Internet Piracy in Taiwan Undermines Entertainment Industry

Internet Piracy in Taiwan Undermines Entertainment Industry
Photo Credit: Taiwan Business TOPICS

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By Matthew Fulco

Content owners urge the blocking of China-based websites that host a huge variety of unlicensed programming free of charge.

Online piracy of television programs remains rampant in Taiwan in the absence of a mechanism to block offending websites, which are largely based in mainland China.

A Chinese-language search on Google for “free Taiwanese TV programs” turns up dozens of results for unlicensed TV content. Provided a user can put up with the embedded advertising on these sites, it is possible to view almost any TV program offered by local pay-TV channels online and free of charge.

The abundance of readily available pirated content hobbles the competitiveness of Taiwan’s entertainment industry and deprives it of revenue, experts say.

“Piracy is destroying the ecosystem of Taiwan’s television sector,” says Kevin Lin, chief legal officer of Taiwan Broadband Communications (TBC), noting the cable industry’s falling subscriber numbers and the declining production value of Taiwanese programming. Taiwan’s telecoms are also hurt by Internet piracy, Lin observes, as ironically they pay traffic costs to the mainland operators hosting the unlicensed content.

Without an intellectual property rights mechanism to prevent consumers from accessing illegal over-the-top (OTT) content, the industry’s development and consumers’ interests will be harmed in the long run, Lin says.

In response to concerns about Internet piracy, the Taiwan government introduced a bill to amend the Copyright Act in May 2013. The draft amendment would have authorized the Taiwan Intellectual Property Office (TIPO) under the Ministry of Economic Affairs to act on complaints from content owners regarding material that had been posted online without their permission. TIPO would then require Internet services providers (ISPs) to block websites with infringing content. Judicial review of content owners’ requests was to be excluded.

“They asked us, ‘How can you decide which sites should be blocked? What if legal content is blocked as well? Does the U.S. do this – and if the U.S. doesn’t, then why should Taiwan?’”

TIPO said it sought to target serious offenders that “specialize in copyright infringement activities,” like MegaUpload, a popular file-sharing service in the late 2000s that provided thousands of links to pirated television programs, movies, music albums and software. U.S. authorities shut it down in 2012.

But Taiwan’s netizens worried that the amendment would lead to curbs on freedom of speech and pushed back hard. A Facebook page organized to advocate an open Internet attracted almost 50,000 followers, and the group behind the effort planned to stage an Internet blackout in protest on June 4, 2013. Websites including Wikipedia Taiwan and Mozilla Taiwan promised to go dark to boost awareness.

Protest emails came flooding into the TIPO office. “Suddenly, a lot of people started to send mails to the office, asking us why we wanted to censor the Internet,” says Chang Yuh-Ying, director of TIPO’s copyright division. “They asked us, ‘How can you decide which sites should be blocked? What if legal content is blocked as well? Does the U.S. do this – and if the U.S. doesn’t, then why should Taiwan?’”

“Taiwan’s netizens told us it was silly to restrict our own Internet access rather than taking down the websites hosting pirated content,” Chang explains. “Since it was not possible to have a reasonable discussion with Taiwanese Internet users, the government withdrew its plans to amend the Copyright Law.”

Taiwan’s netizens believe their Internet culture is closer to that of the United States than to South Korea, which is often cited as an example of a democratic country that practices some form of online censorship, Chang observes.

“The Internet companies say nothing should restrict the use of the Internet. The truth is that there is a lot of traffic they don’t want to lose that is generated by searches for pirated content.”

In fact, the United States tried and failed to implement its own anti-piracy bill in 2012. The proposed legislation, which was called the Stop Online Piracy Act (SOPA), initially received strong bipartisan support in the House of Representatives and Senate. Had it passed, the bill would have made it possible to seek court orders against websites outside U.S. jurisdiction suspected of enabling or facilitating copyright infringement. The court orders could have been used to prevent online advertisers and payment providers from doing business with the offending websites, and bar search engines from linking to the sites. Moreover, it could have required ISPs to cut off access to such sites.

Google and Microsoft weighed in to defeat the bill, says Lin of TBC. “It’s a battle between the content and Internet industries,” he says. “The Internet companies say nothing should restrict the use of the Internet. The truth is that there is a lot of traffic they don’t want to lose that is generated by searches for pirated content.”

