Special 301 close-up: Amid progress, AVIA describes shadow vendor ecosystem for piracy

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The submission to the USTR’s Special 301 process by AVIA, the Asia Video Industry Association, was a mixed bag of progress and red flags. On the plus side, site blocking has had a positive effect.  But piracy methods continue to evolve and anti-piracy enforcement can stand improvement.

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A 2023 survey for AVIA by YouGov found more than 60% of Malaysian and Indonesian consumers changed their behavior when they encountered blocked sites. Those countries established site-blocking policies with the support of AVIA. More than 1,400 illegal sites were referred to the Indonesian authorities for IP blocking.

Also according to that research, 20% of those blocked users turned to legitimate paid services and another 40% accessed to legitimate free services. Both countries, as well as Korea, have a ‘one-stop-shop’ approach which helps ensure that site blocking requests are streamlined and handled within 48 hours.

Singapore had the lowest piracy rate in the region, with 39% of consumers accessing pirate services.  As one of the first countries in the region to implement site blocking regulation, it has taken a decade to get to that level.  One remaining issue is the time and cost associated with getting a site blocking order, which currently takes as much as six months.

The Philippines lower House passed its Online Site Blocking Act in 2023, which has been introduced in its Senate. AVIA hopes it will be enacted by mid-2024.

AVIA also celebrated Hong Kong’s 2023 Copyright Ordinance, which had the effect of shutting down the sale of illegal streaming devices in retail storefronts, although HK-made ISDs are still available online.

Evading site blocking

In response to the success of Indonesia’s site blocking program pirate sites began migrating away from domains that can be blocked by normal Domain Name Server (DNS) blocking and towards IP address only sites, i.e. without a domain that can be blocked by DNS blocking.

Challenges in other countries

While China is mid-way through its five year plan to increase the creation and protection of intellectual property rights, it also notes a lack of enforcement action.  AVIA recognized that China’s copyright laws have evolved “to increasingly reflect international standards, … enforcement measures have yet to protect the very rights the legislation claims to provide,” and recommended that the US take that into consideration as it engages with China.”

AVIA saw increases in piracy rates in Thailand and Taiwan, neither of which have effective nor efficient procedures that allow rights holders to seek judicial or regulatory relief that would allow for the blocking of pirate sites.

47% of Taiwanese consumers watch pirated content, up 10% from 2022.  32% of those consumers access it through social media.  Taiwan’s own Special 301 submission lamented that while communications channels have been put in place to block the flow of illicit funds and to facilitate cooperation between rights holders and Internet platform operators, Taiwan’s official site blocking process is only supported by one ISP, and a blocking complaint can take as long as three months to carry out.

While India has a “robust copyright regime” in place, including a Cinematograph Bill that criminalized camcording in theatres, enforcement needs improvement.  AVIA also identified opportunities for cooperation among regulatory agencies there.

In Myanmar, legitimate broadcasters have been “ransacked” by piracy operators,through internationally popular piracy venues and specialized local language sites, and through social media. Local TV channels broadcast both local and international content without license. Despite recent anti-piracy legislation, enforcement is weak and prosecution “is rare.”

Evolution of piracy-as-a-service

In recent years, the resources available to pirates have evolved dramatically.  In 2019, piracy was largely by download from repositories of stolen content through peer-to-peer distribution and by illegal consumer devices that accessed legitimate channels using stolen credentials.  Streaming was still emerging.

By 2021, those with a desire to set up an illegal streaming operation could turn to a ‘piracy-as-a-service’ provider to do so, without technical expertise.  Pre-configured white-label service platforms and streaming infrastructure had become available without the need to set up in-house servers or a technical staff.  Pirates could pay a setup fee, and then serve consumers on a cost-per-user-per-month basis.  Piracy suppliers began to supplement those basic services with the hijacking of programmatic advertising and custom malware development.

AVIA’s submission to the USTR noted that piracy websites targeting and accessed by Vietnamese consumers are run by locals, using offshore cloud services and proxies such as CloudFlare, which have been out of the reach of law enforcement.

On the vendor side, pirate operators have long been able to commission the design and manufacture of illicit streaming devices, pre-configured to access illegal services and professionally packaged for sale at retail.  The 2017 beoutQ piracy case was one example.

Video processing for pirates

In its 2024 submission AVIA recognized the next step in this evolution: piracy enablement that extends to the re-processing of the stolen content itself: “(In China) circumvention video encoder companies … provide hardware and software updates that undermine detection of watermarks deployed by copyright owners.”

One vendor offers a “1U Rack-mounted video encoder … designed for HDMI Video hashcode / watermark / fingerprint / logo removal, hiding or blurring on the fly. It (has) 8 channels HDMI input, real-time H.264 encoding, (and) output(s) RTMP/HTTP/UDP/RTP TS and ASI for DVB.” A real eye-opener.

AVIA also characterized China as “the epicentre of the manufacture, export and distribution of both ISDs and pirate IPTV apps, mostly Android based, which enable access to pirated live and recorded premium content.”  China-based companies … also offer support services in the form of (i) hacking expertise that extracts the decryption codes to access legitimate content streams and (ii) network services that relay these codes around the world.

Further reading

Comment from Asia Video Industry Association.  Public Submission. January 30, 2024. Docket (USTR-2023-0014), Accessed March 1, 2024. Office of the US Trade Representative

Special 301 submissions by IPR stakeholders give USTR an earful.  Article. March 6, 2024. Piracy Monitor

Asia Video Industry Report 2024. November 2023. Asia Video Industry Association

Why it matters

The message by AVIA should be loud and clear: Site blocking regulations are successful and the US should follow suit to enact its own. Effective and common best-practices have begun to emerge, which can serve as examples to US regulators.  AVIA also solicits support and advocacy by the US Trade Representative to help resolve issues that the US and AVIA’s members have in common.

AVIA is a major voice for rights holders and the greater video industry ecosystem in the Asia-Pacific region.  The organization is an advocate for the industry, partnering with governments across the region to help them establish regulatory frameworks against piracy.  For example, AVIA has supported regulators in Indonesia, Malaysia, Singapore, the Philippines and in other governments in formulating site-blocking policies.

AVIA was founded in 1991 and currently represents about 80 companies, located in 17 Asian countries and regions, providing television programming, and curated Over-The-Top (OTT) content to over 700 million homes in Asia and Australasia. In addition to the multinational television networks and programmers, our members also represent leading corporations who are telecom companies, suppliers and manufacturers of cable, satellite and broadband video technology, related business service providers, and new media service providers.

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