Showtime and ART Target Lebanon Sat-pirates

By Chris Forrester, TBS Contributing Editor

Showtime and ART Want to Clean Things Up

Mid-East sat-platforms Showtime and Arab Radio & Television (ART) sent out a series of Electronic Counter Measures (ECM, handled by CA-supplier Irdeto) on March 25 to Lebanese cable pirates. Piracy is so widespread in the Lebanon that Showtime's popular movie channel frequently tops local ratings despite the broadcaster having only a handful of legitimate subscribers in the region. Independent market research study by Statistics Lebanon shows that an estimated 720,000 Lebanese households-or more than 78% of the entire population -are currently subscribing to illegal pirate cable television networks. This represents a rise of 23.75% since a similar survey in 2000.

A recent International Intellectual Property Alliance (IIPA) report says cable piracy is "rampant" and puts the figure at nearer 90% of all homes in terms of the loss to US studios. "The theatrical market continues to suffer and the legitimate video market has been almost entirely destroyed by the various forms of piracy in Lebanon. Local broadcast television stations have canceled long-standing licenses with copyright owners because they cannot compete with the pirates," says IIPA.

The annual loss to Lebanon's economy simply from income tax and VAT from an estimated 1000+ cable pirates is estimated at about $12m, and much higher when one includes the damage to inward investment into Beirut's growing market economy. In August, 2003, a judge in Beirut issued the first ever injunction against seven cable pirates (responding to requests brought by Showtime, and ART).

From the IIPA report:
"There are only four part-time inspectors in the [Beirut] Department of IP Protection tasked to fight piracy. In the area of software piracy, these inspectors lack computer knowledge. In addition, startlingly, these officers only work until 2 p.m. and won't work with computer experts. Even when these inspectors have been given targets to raid, many problems in enforcement have ensued (e.g., the pirate reseller at 4 p.m. at a computer fair could not be raided, because it was "after working hours").

 

 

 


The anti-piracy timing was simultaneous with the launch of ECOnet, an official channel supplier. Sheikh Saleh Kamel, owner of ART, invested in Beirut-based ECOnet in April 2001, and the result is a digital MVDS system handling about 120 channels. ECOnet was initially formed to supply cable TV within the Bekaa Valley region in 1990. The broadcasters recognised the need for a legitimate low-cost alternative to the existing "cable operators". Showtime and ART have granted exclusive transmission within the Lebanon with ECOnet. Around 100 channels are now offered for about $15 a month (Leb£ 23,000). The strategy is to make the bundle appealing to consumers who are long used to paying barely $10 a month for pirated services.

LEBANON
TRADE LOSSES DUE TO PIRACY (in $m)

  2003 2002 2001 2000 1999
INDUSTRY Loss/Level Loss/Level Loss/Level Loss/Level Loss/Level
Motion Pictures 10.0 80% 8.0 80% 8.0 80% 8.0 60% 8.0 60%
Records & Music 2.5 70% 2.0 65% 2.0 65% 2.0 80% 2.0 60%
Business Softwares NA NA 5 3.5 74% 1.1 79% 1.3 83% 1.6 88%
Ent. Software NA 80% NA NA NA NA 1.5 96% 0.5 70%
Books 2.0 NA 2.0 NA 2.0 NA 2.0 NA 2.5 NA
TOTALS NA 15.5 13.1 14.8 14.0

Data: IIPA

Peter Einstein in Beirut
Sheikh Saleh Kamel in Beirut

"As of this morning, illegal cable television operators will no longer be able to transmit pirated ART and Showtime channels to their subscribers," said Sheikh Kamel. This is the first stage of our campaign to combat illegal distribution of satellite television channels in Lebanon. The Lebanese government is also backing the crack-down. Peter Einstein, president of Showtime, said viewers' screens would "today" be going completely dark: "Lebanon is one of the most entrepreneurial countries in the region and has a highly educated workforce with particular talents in the IT, media, entertainment, and music sectors, yet companies are choosing other cities in the Middle East for their regional headquarters….It is encouraging to see the Lebanese government make significant progress in the battle against piracy." Einstein stressed that Showtime's recent expansion in Dubai, from 200 to 400 jobs, was the sort of investment and job creation "that should come to Lebanon but companies are being driven away by the relaxed attitude towards copyright infringement."

Despite the official government support, the International Intellectual Property Alliance (IIPA) says Lebanon must stay on its Priority Watch List because of the continued activities of illegal DVD and CD copiers that have "astonishingly high" levels of piracy. Intellectual property enforcement is so inefficient, and copyright theft so severe, that the IIPA has grave doubts whether Lebanon should remain a beneficiary of the USA's Generalized System of Preferences (GSP) trade program, which permits import into the USA of Lebanese products. For example, the IIPA suggests that even if cable piracy is solved, end-user piracy of computer programs as well as pre-recorded music and films, is still widespread "among large companies, banks, trading companies, and most government ministries". During the first 11 months of last year, Lebanon imported almost $28.2m of products into the United States without duty. The complete Lebanon IIPA report can be viewed at www.iipa.com/rbc/2004/2004SPEC301LEBANON.pdf, TBS

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