Professionalised OTT piracy is the biggest threat facing pay-TV providers and content rights holders globally, writes Adrian Pennington. In the MENA region – world’s fastest growing TV market – operators are fighting back.
The competition for entertainment hegemony in the Arab world is fierce. The regional TV and video market is growing at unprecedented speeds with most countries forecast to double the penetration of services by 2020.
Yet, video piracy is rife. A report by advisors IDC, Piracy in the Middle East and Africa, estimates illegal content distribution costs the industry more than US$750m every year.
“Piracy in MENA impacts the pay-TV industry immensely,” says Mohammad Al Subaie, executive director of commercial affairs at Al-Jazeera sports network beIN. “Piracy causes millions of dollars of losses to organisations, governments and deprives legitimate industries like regional content creators from return on their investments.”
"Piracy causes millions of dollars of losses to organisations, governments and deprives legitimate industries like regional content creators from return on their investments."
IDATE DigiWorld forecasts that the TV market in Africa/Middle East will grow 30% between 2016 and 2021, from €10.3 billion to €13.3bn. This momentum, which is driven largely by sub-Saharan Africa, represents the world’s fastest-growing TV market, not only today but also for the five years to come, states IDATE.
With a young and fast-growing population, a growing middle class, a solid medium-term economic outlook – despite the turbulence caused by falling oil prices in the Gulf States – the socio-economic variables point to a positive future for the region’s audiovisual sector. This positive outlook is manifested in increased TV ownership levels and progress in cellular network rollouts, with the bonus of creating a massive new base of screens for watching video.
IDATE predicts the number of TV subscribers will double in five years, apace with the rise of OTT video services. However, these typically low-cost OTT services are contributing, along with still massive levels of piracy in the region “to driving down the price of pay-TV plans”, says the analyst.
Piracy is, in fact, no more prevalent in the Middle East or the wider African continent than in any other region, but there are region-specific issues.
“A lot of people from MENA have emigrated to other countries, and that has created a lot of demand for content from them in the regions they’ve moved to,” says Christopher Schouten, Senior Director Product Marketing at Nagra. “Pay-TV operators have adjusted by licensing ethnic content, but they aren’t as successful as they’d like to be, because people can simply stream their channels from home using pirate IPTV services. The same is true for foreign immigrants and workers in the MENA region, so that is also harming MENA businesses.”
Another factor harming MENA businesses is the reticence of foreign operators to license MENA content for local distribution because of the prevalence of pirate versions of those channels being available already. “Much of that content is FTA in MENA, but paid in other regions, and that makes it particularly difficult to trace pirate leaks,” notes Schouten. “There is no watermarking or fingerprinting available on FTA content. Expats are really driving piracy globally.”
Content theft occurs in the region in the same way it does in the rest of the world: illegal set-top boxes, both for IPTV streaming and for traditional satellite services using internet Key Sharing. Because of the lack of internet penetration in some countries, Internet Key Sharing and control word sharing on legacy CAS systems is probably a bigger problem in MENA, but content sharing is increasingly quickly.
Professional and illegal
“Pirates are entrepreneurs as well as criminals,” observes Khaled Al-Jamal, Head of Sales, MENA, Irdeto. “They know what appeals to their market. Control word sharing still appears in the region. We recently worked with MultiChoice Africa and the Egyptian law enforcement teams to close one of the largest pirate networks for control word sharing that we’ve encountered. The pirates were recently sentenced, providing a clear message that piracy of any type is an offense and will not be tolerated.”
Nonetheless, as little as 2 to 3Mbps is sufficient to access hundreds of pirated pay TV channels and movies from almost everywhere in the world in HD or near HD quality. “This, combined with the ease, simplicity and low-cost nature of pirate OTT devices, means that we’re facing a wave of piracy bigger than we’ve ever seen before,” warns Al-Jamal.
Indeed, the main challenge is that many pirate OTT services have a professional looking website and service, often offering support and money-back guarantees, with bundles to appeal to specific markets and sometimes even content that is not otherwise available in the MENA region.
The experience often fools consumers into believing the service is legitimate. Pay-TV operator face potential subscriber churn to cheaper illegal services as a result while rights holders risk loss of revenue as alternative sources dilute the value of their content.
“They are a bigger threat to pay-TV than ever before because they’ve got so advanced that many consumers assume they’re legal solutions when they’re not,” says Schouten. “In that sense, piracy can be seen more like a competitor than an enemy. Since people are willing to pay for exclusive content and a high-quality user experience that makes it easy to find the content they love, pay-TV providers need to work even harder to deliver a cutting-edge, innovative content catalogue and feature set.”
Consumer attitudes to viewing pirated content don’t help. A recent survey conducted by Irdeto found that more than half of respondents polled in MENA (59% in Egypt and 53% in the Gulf Cooperation Council (GCC)) admitted to watching pirated video.
“Millennials are among the most likely to illegally consume content, with 62% of 18- to 24-year-olds in the GCC and 64% in Egypt stating they watch pirated video,” says Al-Jamal.
While content theft is overwhelmingly focused on redistribution, consumption habits of pirated content in the MENA region are evolving. Irdeto’s research found that laptops remain the favourite device for consuming pirated video content, for 33% of respondents in the GCC and 35% in Egypt smartphones or tablets are their most frequently used devices to watch pirate content.
It’s not just the millennials that are leading this shift. In fact, MENA is an anomaly in so much as the gap between 18- to 24-year-olds and other age groups is the smallest when it comes to the preferred device (mobile – which includes Android/iOS smartphones and tablets). Globally, 26.9% of 18- to 24-year-olds prefer to watch pirated content on mobile devices; compared to just 13% of over 55s. Yet, over 55s in the Middle East seem to have millennial tendencies with 30.9% using mobile devices for their pirated content and 37.6% for the 18- to 24-year-olds.
