Broadcasters take on internet content distribution in Indonesia

An interesting court case in Indonesia aims to answer the question, has the internet in effect replaced broadcasting? Indonesia’s Broadcast Law uses a broad definition of what broadcasting is. As in many other countries it aims to manage the number of broadcasting organizations, issue expensive licenses and control content. There is a Ministerial department and a Broadcasting Commission overseeing them. There are restrictions on foreign ownership, rules on content, advertising and must-carry rules (which means certain local content must be shown).

Indonesia’s Constitutional Court (MK) is now being asked to conduct a judicial review of the Broadcast Law in a case filed by one of the country’s leading TV networks, MNC. They argue that Netflix and YouTube, which are offering live streaming services are caught by the definition of broadcast. Their position is that there is no level playing field, that they are required to have broadcast permits and follow many restrictions, but digital content distributors do not.  

The Ministry of Communications and Infomatics (KOMINFO) has given evidence that if the court agrees with MNC, that they would need to shut down all live streaming services, (known locally as Over The Top or OTT services), including Facebook Live, YouTube and other internet services. 

The problem is that the internet is gradually eating into the traditional broadcast sector. Twitter users have jumped in to criticize the case as grasping, from a dying industry with weak content and a profit motive.  These commentators contrast it to the diverse, free, more creative (they say) digital streaming sector. MNC would probably argue one of the reasons their industry is suffering is the heavy regulatory burden which a Facebook or YouTube live streamer abroad does not have.

Perhaps the case is leverage to pressure Parliament to reduce broadcast restrictions. Traditionally this is an area with political and sovereignty concerns. But the internet has overridden this now. Broadcasters need a simplified regulatory environment; if not they say, they face a difficult future. 

Indonesian digital/ecommerce IP enforcement

US entertainment industry groups remain unhappy with Indonesia's progress on IP enforcement. One major complaint is weak online enforcement. Recently Indonesia stepped up its site blocking of pirate websites – see here.  However until now domain hopping meant many sites reopened with new domains soon after.  The Ministry of Communications, KOMINFO now led by a new Minister since November, runs the national site blocking system covering a range of negative content and seems keen to improve its blocking of IP violations. 

The International Intellectual Property Alliance (IIPA), makes an annual submission to the US Trade Representative each year. IIPA represents the movie, publishing, games and music industries.  IIPA is taking the position that the US should suspend Indonesia’s GSP trade benefits unless there is an enforcement improvement.  There is no doubt Indonesia has taken some steps. But more is needed.  On site blocking specifically they are asking for a more efficient system to block sites and prevent them hopping. A second problem is illegal camcording in movie theatres, so is live streaming piracy.  Piracy apps and set-top boxes deliver pirated content – this needs a program to take action against the sellers. IIPA asserts that in 2019 progress stalled or even regressed. 

There are multiple regulations and laws relating to IP violation online, and coordination across multiple ministries is needed to bring clarity and coordinated action. A UK Embassy seminar this week sought to bring all stakeholders together (IP Owners, ISPs, industry associations and 5 relevant government Ministries all attended).     

Indonesia ratifies Beijing Treaty and Marrakech Treaty

Indonesia has ratified the Beijing Treaty and the Marrakech Treaty, two multilateral copyright agreements. The Beijing Treaty covers audio-visual performances, especially reproduction, distribution and rental of these copyright works. The Marrakech Treaty allows the reproduction and transfer of specially-adapted products the visually or impaired (apparently over 3.5 million people in Indonesia) by establishing a set of limitations and exceptions to copyright law.

More specifically the Beijing Treaty protects performers by granting 4 rights: (i) the right of reproduction (direct or indirect) of the fixation of their audio-visual performance; (ii) the right of distribution of copies of the fixation of their audio-visual performance; (iii) the right commercial rental of copies to the public; and (iv) the right of making available to the public, which nowadays relates more to wireless (or wire) internet access including streaming and downloads.  

There are also rights over unfixed live performances  - the right to broadcast, communicate to the public (apart from broadcasts, i.e. online) and the right of fixation. The Treaty also give performers moral rights, including the right be identified as the performer and the right to object to distortion, mutilation or prejudicial modification. There are rules on transferring rights to producers, incorporation of the Three Step Test for exceptions and limitations purposes well as remedies against circumvention of technological measures (e.g. encryption) used by performers.

