Media companies: Why fighting content piracy is so hard

[Len]

Canada’s major media companies are presenting a united front as they prepare to combat piracy of their TV content.

A special panel discussion at last week's CTAM Canada Broadcaster Forum provided a comprehensive overview of the impact of piracy on the broadcasting industry as legal experts from Bell, Rogers and Quebecor talk about their biggest concerns as they all believe illegal streaming of pirated TV content is on the rise in Canada. The panel participants also spoke about potential future strategies and recent victories in their fight against the companies who sell internet-connected set-top boxes which make pirated content so accessible to mainstream users.

Silviu Bursanescu, senior legal counsel for Quebecor Media, said the ease with which pirated TV content can be found and distributed online nowadays is an “alarming trend,” because end users no longer need to be tech-savvy to access the pirated content. In some cases, the disputed set-top boxes are sold with preloaded software which seeks out pirated content, but as Bursanescu pointed out, even consumers who purchase legal Android boxes can easily find apps online to let them watch pirated TV shows and movies.

“It’s a very similar experience to an OTT (service),” Bursanescu said, adding that users don’t need any level of technical sophistication to use the set-top boxes to access pirated content.

“One big difference between an Apple TV and one of those boxes is, the Apple TV, you need to ‘jail break’ it before you can install these kinds of third-party infringing apps. Unfortunately, with the Android system, you can just take one of those vanilla boxes that maybe cost $50 or $100, and you won’t find the apps on the Google store — I won’t tell you where to find them — but they’re fairly easy to find once you know the names,” Bursanescu said.

Speaking to how widespread a problem piracy is in Canada, Mark Graham, senior counsel for the legal and regulatory group at Bell Canada, said its data indicates there are about 1.88 billion visits a year to piracy sites by Canadians. (This figure comes from the MUSO Global Film & TV Piracy Market Insight Report.)

Graham said there are two basic ways consumers can watch pirated content via set-top boxes in their homes. One way is to use add-on software to access content directly from piracy data centres, and the other is to pay for a subscription to an online service which offers streams or titles for which they have not purchased the copyright in Canada – because others legally own it.

According to Graham, two to three years ago, the number of Canadian households that were using set-top boxes to access pirated TV content in either of these ways was next to zero. Today, he said between 10% to 15% of households are accessing pirated content via set-top boxes in some manner. (Waterloo, Ont.-based tech firm Sandvine Inc. released a study earlier this year that found 7% of Canadian households, or roughly one million homes, are currently using Android boxes to view pirated TV content on a regular basis. Graham suggested the same percentage of households are subscribing to illegal TV services, and he extrapolated the 10% to 15% figure, taking into account potential overlap in the type of illegal streaming occurring in those households.)

The three companies represented on the panel have already achieved some level of success when it comes to stopping the sale of illegal set-top box equipment. Kristina Milbourn, director of copyright and broadband for Rogers Communications, said joint litigation by the three companies has resulted in an injunction against 123 companies that previously were selling preloaded Android set-top boxes. In March, the Federal Court of Appeal dismissed the defendants’ appeal of the injunction, which originally came into effect in June 2016.

“We have this scaling injunction that we’ve been able to use to enjoin additional vendors who very blatantly market their products as ‘cable killers’,” Milbourn said. “We have seen some response or acknowledgement from vendors who may have believed what they were doing previously as being legal now know that it’s not.”

Milbourn added that earlier this year eBay and Amazon changed their policy to no longer feature set-top boxes with such preloaded software on their sites. “I think we’re getting success, but it’s been slow and there’s still a lot to do,” Milbourn said.

Bursanescu said the rolling nature of the injunction secured as part of the companies’ joint litigation, allowing them to add more defendants to the existing injunction as they investigate vendors in Canada, creates an advantage that their legal counterparts in the United States do not have. In the U.S., a new injunction needs to be pursued in the courts every time another vendor of preloaded set-top boxes is identified, Bursanescu explained.

All three participants on the panel said that any legal action their companies might take would be focused on the vendors of illegal set-top boxes or piracy services, and not on the consumers using those products or services.

