Piracy takes toll on Philippine industries

MANILA, Philippines — Online piracy continues to take a toll on the Philippine economy, with losses running up to billions and thousands of workers in linked industries getting deprived of opportunities, advocacy group CitizenWatch said in a statement as it also urged the government to act fast to reverse these effects.

“Many Filipinos have already lost their jobs due to piracy before the pandemic,” said lawyer Tim Abejo. “The lockdowns worsened their situation. It’s time the government stepped in through stronger legislation and better enforcement.”

The economic consequences of online piracy have been tracked by numerous organizations.

As early as 2010, copyright-based industries contributed 14.14 percent to Philippine employment. Such industries were also responsible for 7.34 percent of the gross domestic product in the same year, according to a 2014 study carried out by IPOPHL and commissioned by the World Intellectual Property.

Ten years hence or in 2020, at the start of the pandemic-induced lockdowns, online content piracy was estimated to have translated to P1 billion in potential revenue losses to local video producers, distributors and aggregators in 2020, according to a study by Media Partners Asia.

The same illegal online activities also deprived legal subscription video-on-demand services of some P6.3 billion in 2020, according to a study that placed the Philippines in third place in terms of VOD piracy in Asia.

“Rampant piracy in the country makes investors reluctant to invest in Philippine content production,” Abejo said. “That is a sure way to kill not just a huge economic potential and the genuine spirit of creativity and innovation among our people.”

The Philippine movie industry, in particular, felt the blow through low admission numbers in cinemas. The Film Development Council of the Philippines said that in 2017 – years before the pandemic struck – admission rate was only between 14 percent and 18 percent, out of a population of 104 million.

The council also said the entire chain of workers in industries related to filmmaking were suffering from the ongoing copyright infringement and piracy. This included not only actors, producers and directors but all workers involved in the production of a film – composers, make-up artists, and crew.

The pandemic worsened this already dire situation, according to the 2022 Asia Video Industry Association Report. The 2020 Metro Manila Film Festival, in full digital format, only gained three percent of gross revenues realized the previous year. Piracy has been identified as the main culprit.

Aside from the economic toll on the creatives industry, Abejo said, “The raging issue of e-sabong is yet another case where illegal websites operating outside the regulatory authority of PAGCOR are accepting bets emanating outside the Philippines and targeting our OFWs.

These illegal e-sabong websites do not care if they encourage gambling addiction and underage gambling. E-sabong pirates have stolen billions in fees due to government and hampered the enforcement of the presidential directive to close these operations,” Abejo said.

“All these point to the incontrovertible fact that piracy is crippling the growth potential of linked ecosystems of digital innovators,” Abejo said. “The government and legislators must now step in.”

Abejo said that the government should help turn Filipino talent potential into an industry that is thriving and competitive.

“We have the creative assets to produce globally marketable content instead of just being a source of creative talent for foreign companies,” he said.

Among the concrete measures that can be taken by the government, specifically by Congress, is the amendment of the Intellectual Property Code to give the IPOPHL greater administrative enforcement power and enable the NTC to block sites more swiftly.

Currently, sites can be blocked within two hours from the release of an order from the National Telecommunication Commission.

“But more could be done,” Abejo said. “Site blocking needs a strong legal mandate and be extensively enforced to have observable, substantial impact.”

He said studies have shown that site blocking only decreases piracy if a good number of sites are blocked. “If just a few sites are blocked, then the users would only go to other unblocked sites.”

Amendment of the law would also allow for greater information sharing and development of effective site-blocking processes, Abejo said.