By contrast, the Taiwan government is loath to be seen as interfering in the media market, says Michael Kwan, an associate professor in the Department of Radio, Television & Film at Taipei’s Shih Hsin University. “It’s a legacy of the martial law era,” he says, referring to period from 1949-1987 when the island had strict controls on freedom of speech and assembly. “Now the government says ‘we aren’t going to control anything.’”

An industry in decline?

The need to combat Internet piracy in Taiwan is pressing because its rise coincides with a weakening of the nation’s entertainment industry, market observers say. Kwan attributes some of that decline to a brain drain. Taiwanese actors, directors, and screenwriters have been relocating to China to tap a vast market offering them better opportunities than they can find in Taiwan, he says.

Noting China’s elaborate costume dramas as an example, Kwan says, “Although China has strict censors, the Chinese are willing to invest in content, which is the most important thing. In Taiwan, there is too much of a focus on the technology and infrastructure of television – at the expense of producing high-quality content.”

Lin of TBC agrees that China is luring away Taiwan’s entertainment talent. He notes that a former classmate of his is a screenwriter who relocated to China and received NT$10 million to write 20 episodes for a Chinese television show. Lin says it would be impossible to earn that kind of money in Taiwan.

Chang of TIPO urges Taiwan’s entertainment sector to respond by boosting its creativity. “We cannot say all the problems the television industry is facing are due to piracy,” she says. “The talent shortage needs to be addressed. If we want to ensure that we can attract top talent to the local television sector, we need to come up with new ideas, and not just repeat the same things we did 10 years ago.”

“In Taiwan, there is too much of a focus on the technology and infrastructure of television – at the expense of producing high-quality content.”

While Chinese websites continue to host pirated television content from Taiwan, Chang says the situation has improved in recent years. “China has started to pay more attention to copyright law,” she says. “Since the Cross-Strait Agreement on Intellectual Property Rights Protection and Cooperation was reached in 2010, the two sides have been able to deal with IP disputes through an administrative approach, and most of the time it is very effective in resolving the problem of websites that are hosting unauthorized content.”

But Lin of TBC says it is arduous for Taiwanese content owners to pursue legal action against offending Chinese websites. “It’s very time consuming, especially as Taiwanese are usually unfamiliar with the Chinese legal system,” he says.

He concurs that it will be a challenge to reverse the Taiwan government’s decision on amending the Copyright Law. But South Korea’s experience combating piracy is relevant for Taiwan, he says, noting that a copyright owner there can apply to the telecom regulatory body to issue an order to an ISP to block a website hosting pirated content.

The government of South Korea is indeed fighting piracy vigorously. It spends £12.7 million a year on enforcement, the most of any government in the world, according to the United Kingdom’s Intellectual Property Office. To help the government stamp out piracy, South Korean citizens are asked to report illegal websites through a web portal, the Office notes. Those who report regularly can receive rewards of coupons and gift cards valued at up to £1,700 per year.

In its 2015 White Paper, The American Chamber of Commerce’s Taipei Telecom & Media Committee urged the Taiwanese government to amend its Copyright Law or Telecom Law to allow copyright owners to apply to the appropriate government agency to cut off access to OTT websites outside Taiwan that host unlicensed content. The 28 countries of the European Union as well as Singapore, Malaysia, South Korea and Indonesia have adopted similar measures.

The Committee also recommended that the government impose criminal penalties on sellers of devices that enable consumers to access illegal OTT services or who knowingly help illegal OTT operators do business in Taiwan.

Joanne Tsai, executive vice president and managing director of Fox International Channels in Taiwan and China and co-chair of AmCham Taipei’s Telecom and Media Committee, says a comprehensive approach to the piracy problem would be most effective. Site blocking would be one element, as it has been used successfully across Europe and Asia. But she stresses that it is also important to raise awareness of the piracy problem among advertisers, “so that marketing money is not spent on illegal sites.”

“Content is king,” she concludes. “It needs to be protected.”

First Editor: Olivia Yang
Second Editor: Joey Chung

Taiwan Business TOPICS Magazine has authorized publication of this article. The original text was published here.