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Streaming Piracy Devices Threaten Hong Kong’s Creative Industry

April 2, 2018

Despite a ground-breaking court decision in 2017, piracy devices and apps have continued to thrive and threaten the survival of the local creative industry.

Last December, the court convicted for the first time a piracy syndicate for “providing circumvention device or service” and “conspiracy to defraud”.

Three men were sentenced to 21 to 27-months imprisonment for illegally providing paid TV channel content through video streaming devices.

While the ruling may serve as a deterrent to digital piracy, a lot more needs to be done to protect copyright owners from rampant piracy activities arising from illicit streaming devices and applications.

The culprits in the above case were brought to justice – but a long three years after the Custom and Excise Department’s raid in 2014. Following the operation, streaming devices or set-top boxes, equipped with pre-loaded applications for unauthorized access to hundreds of TV channels and movies, have remained readily available in shopping outlets across the territory, on online markets and social media platforms.

Last September, the local copyright industry discovered in 87 shops in Wan Chai, Sham Shui Po, Mong Kok, Tsuen Wan and Yuen Long that some 20 brands of piracy devices and apps were on sale at between HK$500 and HK$1,000, catering to customer affordability and needs.

These devices support both live TV streaming and video-on-demand (VOD) for local end users. While most shop owners were cautious not to overtly advertise these devices’ access to illicit content, some of them displayed key words like “jail break”, “free channels around the world” and “watch anything you want”.

None of the 87 shops offered any subscription plan, but most of these streaming devices have pre-installed infringing apps for unauthorized access to copyright content. In fact, a bunch of third-party infringing apps can also be downloaded from app stores and easily installed in these gadgets.

Consumer awareness needs to be raised

Dealers have promoted infringing devices by implying to consumers that the TV channels and movies available on the TV boxes are legal. The recent court case, however, has determined that streaming devices with applications that allow access to TV channels or movies without a legitimate subscription are indeed illegal.

Those tempted to buy piracy devices and apps need to be aware of the legal consequences. While criminal liability falls on those selling infringing devices, copyright holders are entitled to seek civil compensation from both buyers and users of these devices. Consumers should therefore acquire video content only from legal sources, for example, by subscribing to authorized TV services.

Criminal syndicates are making huge illicit profits first from the manufacturing and sale of illegal devices, and then the re-transmission of unauthorized content. Users of these devices are feeding the criminal gangs, while stripping industry practitioners of their rightful rewards.

The government must step up measures against illegal streaming

We, as members of the creative industry, certainly applaud the law enforcement agency for bringing the streaming pirates to justice. However, we are disappointed that neither the recent Policy Address, nor the latest Budget has addressed how the Hong Kong Government is going to strengthen protection of intellectual property against online piracy.

The Government has failed twice to enact amendments to update the outdated copyright regime in the past decade. After having their fingers burnt in the legislature, officials are apparently reluctant to attempt any major legislative proposals or measures in the near future. Bureaucratic inaction is hardly an answer to the serious threats posed by illegal streaming activities that continue to erode the legitimate interests of copyright owners.

One particular challenge facing copyright owners and law enforcement agencies is the reality that many illegal streaming sites have servers located overseas, making it difficult to crack down on piracy syndicates.

To counter this, the local creative industry launched the “Infringing Website List” (IWL) Scheme, modelled on a similar initiative in London, in December 2016.

The Scheme encourages partnering advertisers to stop placing advertisements on a list of popular pirate websites, thus depriving them of their advertising revenues and deterring online infringement. The pilot run of the Scheme resulted in the removal of advertisements on infringing websites by 50 brands in Hong Kong and reduced traffic of a number of infringing websites by an average of 14%.

Actions taken by the creative industry alone are far from adequate. The Hong Kong Government has yet to fulfil its international obligations to protect intellectual property rights, including updating the copyright laws which currently do not specifically cover piracy activities arising from illegal streaming.

The least the Government can do to demonstrate its commitment to intellectual property rights is to allocate more manpower and resources to fight online piracy and create a sustainable online environment.

After all, the territory’s fiscal reserves are expected to top  HK$1,092 billion by the end of this month. A faction of this staggering amount sitting in the public coffer will go a long way to ridding the market of its parasites.

Clera Chu

CEO, Clickplay (HK) Limited

This article appeared in the South China Morning Post print edition on March 28 as an Op Ed: Internet piracy via streaming devices threaten the creative industry in Hong Kong