


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