Indonesia has a vibrant creative economy and performers struggle to get fairly paid. Indonesia is the thirtieth country to ratify the Beijing Treaty, fulfilling the minimum requirement for it to come into force in April (despite the EU and US not having agreed to it).  

Both Treaties operate under the World Intellectual Property Organization (WIPO). Indonesia will therefore need to amend its copyright law to give effect to these.

Major SE Asian piracy site shuts and reopens

Indoxxi is one of the most famous movie piracy sites in Asia. Alexa ranks it in the top 1000 websites worldwide, and top 100 in most Asian countries. An Indonesian piracy group, funded by online add click systems, operates vast numbers of illegal piracy websites offering foreign and Indonesian movies. In fact Indoxxi sites have been repeatedly closed, but they reopen offshore by domain hopping to new sites immediately. It has been flagged by the USTR as a notorious illegal piracy site. But no action has been taken by authorities other than site blocking. 

Then after several years of operation, Indonesia’s newly appointed Minister of Communications and Information (KOMINFO), Mr. Johnny Plate acted to shut down a large number of piracy sites in December, citing the need to protect creativity and investment. Then at the same time Indoxxi announced that to was closing down as of January 1st. Within days mirror sites with similar domains were up again. So its not clear if this was just a ploy to hide the fact that they would reopen and just dodge the KOMINFO blocking tools. Given that Indonesia blocks many times of non approved websites (gambling, pornography), it is not clear why piracy sites are so easily able to avoid the censors. 

Creative sector in Indonesia

Indonesia has for some time had a strong focus on creative industry development. It’s a sector worth tens of billions to the economy and is growing. A government department called Bekraf leads the sector. See herefor background. Bekraf has for some time played a major role assisting research, funding, start up infrastructure, marketing, intellectual property and other training and assistance.

Following April’s elections the President has announced a new cabinet. There have been rumours of tying up the huge digital economy, including the vibrant start up world, with the creative sector into a new Ministry.

Instead Bekraf was merged into the Ministry of Tourism and Creative Economy. In fact this is the ministry it started its life as a department in.  Wishnutama Kusubandio has been appointed Minister. He is a former journalist, TV producer and TV company executive. The President also appointed Deputy Tourism and Creative Economy Minister Ms Angela Tanoesoedibjo (formerly of MNC, a media company). They are definitely the right fit. 

However the creative sector has become a major part of Indonesian commerce, driven by e-commerce. The travel sector has close connections to the creative sector, in tickets, bookings, ride sharing and so on. There are many creative sectors that focus on the travel sector too – F&B, media, publishing etc. But the wider start up, digital and ecommerce business beyond travel, is much larger. IS it limiting to put it next to tourism?

A worry is the government missed an opportunity to drive the digital and creative sectors together into something much bigger. Digital regulation still sits under the Ministry of Communications and Informatics. It too has a major role in the start up ecosystems too. Will the two ministries overlap, have conflicting roles and how will they cooperate? This at a time when convergence in the creative and digital sectors will become extremely fast. It has been said that Indonesia is entering a ‘scale-up stage’ for many of its creative and digital businesses. Will multi-ministerial backing be effective? Will the next creative tech start ups be able to thrive? Will cybersecurity, data, and ICT become barriers to the creative sector because of the differing ministries?

Of course its still too early to see how this will play out; but the two ministries will need to work closely if Indonesia’s huge digital and creative sectors are to reach the potential the analysts say they have.

Fake Aboriginal artwork from Indonesia

In October 2018, a company called Birubi Art was fined by the Federal Court of Australia for selling fake Aboriginal artworks that were actually made in Indonesia.  Between 2015 and 2017, more than eighteen thousand (18,000) units of boomerangs, bullroarers, didgeridoos and message stones were sold to retail outlets around Australia by Birubi Art falsely labelled as “Aboriginal Art”, genuine” and “Australia”.   The Federal Court of Australia confirmed Birubi Art had “breached the Australian consumer law” and fined them AUD$2.3 million. This was an unusually large penalty due to the “serious cultural harm” to genuine Aboriginal artwork,“not just direct economic loss but a weakening of the value of the authentic products”. The belief is these were imported, perhaps smuggled into Australia from Indonesia.  

