Twenty-five Years of US-Vietnam Cooperation—Don’t Let “Decree 06” and Ongoing Piracy Spoil It!

How time flies! That is a truism we are all familiar with, but it was brought home to me forcefully when I was reminded by friends still living in Vietnam that this year, 2020, marks the 25^th anniversary of the establishment of diplomatic relations between the United States and Vietnam. These two nations fought one of the most protracted, divisive and bloody wars in recent history, yet they have both been able to put this behind them and work together to create, in Vietnam, one of the most dynamic economies in the region. Since the establishment of diplomatic relations between the two countries on July 11, 1995, and the conclusion of the US-Vietnam bilateral trade agreement five years later, Vietnam has continued to open its economy. It joined ASEAN in 1995, became a member of the World Trade Organization in 2007 and is one of the eleven founding members of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which came into effect for Vietnam in early 2019. Its export-led economy, a hybrid capitalist-guided socialist model, has enabled it to increase its GDP ten-fold over this period and it has embarked on a number of domestic economic reforms that have opened up many sectors of the economy, including in areas close to copyright.

The US has provided considerable assistance in terms of funding over the years, ranging from health initiatives to capacity-building in the area of policy development. Vietnam has largely opened to the world, both in terms of tourism (until COVID hit earlier this year), manufacturing and services, and the Vietnamese people have greatly benefited from these developments. At times there have been setbacks and even missteps, but the overall thrust has been forward.

I well remember back about 15 years ago when Vietnam was beginning to open its television market to satellite and cable providers. It decided to “experiment” by “borrowing” satellite content without authorization and rebroadcasting it domestically through a state-controlled platform to test demand. When those of us then in the industry pointed out to the responsible Minister at the time that this content was unlicensed, indeed “pirated”, this led to some uncomfortable moments but also a sensible re-evaluation of Vietnam’s position. As a result, what was in effect state-sanctioned piracy quickly ended and Vietnam established a thriving pay-TV industry, with subscriptions more than doubling between 2010 and 2017, and pay-TV penetration reaching 37% of households. This has brought enormous benefit to the entire industry ecosystem. Now, as is the case in many countries, the configuration of the industry is changing as the growth of subscription satellite and cable television slows down and as streaming options take off.

Vietnam is now a vibrant market for over-the-top (OTT) streaming and Video-on-demand (VOD) services. However, there is a significant black cloud on the horizon, Decree 06. This has been around in draft form for several years, and despite various amendments is still extremely problematic. Decree 06 is being sponsored by the Authority of Broadcasting and Electronic Information (ABEI), the regulator that falls under the Ministry of Information and Communications. If enacted in its present form, it would constrict the ability of VOD services to participate in Vietnam’s digital market. Although supposedly designed to harmonize regulations between VOD and traditional broadcasting, and protect Vietnamese culture, the proposals will be counterproductive. Enactment will move Vietnam away from best practices in the region led by countries such as Singapore and Malaysia that treat VOD with a light regulatory touch, and closer towards China’s e-commerce model. Of most concern is a licensing scheme that would require a local presence through a forced joint venture, and onerous censorship requirements.

Experience in other markets has demonstrated that heavy-handed regulatory measures don’t work as intended. Indeed, they often have just the opposite effect. A licensing requirement through a forced joint-venture with a local company, or licensing through a local company, would discourage investment in Vietnam. Foreign investment has proven to be a strong catalyst for the development of creative industries around the world.

Classification and censorship is yet another issue. Curated content services have developed practical and sophisticated parental controls that empower parents to take control over what their children can watch. Many governments, such as Malaysia and Singapore, are moving towards a self-regulatory model to address such concerns. Other countries, like Australia, New Zealand and India have also recently announced that they are working with industry towards a self-regulatory model within a legislative framework. This will permit self-classification, after certain conditions have been met. Vietnam should pursue similar options. Decree 06 is the wrong solution.

And then there is the ever-present challenge of piracy. At one point, Vietnam was host to one of the world’s largest illicit streaming sites, 123Movies. It was suddenly shut down by the Vietnamese authorities back in April of 2018–an encouraging move–but this type of enforcement action has not been consistent. Today, some of the most egregious piracy sites and services in the world still operate out of Vietnam, inflicting damage not only on the nascent local market but also on many international markets. A noteworthy example is the free streaming website ‘Phimmoi’. This is a Vietnamese-language site that offers thousands of unauthorised feature film and television series from the US and other countries. Phimmoi was named by the U.S. Trade Representative’s Office in its 2019 Notorious Markets Review and in the Special 301 report. For the 12-month period from June 2019 to May 2020, phimmoi.net received a total of 862 million visits (a monthly average of 71.83 million visits), with 98% of this traffic coming from Vietnam. Local rightsholders have attempted to have the site dealt with, but the operators have been able to continue undeterred.

It is distressing to see Vietnam potentially taking a backward step by limiting access for content services and failing to seriously address piracy, particularly as it has made so much progress, and just when it is marking a milestone in its relations with the United States. The US is a strong proponent of open digital markets, and US industry is committed to working cooperatively with Vietnam in this area. In fact, in this vein, to celebrate the 25 years of US-Vietnam cooperation and friendship, in April the Motion Picture Association in partnership with the US embassy, the Vietnam Film Development Association (VFDA), and others, hosted a “Pocket Filmmaking Masterclass” on smartphone technology with Australian filmmaker Jason van Genderen. Over 150 people tuned in for the event, a majority of whom were emerging Vietnamese filmmakers.

This is the sort of win/win cooperation that benefits the content ecosystem in Vietnam and internationally. It is the sort of cooperative activity that supports open markets and the creation of legitimate content, bolstering the bilateral relationship. Ignoring piracy and imposing a flawed and narrow regulatory regime such as that represented by Decree 06 will have just the opposite effect. Decree 06 has languished in various drafts since at least 2016, and it’s high time to end its misery and put it on the shelf—permanently. Now that would be a good way to celebrate 25 years of cooperation and friendship!

© Hugh Stephens, 2020. All Rights Reserved.