V I D E O • A G E SE P T E M B E R/ OC T O B E R 2 0 1 2 (Continued from Cover) Content Piracy in LATAM noted Gustavo López, vice president and regional counsel of Discovery Networks Latin America and U.S. Hispanic. “This discussion provided an opportunity to evaluate new approaches to this dilemma and ways of applying existing legislation.” The “Intellectual Property Summit” was organized by the Uruguay-based Center for Telecommunications Development Studies and Social Access to Information in Latin America (CERTAL), the Argentina-based Latin American Federation of Judges (FLAM) and the University of Miami. The summit was held at the University of Miami Law School, and on the third day, Discovery Networks sponsored a roundtable titled “Intellectual Property, Piracy from a Programmers’ Perspective,” which was moderated by Alejandro Harrison, CEO of Pramer, Argentina. The roundtable panelists included Discovery’s Gustavo López; Lorenzo Rainer, senior director for Legal and Business Affairs at HBOLatinAmerica; Ana Siegel, senior vice president and general counsel at Fox Latin American Channels; and Francisco Escutia, executive director of Latin America Anti-Piracy and Intellectual Property Consulting. The roundtable was held at Discovery’s Miami offices. After a welcoming introduction by Enrique (Henry) Martinez, president and managing director of Discovery Networks Latin America/U.S. Hispanic, the panelists proceeded to illustrate the various issues facing the industry in LATAM. Fox’s Ana Siegel said that the “fight against piracy is very expensive,” but, as was pointed out by a participant in the audience, it can bring results, as was the case with Fox’s anti-piracy campaign in Venezuela eight years ago. Similarly, HBO Latin America’s Lorenzo Rainer recalled the success in stopping illegal distribution of originallanguage high-quality movies from Cuevana.tv, one of Argentina’s most popular online streaming sites. During a telephone interview, Discovery’s Gustavo López told VideoAge there are four basic forms of content piracy in LATAM, each flourishing in different parts of the region. For example, in Ecuador, the most problematic area in terms of piracy, the main culprit is illegal systems, both cable operators and satellite set-top boxes (STB). This is the same problem found in Brazil. Throughout the region, made-in-China AZBoxes, which are used to pirate satellite signals, are sold wholesale at U.S.$10 each for quantities of 500 pieces. In Mexico, piracy is manifested through good old DVDs. In Colombia, the issue concerns cable systems under-reporting their subscribers in order to pay less to content providers. In Argentina, which is a more technologically advanced country, the key problem with piracy comes from illegal streaming. López was reluctant to quantify revenue losses that piracy in LATAM causes content providers, but he indicated that, in the case of underreporting subscriber numbers, losses could reach 50 percent. Considering that the pay-TV business in Latin America is a $10 billion annual business with 45 million subs, VideoAge estimated the losses from piracy in Latin America at $1 billion per year just for under-reporting and illegal STBs. In terms of DVDs, in Brazil and Mexico alone, pirated goods represent a business estimated at close to $500 million a year (48 percent from Brazil, 71 percent from Mexico). In comparison, the IP software piracy business in LATAM is estimated at $870 million a year, or 50 percent of the total. While unwilling to put a monetary figure on the effects of piracy, López stressed that the losses are not just a concern for content providers, but for the local industries and government as well. Legitimate operators are seeing a loss of subscribers and less advertising income, while piracy represents loss of tax revenues for governments. In addition, illegal activities drive prices up, since content providers tend to increase per sub costs to compensate for losses due to piracy. For content providers, however, the answer is not to stress monetary losses but to educate regulators, local prosecutors and judges, and the public at large, and to work with the local industries, as well as to take advantage of technological solutions. Collaboration brings results and López pointed out last year’s success in Perú, where 40 cable systems were forced to become legitimate. Since individual content providers don’t have the resources and/or a structure to monitor illegal activities in the region, they depend mostly on the reports by legitimate local operators that are hurt by illegal activities. There are talks of forming an alliance for combating piracy in LATAM, reported López, but for now the industry has to be satisfied with meetings such as the Summit in Miami and one held in Paraguay last August. On the other hand, the MPAA has been active in monitoring movie piracy inLATAM, specificallywith its lobbying activities in Mexico and Brazil. Another U.S. agency involved with monitoring content piracy in Latin America is the U.S. Trade Representative, which has listed Argentina, Chile and Venezuela on its priority watch list of the worst piracy offenders. Similarly, the U.S. Chamber of Commerce, in addition to singling out those three countries, listed another 10 countries — Bolivia, Brazil, Colombia, Costa Rica, the Dominican Republic, Ecuador, Jamaica, Mexico, Perú, and Paraguay — as less serious offenders that were still criticized for failing to do more to enforce intellectual property laws. Enrique (Henry) Martinez, president and managing director, Discovery Networks Latin America/U.S. Hispanic The roundtable participants at Discovery’s Miami offices From l. to r.: Alejandro Harrison, CEO of Pramer, Argentina; Francisco Escutia, executive director of Latin America Anti-Piracy and Intellectual Property Consulting; Gustavo López, vice president and regional counsel, Discovery Latin America; Ana Siegel, senior vice president and general counsel, Fox Latin American Channels and Lorenzo Rainer, senior director for Legal & Business Affairs, HBO Latin America 48
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