Fake art in Indonesia is unfortunately well known. The Indonesian Fine Art Lovers Association (PPSI) concedes that replica art is acceptable as long it does not display a forged signature of the original artist or have the blessing of the artist’s family.  To address this issue, PPSI published a booked titled Melacak Lukisan Palsu (Tracing Fake Paintings) to address art forgery in Indonesia.  Renowned Indonesian artists such as S.Sudjojono, Hendra Gunawan and Lee Man Fong are among the most widely forged in Indonesia.

Indonesia’s online streaming piracy

Copyright piracy today is largely driven by illegal streaming of television and video content. A key concern in the last few years has been tackling the sale of illegal streaming devices  like physical boxes or USB sticks that plug into a TV. The boxes often come pre-loaded with illegal applications allowing ‘plug-and-play’ access to pirated content. The Illegal streaming devices are often referred to as ‘Kodi boxes’ or Android TV boxes. Kodi is in fact a software and a free and open-source media player that allows people to play and stream video content. These boxes run on a legitimate software which is why they are widely available.

 

In Indonesia, according to a recent survey conducted by YouGov, it was found that TV set-top boxes that can stream pirated video content are used by 29% of online viewers in Indonesia. This survey, commissioned by the Asia Video Industry Association (AVIA) Coalition Against Piracy (CAP), found that the IndoXXI Lite, LiveStream TV and LK 21 Reborn are the most popular illicit streaming devices (ISDs) in Indonesia. This impacts international subscription services which include pan-Asia online offerings as well. Of the 29% of consumers who purchased an ISD for free streaming, two in three (66%) cancelled all or part of their subscription to legal pay-TV service(s) in favour of ISD free streaming. The surge in popularity of ISDs occurs throughout SE Asia and beyond.

 

Many of these devices come with security threats. The content industry also cites concerns about malware. Security experts have warned how hackers can exploit these devices to infect consumers’ computers and other devices. But owing to the low cost of these boxes and availability of free content, the users, most of whom belong to the younger generation, are perhaps not concerned as much about issues of malware. However, the loss of subscription services and harm to businesses in the production and distribution of legitimate content is an economic problem and a major concern across the whole industry, both on a local and international level.

 

 

 

 

 

 

Local movies and piracy in Indonesia

 

It is often said that governments work to improve IP when their own industries suffer. The Indonesian film industry was widely reported this week as complaining about losses of IDR 1.5 trillion (over $100 million) due to content and DVD piracy. It conducted research across the country and found that most Indonesians download illegal films online or buy pirated DVDs.  

The biggest reason, the research indicated was that most people had no idea that watching movies that way was illegal in the first place.  Not many genuine movies are available in DVD format any more, but pirate DVDs made in Indonesia are widely available.  Newer online services like Netflix, Iflix and Hulu have only just started and are only available where bandwidth is high in cities. They are still more expensive than DVDs too. Peer to peer downloading is also a problem due to the availability of pirated content on sites.  This was ultimately a bigger cost to the movie companies because illegal downloads in cities take customers away from cinemas.

Another major reason is poor access to movie theatres. "People are drawn to pirated content because it’s cheap, and for those in remote areas it's the only way to watch films," the researchers stated. There are a little over a thousand movie theatres in the country with many of those in the capital Jakarta.

Indonesian movie association Aprofi regularly reports illegal streaming and download sites. The Justice and Human Rights Ministry works with the Ministry of Communications and Informatics to shut them down. Aprofi reported over 300 sites in 2017. While many are taken down it is time consuming and in practice, doesn't always happen.

The solutions are more nuanced than just sporadic blocking of a few sites once a complaint is made. It is necessary to target multiple streams, mirror sites, to co-opt IPS assistance and take a far more aggressive approach at stopping the access to illegal content.  Clearly blocking 300 so sites a year is not getting the industry anywhere. Apart from improving the legal remedies, there must also be accessible genuine movie channels, (so thousands more movie theatres – and jobs!), cheaper and more easily accessible genuine online content as well as more anti piracy education.