The Boss: OSN chief on battling pirates on the airwaves

Legitimate Arab media companies have long wanted to sink the pirates, writes Ben Flanagan, amid claims the illegal copying and distribution of content costs them up to $500 million a year.

But the recent closure of a shop in Abu Dhabi that was selling illegal subscriptions to a popular Indian TV network suggests the authorities are also on board for the fight.

The shop, which was not named, was closed and fined Dh200,000 ($55,000) by an Abu Dhabi court, after it was found selling Dish TV set-top boxes. It can appeal the ruling.

Dish TV is a legitimate broadcaster in India, but the footprint of the satellite it uses spills over into the Middle East region, where the network does not own the regional rights for much of the content it airs.

This means residents can tune-in illegally to the service if they have the right equipment. Though other South Asian networks are also available, Dish TV is said to be the most popular, mainly among expatriate residents. Across the region as a whole, it estimated that up to a million households illegally tune in to TV networks that are not properly licensed in the region.

David Butorac, chief executive of the Dubai-based pay-TV network OSN, says governments of countries such as the UAE are increasingly aware of the wider economic impact of the Middle East’s piracy epidemic.

“They are recognising the economic impact on the economy of the Emirates, and indeed the wider economy of the region, rather than just seeing as it an issue for the profits for the broadcast companies,” he said.

Illegal piracy covers everything from knockoff DVDs, to internet ‘torrent’ downloads and the reception of TV networks not intended for this region.

Regional companies have formed the Broadcast Satellite Anti-Piracy Coalition – which includes networks like OSN and MBC Group, as well as telecoms and satellite companies – to help fight the rampant problem within the region.

Here, Mr Butorac explains why the war on the pirates will be long, but one worth fighting for both the media industry and wider economy.

Q&A with David Butorac, chief executive of OSN

David Butorac 3 - Copy

Q. How significant is the recent raid on the shop in Abu Dhabi found to be illegally selling Dish TV boxes?

This court judgement is a landmark for us because it just reinforces the seriousness with which government is now taking piracy, which is a very good step. The UAE government has been very proactive in the last six to 12 months – there is a lot more awareness now of the impact on the economy. It’s not just a matter of broadcast companies like ours and MBC being hurt. It’s a matter of the economy being hurt, because of the repatriation of illegal funds out of the country.

Q. What other evidence is there that the UAE government is taking a strong stance on piracy?

There is a real momentum. There’s been about 47 raids taking place in the last few months in the UAE, between the police and the economic department, on premises that are selling illegal receivers. We do expect there will be several more coming through the courts system. And it just sends the message very clearly that this activity is illegal, it’s not appropriate, and it’s not going to be tolerated by the government.

Q. On what kind of scale are such distributors selling these illegal satellite boxes?

These distributors are not just selling one or two boxes. They’re selling significant amounts of illegal boxes. There’s an estimate that there’s between half a million and a million illegal dish subscribers in the region. That’s spread out between lots of different dealers. The message very clearly to all of them is that the sale of these boxes is illegal and therefore they should not be doing it.

Q. How much is piracy costing the legitimate Arab media sector?

Industry estimates put it at $500 million a year. That’s the impact of piracy across the board when you take into consideration broadcast piracy and the sharing of files over the internet.

Q. So piracy makes up about a quarter of the revenues of the legitimate Arab TV broadcasters, estimated at about $2 billion a year?

It does give you some indication of the economic impact. If the revenues that are flowing illegally out of the country through the organised-crime groups that are orchestrating these sorts of pirate activities was curtailed and stayed within the economy, what it would sustain is a huge investment in creative skills, the production skill-base in the region.

Q. Why is that important?

The UAE government has taken a leadership position in investing in facilities – Studio City here in Dubai, twofour54 in Abu Dhabi. They are world-class, quality facilities. But what we lack as we create a proper production industry is the skills, the jobs, employment. I think the government is realising that the impact of piracy precludes the industry to create those sort of skills. The impact of piracy is unemployment, on the creation of skills, and indeed the repatriation of funds through organised-crime groups. That is I think why the governments are taking it seriously.

Q. Is Dish TV the only Indian network that can be picked up illegally here in the Middle East?

There is distribution of other platforms, but it is on a much smaller scale. Some of the other Indian networks are available here. But it’s nowhere near the volumes that we see with the Dish TV proliferation.

Q. Can the fight on piracy ever be won?

As an industry working together, we’re achieving strong strides in the fight against piracy and we will continue to do so. This is a fight that means a lot to our industry and it’s a fight that we will continue to resource. It’s a constant battle.

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