Convergence panel misses opportunity to make Singapore a media market leader

EVEN as South Korean sensation Park Jae-sang, better known by his stage name Psy, was preparing to perform for thousands at Marina Bay Sands, the local media industry seemed to be doing its best to rein in the free-wheeling Internet that shot him to unlikely stardom.

On Nov 28, the government-appointed Media Convergence Review Panel, comprising local broadcasting industry heavyweights StarHub, Singapore Telecommunications and MediaCorp, released a 65-page report that called for a tougher stance on digital media distributors and online piracy. "Local players are now increasingly exposed to overseas competitors who deliver content over the Internet, but are not subject to local regulatory obligations," the report says. "How do we rebalance the playing field?"

Among the principal recommendations of the panel, which also includes representatives from Google and Samsung Electronics as well as academics and consultants, is that foreign content providers must comply with local standards and regulations if they are targeting the local market. According to the report, copyright and digital piracy challenges can be tackled by blocking local access to the offending websites.

A day after the report was released, broadcast industry association CASBAA put the boot in with another report arguing that local consumers are turning to piracy despite having easy access to a wealth of affordable content. In fact, Singapore has the world's fifth-highest per capita infringement rate in terms of illegalof TV programmes, according to analysis from Media Partners Asia, an independent analyst firm, and MarkMonitor, which helps companies protect their revenues by monitoring illegal distribution of digital content.

CASBAA says rampant copyright infringements and piracy is no reflection of consumers' lack of legal access to the digital media content that they crave. It points, for instance, to the Season Pass offering by SingTel's pay-TV brand mio TV, which gives subscribers access to US TV shows 24 hours after the US telecast. Then, there is StarHub's just-launched TV Anywhere, which allows subscribers to watch content on their phones, tablets and PCs. Both SingTel and StarHub are members of CASBAA.

John Medeiros, chief policy officer of broadcast industry association CASBAA, figures that consumers in Asia are simply more inclined to download pirated content than consumers elsewhere in the world. "There's piracy everywhere, but I think the propensity to look for pirated sources of content is higher in Asian markets," he says.

Should these ideas and assumptions become the basis of regulatory policy, consumers in Singapore would be worse off. It would also do little to protect the interest of the artistes who produce the content. The only winners would be the local broadcasters and pay-TV players. And, even they would face an uphill battle as advancing technology makes bootleg TV content increasingly available.

Singapore is a tiny market for media content. So, it makes little sense to force foreign content providers to comply with local standards. Instead, the government ought to adopt a liberal, pro-innovation policy stance that enables local incumbents as well as foreign interlopers to competitively deliver content that local consumers want.

Choice and flexibility

Thanks to the lobbying efforts of media industry groups such as CASBAA, piracy is now widely accepted to be evil. Yet, why do ordinarily law-abiding people choose to download pirated content and visit illegal streaming sites?

The fact that the illegal content is free is only one reason. Another reason is that these sites fully empower consumers with choices. They can view content not available from the local incumbents and they can decide whether they want to view it on a PC, tablet or other device. They don't have to fill in forms, queue at a counter, pay installation charges for hardware they don't want or subscribe to an ancillary service they don't need.

Providers of legal content that similarly empower consumers are proving to be hugely popular, despite charging for content. Apple's­ iTunes is an example. You can find old seasons of popular TV dramas, choose to buy an episode or entire season, and watch your purchases on your TV, iPad, Mac or iPhone. There are no monthly fees. Amazon Instant Video, by Amazon.com, is another. It also offers a rental option. Not surprisingly, both services are popular in the US.

In fact, their offerings are so compelling that more and more Singapore consumers are willing to fork out an additional monthly fee, to a third party, for a virtual private network that will allow them to circumvent geographical restrictions and buy content from those platforms. Both Apple and Amazon are filling a void in the market for quality, paid content with choice and flexibility.

