Mobile applications are giving music and entertainment pirates a dose of their own medicine.
A music industry executive says mobile apps have come to the rescue of the Philippine music and entertainment industry from digital pirates by offering a strong price point at P129 a month for an unlimited access to songs and movies, beating the cost of pirated items.
“I think embracing innovation is really the key to defeating piracy,” says Philippine Association of the Record Industry Inc. chairperson Marivic Benedicto, who is also the head of Music Publishing and New Media for Music at ABS-CBN Film Productions Inc.
Benedicto says mobile platforms Spotify, Youtube and iflix are giving the music and entertainment industry a second wind and an opportunity to recoup the amount it is losing to pirates or intellectual property thieves.
“With Spotify and Youtube, and eventually Facebook being monetized, we are looking at going back to where the record industry was, in terms of investing in new artists and song writers,” Benedicto says in a news briefing in Makati City during the celebration of the World Intellectual Property Day.
“I think Spotify has reduced music piracy by 95 percent,” she says, adding that Spotify is now the preferred music platform of millennials, because of its mobile-first design and multiple-screen features.
The key, she says, is the P129-a-month price point. “That is a good start. Iflix followed with P129-a-month offering. It seems to be an effective price point. Now, the Philippines is the fastest growing market for Spotify. We also rank No. 14 among Spotify markets in the world,” says Benedicto.
Benedicto says Spotify gives about 70 percent of its earnings to content providers, which is shared by the record label, composers and song writers. She says Youtube also gives out 55 percent of its earnings to content providers.
“What’s P129 versus buying four DVDs for P100. You pay P129 a month and you get 21,000 hours of content on iflix and thousands of songs on Spotify. In a CD, there are only 100 songs or MP3s. And there is no parallel between pirated experience and legitimate source,” she says.
Benedicto says Spotify particularly changed the industry and gave Filipinos a legitimate platform to access music digitally. “People now don’t bother to go to pirate sites, because Spotify is also free, although it has a premium model at P129 a month. With Spotify having no borders and published worldwide, the Filipino music has been discovered in other territories. We have a few artists who are being listened to in countries like Taiwan and Malaysia. Of course, it is not yet like the 1980s, but we are already starting to get back the revenues, get back the investments. Record labels are having more courage to develop, to invest in new genres. It is helping artists a lot, because it is a borderless platform. You can get discovered everywhere,” she says.
“Last year, the International Federation of the Phonographic Industry declared there was no longer music piracy. Of course, there still is, but it is no longer a significant issue, because everybody is now on the legitimate platform like Spotify and Youtube,” Benedicto says.
Sherwin dela Cruz, the country manager of iflix, says the subscription video-on-demand service also changed the consumption of entertainment content and gives people a better viewing experience than those offered by pirate sites.
“We really had to pinpoint a good pricing so that we can really scale. For us, the price we offer in the Philippines is P129,” says dela Cruz, adding that the subscription fee gives users 21,000 hours of high-resolution content on iflix, compared to P100 for just three or four DVDs of pirated movies.
“I am happy to announce that so far, we had 1.2 billion minutes streamed on the site,” dela Cruz says.
“I firmly believe that we can offer a better service, we can offer more choices, we can offer more content at a price that people do not really mind. Piracy is not actually free. People actually pay for it, like in the cost of CDs. It is just going to the wrong pockets,” says dela Cruz.
Benedicto, however, concedes that composers would never be able to experience what they had in the 1980s. “A gold record used to be 90,000 units in the late 1990s. Now, it is down to 7,500 units. We now have one legal replicating plant in the Philippines. There used to be four. SM has already removed the record bars in its department stores,” Benedicto says.
Data from the Philippine Association of the Record Industry Inc. show that the Philippine music industry had total sales volume of 791,310 with trade value of P159.916 million in 2016.
Benedicto says the industry began to accept that the way people consume music is changing. She says this is why players in the music industry cooperated and gave Spotify a try in 2014. “We talked and agreed to their terms to see how it works and take it from there. Spotify offered a minimum guarantee for the country which at first was very small. After two years, the minimum guarantee they are offering now is 15 times that amount. You can see how the market grew in the last two years,” says Benedicto.
“We were skeptical at first, but we saw how it could help address the problem of piracy. We are number 14 now in the world in terms of the number of subscribers at Spotify. The Spotify model was so successful because it was not very far removed from the experience of the consumer. They were getting it for free, and it is 100-percent legal,” she says.
Wilson Tieng, president of Solar Entertainment Corp., says IP thieves still make millions from stealing creative content from computers and mobile devices. “Criminals, operating individually or in groups, bait visitors by the prospect of gaining access to creative content. When baited, they use spywares and bots to access and/or control their victims’ devices remotely and steal their data, which may be used for identity theft and other malicious scams. These criminals make millions of dollars this way,” Tieng says.
“Users might not think much of the pop-ups, toolbars, ads, fake prompts and files downloaded covertly in the background as soon they visit the site, but these expose them to great online security and personal risks. We highly encourage Filipinos to use legitimate subscription-based content streaming services that provide safer access to a wide selection of content,” says Tieng.
Intellectual Property Office of the Philippines director-general Josephine Santiago says President Rodrigo Duterte signed Proclamation No. 190 declaring April as the national intellectual property rights month.
“An effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments and ensures market access for our products. IP also serves as a tool for improving the lives of people as well as promoting public good,” Santiago says.
The Philippines has been out of the US Trade Representative Special 301 watch list for three consecutive years now. Last year, Filipino authorities confiscated P6.5 billion worth of pirated or counterfeit goods. Santiago is hopeful the Philippines will remain out of the watch list when the USTR discloses its next annual report on April 30.
Brian Breuhaus, trade officer of the US Embassy Manila, says countries with strong innovation and IP rights protection also perform well economically. He says 52 percent of goods exports of the US and 38 percent of its gross domestic product are tied to IP. Industries with IP products also employ over 45 million Americans and hundreds of millions worldwide, he says.
Santiago thus urges all Filipinos to “join us in our advocacy of defending the rights of creators, innovators and inventors and in fighting infringement, piracy and other forms of IPR violations.”