Graham said the kind of tactic used by the music industry several years ago when it was fighting Napster, which in some cases resulted in offending end-users being publicly arrested and shamed for illegally downloading songs, did not work that well in the past and would “totally alienate government and the public” if media companies adopted that approach to TV content piracy.

Milbourn also pointed out that content streaming is eclipsing downloading as the main method for acquiring pirated content, and currently there is no prohibition on streaming consumption included in the Copyright Act. As such, the current notice-and-notice approach to illegal downloading cannot be applied in a streaming context unless a peer-to-peer system is being used, she said.

According to Bursanescu, somewhere between 60% and 85% of content piracy today is occurring via streaming. He added that the international aspect of the Internet creates hurdles when it comes to enforcement, because not only can consumers purchase illegal set-top boxes from jurisdictions outside Canada but companies illegally serving up such content can hide their identities and be very difficult to track down.

“Not enough people are talking about how you shouldn’t pirate content, you shouldn’t steal content. There’s a culture setting in a little bit and I think it’s incumbent on everybody who works in the industry to not sit silently and think that this is somebody else’s problem. Everybody needs to talk about it and take steps to deal with it, or we will lose the battle.” – Mark Graham, Bell Canada

“That’s perhaps one area where there could be a bit more government action, for example, to help us with enforcement, especially when we talk about other jurisdictions. They might have a reach that maybe our companies don’t necessarily have,” Bursanescu said.

Milbourn said the federal government’s upcoming Copyright Act review is expected to address some of the industry’s concerns regarding content piracy, but it’s unlikely the government will start to entertain solutions until that process kicks off. Milbourn wouldn’t go so far as to say a prohibition on illegal streaming is one solution, but did say it should be part of the conversation during the copyright reform process and that it could possibly have a “chilling effect” on consumers by making them understand that streaming pirated content is illegal and the damage they are causing to the Canadian economy.

Perhaps giving consumers the benefit of the doubt, Bursanescu said it’s possible that many consumers accessing pirated TV content don’t recognize it’s illegal. “I think a lot of them, they don’t necessarily realize that what they’re doing is illegal, because they’re thinking, ‘I paid for a set-top box, I’m paying for a monthly subscription,’ so they think there’s nothing wrong with that,” Bursanescu said.

Graham argued that many people who access illegal content do so simply because they want to get it for free. “Not enough people are talking about how you shouldn’t pirate content, you shouldn’t steal content. There’s a culture setting in a little bit and I think it’s incumbent on everybody who works in the industry to not sit silently and think that this is somebody else’s problem. Everybody needs to talk about it and take steps to deal with it, or we will lose the battle,” Graham said.

“If the people who are most directly affected aren’t talking about it or making it a priority, it’s totally unfair to expect the government to make it a priority.”

All of the panellists agreed some type of awareness campaign targeted at consumers is needed to highlight both the economic impact of piracy on Canada’s broadcasting and creative industries and the inherent risks to consumers when accessing pirated content.

Milbourn acknowledged that media companies can appear “very self-interested” when they go after pirates because, as rightsholders and broadcasters, they profit when consumers stay within the traditional system of content distribution. However, she said many of the people selling illegal set-top boxes and piracy services are “unsavoury individuals” who knowingly operate outside the lawful system.

“Our ability to continue to finance quality product as well as help the production industry, all of this is being eroded by piracy.” - Silviu Bursanescu, Quebecor Media

“When you start to expose some of the people who are profiting from these business models for the criminals that they are, the people who are using the services will start to gain an appreciation of the fact that they are helping to line the pockets of some really shady people,” Milbourn said.

Furthermore, Graham added that accessing pirated content from an illegal service or website could expose consumers to malware. In addition, there’s no guarantee a piracy service is going to work or it may be shut down after consumers pay upfront for a subscription, leaving users with no legal recourse to get their money back.

Looking at the bigger picture, the impact of piracy on the TV industry and Canadian culture is significant, Bursanescu said. “Our ability to continue to finance quality product as well as help the production industry, all of this is being eroded by piracy.”

Graham added that although attempts to combat piracy may not be popular with everyone, the media industry needs to take an active approach to address the problem.

“Would you rather be unpopular with this particular constituency or would you rather have the sort of declining revenues, viewers and subscriptions that will inevitably follow, because it’s going to have to be one or the other,” Graham said.