A report investigating the scale of the issue, unveiled at last month's Casbaa conference, showed that consumers who knowingly breaking the law represent only about 15 per cent of lost revenue.
"The consumer just doesn't know it is happening," said Simon Dewhurst, director and head of media and entertainment investment banking for the company that compiled the report, CLSA Asia-Pacific.
The vast bulk of lost incomes are from India's grey market, where only about half of subscriber payments, collected in cash at a household level by thousands of independent operators, makes its way up the value chain, and unauthorised operators, who steal TV signals and distribute the programming on their own networks. "We need to look back at the infrastructure of the industry, and the regulation, and through that we will be able to drive down the core part (of the losses)," Dewhurst said.
CLSA estimated that piracy will drain $970 million from industry coffers in 2004. The figure is up 11 per cent on last year's estimate, though this is more a result of a better assessment of the problem than a real increase in lost revenue.
India accounts for over half of lost income in the region, though some consolidation within the country's highly fragmented industry has helped stem lost revenue. However losses from piracy are increasing in Thailand, Asia's second worst offender, where legitimate subscriptions are under a third of total subs and there is little enforcement of industry regulations.
Losses are also rising in Singapore and Vietnam, though local initiatives in Malaysia appear to be having a positive impact. "Looking at piracy as a regional issue is not very productive," Dewhurst said.
Casbaa CEO Simon Twiston Davies said the body's first priority is to inform and work with regulators to highlight the issues in each market.
"This is a very young market," he said. "In many ways the market has developed in a very ad hoc fashion."
Casbaa will also help enforce regulations where possible, Twiston Davies added. David Dea, CEO of Taiwan Broadband Communications, said programmes must shoulder some of the blame for the cost of piracy, by not insisting on contractual third party checks on subscriber numbers. "They put more emphasis on minimal guarantees than auditing the operators," he said.