“It’s a clear indicator that operators in the region must continue to innovate to provide all of their consumers with packages that include cross-device content they desire,” stresses Al-Jamal.
Premium security today means 360-degree protection trusted by content owners, from protecting broadcast and on-demand services, to end-to-end piracy control and watermarking.
“Pay-TV providers looking to secure rights to UHD content and early release movies need to have a watermarking solution,” says Al-Jamal. With consumers’ increasing expectations around OTT, it is crucial for operators to be able to reach consumers on any device, while securely delivering premium content and a great user experience. A software-based security solution will allow operators to do this.”
The implementation of forensic watermarking is a vital part of the security chain, but one that requires a long-term plan and commitment to be effective.
“Invest in anti-piracy services with a partner who has a broad enough portfolio to attack ALL kinds of piracy, whether on the web or behind IPTV pay walls,” urges Schouten. “Work with your CAS provider to implement these technologies and create a closed-loop system that can quickly shut down live streaming content so that destabilize confidence in pirate solutions.”
Educating consumer about the damage that piracy causes has a role to play. IBCAP in the US is an excellent example of this. It created a humorous but effective campaign warning consumers that if they buy illegal boxes and services, that they are at risk of wasting their investment, because legitimate content providers will work with content protection companies to take these services down.
“Often, we choose critical moments (like the middle of a sports match) to disrupt these services so that consumers realize that they risk missing out on the content they love the most,” explains Schouten. “This has a strong educational impact and dissuades them from experiencing such disappointments again in the future.”
There’s a positive response to education from Irdeto’s survey. Of respondents who view pirated content, 46% in Egypt and 47% in the GCC said they would stop or watch less pirated content if they understood the negative impact of piracy on the media industry. The survey found that nearly a third of consumers in MENA (29% in GCC and 30% in Egypt) don’t know whether it is illegal to share or produce pirated video content. The number of respondents unsure if it was illegal to download or stream pirated video content was similar, with 33% unsure in the GCC and 32% uncertain in Egypt.
Al-Jamal explains: “There is a clear knowledge gap in terms of the legality of piracy. In order to combat this threat, the media industry must not only educate themselves about their pirate competitors, but also educate consumers about the damage that piracy causes the content creation industry.
“Arguably, the most important task in the fight against piracy is the identification of illegal activity and pirated content through effective tooling that searches for and identifies watermarked content, which is crucial to revenue and copyright protection. The additional challenge for operators therefore is to know what content is popular on pirate sites.”
Action is doubly difficult since piracy is global. “To combat illegal streamers located in Russia but delivering the service in the Middle East, local operators need to work with security specialists and other worldwide content protection organisations,” says Chrys Poulain, Sales Director, MENA at NexGuard.
MENA can be a particularly difficult environment in which to enforce intellectual property rights because it lacks a homogeneous set of laws and regulations related to piracy across the region (which the US and EU have).
“The enforcement of copyright is not always a top priority,” says Schouten. “Some countries treat it very seriously, some not at all. Because there’s not a lot of high-value content coming out of that region (eg global, blockbuster movies, high-value sports, etc), it’s generally not taken as seriously.”
Working with industry bodies
There is change afoot. The UAE-based MENA Broadcast Satellite Anti-Piracy Coalition, launched by satellite broadcaster OSN in 2014, for example, has helped remove over 86,000 illegal videos from YouTube and Dailymotion, taken down nearly 2,300 advertisements of pirated boxes on online markets, and reported 829 free-to-air channel copyright infringements to satellite operators and distributors.
Sophie Moloney, OSN’s general counsel and head of content protection is quoted in The Gulf Times saying, “We have a whole generation of under 30s who have come to expect content to be made available free and that’s why we need to join forces across the entire Arab world to educate people to the realities of how movies, series and sports get funded. Not only that but we need to work together to fight criminality that takes advantage of this illegal demand.”
Saudi Arabia’s General Authority for Entertainment – in charge of overseeing all facets of the country’s entertainment industry – is being urged to reinforce protection for the Kingdom’s burgeoning pay-TV market. Consultants AT Kearney predict growth from 750,000 to 2.68 million households by 2020. The huge appetite for local talent and international content has also helped the Kingdom lead with the highest per capita consumption of YouTube in the whole world since 2012.
“This leads to a fundamental question for content protection specialists: how can the Kingdom ensure that it provides legal platforms to consumers who are – intentionally or unintentionally — accustomed to accessing their video content illegally or on YouTube?” poses Poulain.
“In countries like Saudi Arabia where the notion of copyright remains loose, we believe it is paramount to track illegal redistribution sources,” says Poulain. “However, we can go beyond simply punishing pirates. We can use the original copy being re-streamed as a platform to issue informative messages about copyright infringement and provide legal alternatives — effectively enabling us to reach not just the pirate, but also all the viewers of the illicit stream.”
Unfortunately, there is no silver bullet. To effectively combat online piracy, operators, telcos, broadcasters and publishers must combine state-of-the-art forensic watermarking technologies that identify the source of pirated content and allow for its immediate shutdown, with proactive enforcement and investigative services aimed at identifying and prosecuting the parties involved in large commercial streaming piracy networks. Global partnerships are necessary with law enforcement, industry bodies and agencies as well as consumer and technology providers.
“Moving forward, the challenge for the Middle Eastern content industry will be to combine these organisations with innovative and affordable services that leverage social media channels like YouTube, Facebook and Twitter, and find better ways to track pirates and inform the general public,” says Poulain.
In doing so, the MENA media industry can ensure that it provides a perfect environment to support the creativity of the content industry, while enabling consumers to access content in a legal and user-friendly way.