Learning from history

These players seem to have learned from history. At the turn of the century, the music industry fought hard to close down peer-to-peer (P2P) download services facilitated by Napster and Kazaa. While courts ruled in favour of the industry's big music companies, P2P music downloads continued to flourish for a long time because technology made it cheap and easy to build copycat services.

In the end, it was the music companies themselves that were forced to adapt by generating revenue from concert tickets, lowering the price of their music and — most importantly — embracing new methods of digital distribution. Where the option is available, music lovers have now largely given up P2P file sharing in favour of Apple's legal and paid-for iTunes.

In short, services such as Napster and Kazaa were innovative pioneers in music distribution that paved the way for the success of iTunes. Thanks to them and regardless of what the industry bigwigs say, consumers are better off now. And although Universal Media Group, one of the world's top three music companies, has seen its revenues fall over the last six years, great music is still being made and the artistes are still being rewarded with fame and fortune.

Now, Singapore ought to push its local broadcasters and pay-TV players towards an operating model that's winning the likes of Apple and Amazon global market share in the distribution of TV content. And, foreign players ought to be given more liberal access to the local market.

Will this more liberal policy route work in Singapore? What is the downside? Is there a risk in allowing disruptive technologies to flourish in the local media industry?

Fostering creativity

A key problem for the media industry is that Singapore is a relatively small market, says Medeiros of CASBAA. "You have 300 million people in the US and 5.3 million in Singapore. In the US, an operator like Amazon or Apple can launch an offering [that] costs a lot of money because of the infrastructure, but they can anticipate getting a certain number of subscriptions. Not only in Singapore, but in many of the Asian markets, because they are so fragmented, it's not easy to generate a business model that makes sense."

However, Singapore can improve its attractiveness as a market by liberalising its regulations and positioning itself as a test-bed for content providers such as Apple and Amazon that want to expand in Asia. While Singaporeans might download a large amount of content illegally, they aren't big originators of pirated content. In fact, they are eager adopters of legal online media services.

When iTunes finally launched its content library here this year, for instance, my Facebook feed was flooded with status updates from friends who were overjoyed that they would now be able to buy movies instead of having to download them illegally. Surely, that makes us an ideal focus group of sorts for new media providers to tweak and hone their Asian offerings.

One common problem they may encounter is consumers' or regulators' baulking at TV-content objectionable to the sensibilities of Asians. Indeed, it wasn't long after iTunes launched its content library in Singapore that it ran up against a regulatory roadblock over its distribution of movies rated R21 here. After the Media Development Authority contacted Apple, those videos were removed from the Singapore iTunes store.

Local pay-TV providers have since been allowed to distribute R21-rated content on their platforms. That's as long as they put in place publicity to educate consumers on the safeguards for R21 movies. In addition, they are allowed to offer only R21 titles that have been previously classified by the Board of Film Censors for commercial release. These titles are not available to corporate subscribers such as coffee shops, community clubs and hospitals.

Panel chairman Koh Boon Hwee says a consistent licensing framework for both traditional and new media platforms is "important to provide a level playing field for industry players while ensuring that their services are attuned to community norms and expectations". He also says in an email response to The Edge Singa­pore that "there is no presumption on the panel's part that this means that regulation will be tightened".

Yet, forcing foreign content providers to conform to a long list of regulations could result in Singapore's missing an opportunity to make itself a market leader. But, it's not too late.

Perhaps the lesson our small media industry can learn from Psy's meteoric rise is that underdogs have much to gain by embracing the Internet's permissive culture with creativity and ingenuity. Featuring catchy music and distinctive dance moves, his Gangnam Style music video has been copied, forwarded and shared as well as been the subject of numerous memes produced by YouTube users. It all probably involved some copyright infringement. But the pudgy South Korean, who performs in a language few people in the world actually understand, probably doesn't mind. By some estimates, his proverbial 15 minutes of fame will earn him some US$8 million this year.

This story first appeared in The Edge Singapore weekly edition of Dec 10-16, 2012.

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