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Not quite what it seems

More nonsense in the SCMP today (subscription required):

Losses from pay TV piracy down 15pc with use of secure network

Frederick Yeung and Celine Sun
Nov 01, 2007

Pay TV piracy in Hong Kong is estimated to result in total losses of HK$213 million this year, down 15 per cent from last year, a poll has found.

The industry expects losses will be further cut as more subscribers pay for the service through the highly secured internet protocol television service (IPTV), according to the survey conducted by the Cable and Satellite Broadcasting Association of Asia and Standard Chartered Bank.

Simon Twiston Davies, the association's chief executive officer, said yesterday: "The IPTV platform is much tougher for pirates and this helps channel operators retain integrity in distributing the content. It is more difficult to hack the system."

The survey also found that total estimated losses in the regional pay TV service due to piracy would be US$1.54 billion this year, up from US$1.13 billion a year earlier.

"The net cost of piracy reduced 15 per cent over the same period last year due to competition driving service charges down," Lee Beasley, director of Standard Chartered Bank (Hong Kong), said.

Legitimate pay TV users in Hong Kong number about 1.45 million. Illegitimate users remain at about 118,000, the same as last year, of which 98,000 are connected through illegal set-top boxes and 20,000 receive satellite overspill signals from satellite receiver dishes.

So there are just as many people "stealing" cable signals, but they would have paid less this year because Cable TV have cut their charges.  That isn't quite the impression you might get from the headline or the comments about IPTV.

It's also rather dubious to argue that watching a satellite TV signal you're not supposed to watch is the same as installing a 'pirate' decoder. 

Mr Beasley said the Hong Kong government was estimated to suffer tax losses of US$4.62 million this year, according to PricewaterhouseCoopers figures.

I'm wondering how they know how much people would be paying for Cable TV or one of the other pay tv services if they weren't "stealing" the cable signal.  The assumption seems to be that each subscriber would pay HK$150/month, but clearly that's a made-up figure.  As for the "lost" tax revenue, that's even more fanciful.

Mr Twiston Davies said: "We don't expect piracy to have dramatic changes in Hong Kong; it is stable as Hong Kong is a competitive market."

He said the pay TV market in the city benefited from market competition. Subscribers were on the rise because of new player PCCW's Now TV pushing the service aggressively by securing exclusive rights to English Premier League football matches from this year to 2010.

His association, which represented 128 Asian-based corporations, took legal action last year against commercial distributors of unauthorised signals in public venues such as pubs during the World Cup football matches, he said.

Keep up the good work, chaps.  Our government needs every dollar of tax revenue they can find.  Don't they?  Hello?

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