Spanish government cracks down on piracy<br />

Judges enabled to clamp down on Europe's worst offenders

MADRID -- More than two years after Spain's largest broadcaster Telecinco filed a lawsuit against YouTube over piracy concerns, the Spanish media industry is finally getting some government help in combating pirates who are stealing an estimated 5 billion euros ($7 billion) annually.

A move last week to empower judges to work quickly to shut down pirate operations will go a long way in the battle to mitigate the impact of illegal downloads, readily available fake DVDs, and a consumer culture that considers viewing movies and television via the Internet for free as just fine.

And Spanish broadcasting giant Telecinco recently merged with start-up Cuatro to create Spain's largest free-to-air media group and piracy has been mentioned in dispatches as a major contributing factor to the bulk-is-better-for-survival message the merger carries.

Telecinco secretary general Mario Rodriguez said: "The fact that our content can be found on the web -- often simultaneously -- in their entirety affects us because it steals audience."

Rodriguez points to shrinking audiences leading to falling advertising coin. "The moment the audience knows that it can find attractive content from Telecinco at a different time, whenever it wants, on the Internet, it interferes in loyalty to Telecinco," he said.

Telecinco requests a court injunction against thousands of files hung in YouTube every week, Rodriguez said.

"The moment this behavior (YouTube) is not only not prosecuted, but is applauded by the public and consented to by authorities, the only thing we're doing is encouraging behavior that has no legal base," he said.

The Spanish government is, at long last, trying to address the country's piracy problem. And problem it is. Spain is Europe's premier pirate harbor. An exhaustive independent study of Spain's digital content market with updated piracy figures is due out in February this year

But the Coalition estimates Spain was responsible for 20% of the illegal downloads worldwide of the top 10 most popular films in 2008, and clocked 350 million illegal downloads of cinema in 2009. The coalition puts the cost of illegal downloads to the entertainment sector in excess of €5 billion in Spain in 2008.

Industryites and law enforcers alike -- until this week -- have pointed the finger primarily at the government for lax laws and poor enforcement. No one has been made to walk the plank.

But all that might change. Certainly last Friday's proclamation that a judge can order a website closed for offering the illegal download of movies and music within four days of a lodged complaint may mean that Spain is finally unleashing a broadside against the pirates.

"Until now, to create an illegal website takes just one day and to close it takes an average of four years," said Joan Navarro, head of the Coalition of Industries and Creators of Content. "This measure looks to abolish that impunity."

Further recent moves demonstrate the government's fresh firmness. Last month saw the creation of an inter-ministerial committee designed to attack piracy and police followed up days later with the highly-publicized arrest of an uploader operating a website responsible for an estimated 12% of the worldwide illegal downloads of films in Spanish.

"Closing the websites will solve a big part of the problem for film and videogames," said Jose Manuel Tourne, head of the Anti-Piracy Federation (FAP). "They're finally starting to get tough with piracy committed for commercial purposes."

A handful of elements make Spain ripe for pirates, including consumers who expect to see new releases on DVD immediately, teleco operators who undervalue content to market broadband, and widespread black market vendors who flourish under the Spanish sun.



For many, even the new measures are like shutting the barn door after the horse has bolted.

Take Jane for example. She hasn't been out to the movies in months. With two children and a full-time job, she's just too tired to go. Home entertainment solves her problem. But the fact that she downloads those movies from popular peer-to-peer sites in Spain causes someone else another problem.

"I'd be happy to buy the DVDs from the rights owners. It takes a long time to download and I'm not always thrilled with the quality," she said. "But I'm not willing to spend 18 euros on a DVD, and you can find everything online while it's still in theaters."

Whereas in the rest of Europe, new releases account for 40% of DVD sales, they account for only 14% of the Spanish sales, according to the Spanish Video Union.

"The vast majority of sales are on catalogue," Tourne said. "Why? Because no one pirates catalog titles. We've lost the driving force in the home entertainment sector. It's already late."

And many fear piracy will affect new businesses like video-on-demand, which became an option following its government approval in August 2009.

"Setting up a new business requires a guarantee that there won't be unfair competition," said Octavio Dapena, head of anti-piracy for Spanish Rights Owners Management entity EGEDA. "It undermines a VOD service if the titles are already available for free online."

The next step -- most say -- has to be education. Spanish courts have penalized peer-to-peer for commercial purposes in the past, but have sent mixed messages on P2P use by end users thanks to definitions from 2006 that don't see the download itself as a crime, just its use for profit.

Spaniards haven't flocked to mainstream online content services such as iTunes, PlayStation and Xbox -- which launched in November in Spain. Legal options like EGEDA's Filmotech account only for 1%-3% of consumption. EGEDA, which offers 1,400 titles through streaming and download, said there were 100,000 viewings in 2009.

For some strategies such as Disney's KeyChest technology -- which enables consumers to buy films or television shows from various distributors, store them on remote servers, and play them on multiple platforms ranging from TVs to computers and phones -- are the future.

But for free-to-air television and film producers, the key is that the government makes good on its word of getting tough on piracy.

"There has never been so much cinema watched as now, and never so much through Internet," said EGEDA's head of Digital Content Rafael Sanchez. "If access to illegal portals is restricted, consumers will have to turn to legal options."
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