Ruling puts Australian courts on the front line of global online TV piracy war

[Len]

A landmark ruling in the New South Wales Federal Court has struck a blow for TV networks in a global battle against pirate pay TV operators, who have been undercutting them with internet-based subscription services.

The case, late last month, used 2016 national website blocking laws to grant Village Roadshow and six Hollywood studios an injunction against Telstra and 48 other carriers to block access to 16 internet addresses.

Unlike typical online piracy cases, the addresses were not torrent sites favoured by peer-to-peer file sharing enthusiasts, rather they provided online directions for servers digitally choreographing a well-funded, industrial-scale global pirate subscription TV operation.

Such operations can duplicate an entire legitimate subscription TV service and sell them at a fraction of the price to subscribers, many of whom have no idea the services are skirting the law.

By stealing just one signal being delivered to a legitimate subscriber and using cloud hosting providers, pay TV channels are being illegally re-broadcast to millions of viewers, with a second's delay, via readily available set-top boxes.

Premium channels

The Federal Court was told the internet addresses were behind a bootleg subscription package capable of streaming an impressive content line-up, including BBC1, BBC2, BBC Lifestyle HD, Disney, Disney Junior, Fox HD and NatGeo Wild HD.

Notably, the pirated content also included three English Premier League football channels, and just days after the ruling Optus – one of the targets of the injunction application – announced it had renewed its Australian EPL broadcast rights.

The server addresses for the pirate content were mostly registered in the Netherlands, and provided software, data and payment processing systems to allow individuals to use cheap, widely available, Android-based set-top boxes (STB) to access bootleg subscription content.

The Federal Court had previously granted injunctions to block a broad range of websites found to have a "primary purpose" of facilitating piracy in line with copyright laws.

However, in the latest case Village Roadshow broke new legal ground by testing the precise language of the laws on "online locations".

Legal confidence

Chief executive of the Australian Screen Association (ASA) Paul Muller said the ruling would give content owners confidence to go after other pirate subscription TV services, in the same way that illegitimate streaming sites had been targeted.

"Once we set a precedent in blocking a website, the next case we took wasn't against one online location, it was against 55," Mr Muller said.

Hong Kong-based Chinese media content specialist Television Broadcasts Limited (TVB) has since applied to the Federal Court for injunctions to block locations involved in bootlegging of its subscription content.

Scott Lorson, chief executive of IPTV service FetchTV, said that if TVB's legal bid succeeded the number of fresh injunctions brought against pirate subscription video operators was likely to multiply.

"If the rulings are impactful as we expect, then we anticipate a significant ramp up in legal activity targeting other pirate STB services," he said.

"Fetch will certainly be doing its part to combat the piracy epidemic and protect creative industries."

Smart STB apps, which run on the Android operating system, act as ersatz versions of legitimate STBs of pay TV providers like Foxtel, FetchTV and Telstra.

Foreign language channels

Mr Lorson said that the devices were particularly popular within Australian communities where English is not the dominant language, allowing locals to stream overseas content for a pittance.

The Android-based smart TV units have names including "HTV", "A2" and, less subtly, "Unbloc".

The Australian Financial Review visited one retailer alleged to be selling boxes carrying bootleg subscription content located in the heart of a large ethnic Chinese community in Sydney's south.

Its flagship device is marketed with a three-year subscription to a popular Beijing subscription pay TV provider for just under $400.

The store's operator rejected suggestions that the content was unlicensed and said the store had a relationship with the subscription TV provider.

However, TVB CEO Jacky Cheung told the Financial Review that, while some of the content may be legal, it was impossible that all of it was.

He said that in addition to streaming TVB's content without a licence the box carried content that isn't licensed outside mainland China.

Retailer blind eye

He said that if big-name stores like JB Hi-Fi sold these devices, the regulatory response would be swift and merciless.

"Because it's these small IT shops that are under the radar they don't see it as a big issue," Mr Cheung said, referring to meetings TVB has held with current federal Communications Minister Mitch Fifield and former Attorney-General George Brandis.

"The amended site-blocking laws in Australia are just not designed for these retail set-top boxes," he said.

Mr Cheung estimated TVB's losses due to bootlegging at around $35 million, and said it would have directly cost 35 jobs in Australia.

The stakes are high, but it's not just because the services threaten billions of dollars paid in sports and content broadcast rights. Some pirate operations are reportedly being recruited into geopolitical disputes and commercial wars.

International issue

According to a New York Times report, Qatari sports network operator beIN Sports recently found that its multibillion-dollar operation was being undermined by a pirate operation called boutQ re-airing its content in Saudi Arabia and the United Arab Emirates.

It said pirate operators were selling STBs with a beoutQ brand on them, containing software specifically designed to tap into the bootlegger's signal.

Qatar is in a dispute with its neighbours over allegations it is funding terrorism and stoking regional disunity.

BeIN's investigation has led to suspicions that the pirate operation is part of larger commercial blockade of Qatari industries touching not only beIN (sales of its service are banned in Saudi Arabia) but its airlines and its livestock production.

The NYT reported that prominent Saudis, including a royal adviser, had been promoting the beoutQ service on social media. There is very little that beIN's investigators can do to disrupt it.

Creative Content Australia recently surveyed a group of local set-top box users, and found that 21 per cent had used a known pirate TV subscription service.

However, only 11 per cent admitted to engaging in piracy, suggesting they couldn't distinguish their pirate STBs from licensed services.

Mr Muller said the seemingly legitimate appearance of the STBs, bought from high street stores, made the pay-TV piracy scourge particularly alarming.

"Psychologically this is a different type of piracy. Typically, it's done by people who are less technically savvy than your average pirate. All they need to do is buy a box and it's plug-and-play," Mr Muller said.

Removing lure of cheap boxes

Mr Lorson said the pirate operators' marketing efforts were also impressive. The companies have been known to use sales commission structures to reward STB retailers for promoting their bootleg operations.

He said the aim of the web address injunctions was to squash the retail appeal of the STBs, by removing the access to promised channels.

"The pirates and their distributors use content to market the illegal services in the same way that legitimate players like Fetch or Foxtel do. Take away their ability to market the availability of the content and the demand will dry up," Mr Lorson said.

The site-blocking legislation is undergoing an 18-month review.

The federal court currently applies a legal test that requires content owners to prove that the "primary purpose" of a web address is to facilitate copyright infringement. The ASA wants this to be broadened to "substantial purpose or effect" in order to capture more illegal services.

Mr Cheung argued, however, that either way the injunction process was simply too slow and cumbersome to be effective.

In the meantime, Mr Muller has offered some advice for consumers.

"The message to consumers is to think before you buy one of these STBs because they may not offer the value that you think they will," he said.