Face to Face With....... Ang Kwee Tiang - Regional Director, International Federation of the Phonographic Industry

Not long before this year’s first Number 8 Typhoon Warning Signal was hoisted, we spoke with Mr. Ang Kwee Tiang, the Regional Director for the International Federation of the Phonographic Industry (“IFPI”), which is caught in the perennial storm that is copyright piracy. He also gave us the lowdown on the region’s copyright industry, and how such laws should be strengthened in Hong Kong to boost the Fragrant Harbour’s flagging standing as a regional entertainment hub.

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Looking far younger than his 52 years, Mr. Ang intended to spend just three to five years in the copright industry – he has now dedicated more than 25 years to it, with more to come.

“When I first entered the field, copyright laws in quite a number of Asia-Pacific countries were non-existent or completely out of date. In fact, at that time, Singapore had only just completely revised its copyright law in 1987, having been relying on the 1911 UK Imperial Copyright Act till then,” recalls the Singapore-trained lawyer.

“The laws in the region were so lax that I said to myself: when I leave the industry, I will become a copyright pirate. Because when you got caught, you were just slapped with a small fine while making a few million dollars a day!”

He was clearly joking but it paints a grim but true picture: replication technology had been so far developed that laws in the 1980s were too inadequate to tackle infringing activities. Unfortunately, much of the same applies now, just with more advanced technology.

On the bright side, he observes, copyright knowledge and awareness is more widespread today, which helps governments pass copyright laws that carry more bite.

“For example, people know now that they cannot bring pirated DVDs or fake watches across customs and that in itself is a far cry from mindsets just a decade ago,” he notes.

Localisation of copyright laws

Copyright issues are governed by a number of international treaties, including the Berne and Rome Conventions, and the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT) – WIPO being the World Intellectual Property Organization. But the revision of the treaties to keep pace with technological developments is far from perfect, says Mr. Ang, who in his position represents the industry body of media giants such as Universal, Sony and Warner in Asia. These companies front the world’s biggest pop acts such as Rihanna and Lady Gaga.

For example, he says, revisions to the Berne Convention takes about 20 years, by which time piracy would have evolved even further.

“Local laws by contrast move faster, but it still takes on average 10 years to update such laws, and given today’s technology, that is still too slow.”

But while copyright is now a global issue, mainly because of the advent of the internet, Mr. Ang believes that international standardisation of laws would have to take into account the fact that different jurisdictions develop at different speeds.

While it is crucial that fundamental principles are in place - such as making illegal certain kind of activities and giving certain basic rights to recording companies - copyright laws must “adapt to local conditions, taking into account the legal, social and economic conditions”.

For example, Myanmar’s current copyright law is still the 1911 UK Copyright Act, despite the country’s well-publicised attempts to open up to the world economy. For this particular state, Mr. Ang notes, it is more urgent that it now updates its copyright laws and to provide protection for creations from other countries, than for it to say, introduce complex laws that target illicit online file-sharers.

“Obviously, Myanmar is not yet ready for the latest technological provisions,” he says.

“We have advised it to go for the basic principles, with the rest to wait until the country is more developed.”

K-pop Success

While some countries are “still quite left behind”, Mr. Ang is pleased to see more developed countries introduce rules such as the “Graduated Response System” - better known as the “Three Strikes Rule” - as part of copyright laws.

In South Korea, laws exist to allow internet service providers (“ISPs”) to suspend the accounts of repeated infringers and to block or delete the infringing online content. Similar Three Strikes Rules can also be found in other countries, such as France, the UK and New Zealand. As the name implies, a potential infringer is given three warnings, via the ISPs, before action is taken to block the illegally activity, or in more serious cases, prosecute him or her.

In addition to heavy investment in the creative industry by the South Korean government, copyright laws are also strictly enforced by the authorities; these are said to be the most effective in the world. Coupled with a constant investment in public anti-piracy awareness, South Koreans know quite simply what to do, or rather, what not to do.

“The (South Korean) government had the foresight to introduce the Graduated Response System at an early stage, was diligent in enforcing it, and they are now amending laws to give more rights to record labels,” Mr. Ang says.

While Cantonese pop music undoubtedly blazed the trail for Asia in the 1980s, its Korean counterpart, or K-pop, is doing so now. This, Mr. Ang believes, is down in no small way to the efficacy of copyright laws in South Korea.

“To us, the success of K-pop is no accident,” he tells the Hong Kong Lawyer.

“If you do not have the right copyright laws in place, no one would invest HK$10 million in an artist. That is the issue we face these days as it is more cost-effective for big recording companies to invest in say, an internet sensation like Justin Bieber, because then less money is required to nurture a talent from scratch.”

Hong Kong: Internet Article 23?

In Hong Kong, efforts are being made to improve copyright laws so as to reignite confidence and investment in the creative industries. A proposed Copyright (Amendment) Bill 2011 (the “Bill”) was put forward last year, and is now the subject of a three-month-long consultation exercise. It is however, not without its controversies, with critics slamming it for potentially curbing freedom of speech, given that certain infringements regarding parody carry with them criminal liability.

Mr. Ang sees this as a misunderstanding that will hopefully be resolved during the consultation process.

“The starting position of the Bill was never to infringe anyone’s privacy and the freedom to undertake what people are legally entitled under the Basic Law,” he says.

“It is simply a question of copyright protection.”

“Sometimes, it is just the question of people’s trust in the system,” Mr. Ang adds.

“But conversely, trust has to be earned.”

After all, he explains, people did understand the rationale when border controls were enhanced a decade ago to prevent the importation of pirated CDs and DVDs.

“Using that example, the general perception was that criminal sanctions were reasonable since such physical piracy went overboard and was threatening the livelihoods of the Hong Kong creative industries,” Mr. Ang says.

“But now that piracy is virtual, what are simply border controls and criminal sanctions in online form become something more sinister.”

He hopes that the Bill is passed quickly in order that for the Hong Kong music industry to rejuvenate itself. As it stands, he reckons, the total revenue of digital and physical music sales in Hong Kong is less than one-third the value as compared to 1997 - gross revenues then totaled some HK$1.35 billion, compared to HK$386 million in 2012.

For copyright laws to be effectively deterrent, he says, the provisions for business disincentive must be sufficient. This may have to include a degree of criminal liability, especially where profit-making pirates are concerned, as is required under the Agreement on Trade Related Aspects of International Property Rights (TRIPS).

Further amendments needed for Hong Kong’s Copyright Law

Even with the Bill implemented, Hong Kong’s Copyright Law still does not go far enough, Mr. Ang notes.

To bring this up to speed with other more developed countries, especially South Korea, two more parts of the law need to be amended, he says.

“The term of the copyright protection needs to be extended to 70 years PMA (post mortem auctoris, or after the death of the copyright holder),” he says.

“In Europe, US and Singapore, for example, the term is now 70 years or more. But Hong Kong is still at 50 years PMA.”

With more revenue generated by back catalogues, recording companies in Hong Kong can then therefore invest in new talent, and beef up quality and bottom-line as a whole.

The second provision Mr. Ang would like to introduce is “Internet Border Control” or sometimes called “Internet Website Blocking”.

This is now in practice in about 15 countries, he says. Some countries explicitly changed the law giving authority to some parties, like ISPs, to block the infringing websites while others, mainly in Europe, do it through judicial interpretation in court.

This method also circumvents the age-old problem of taking action in overseas jurisdictions, since blocking would be defensive rather than offensive. Granted, such authority will give rise to the same public misunderstanding as faced by the current Bill, with critics slamming it for limiting private freedoms. This can be overcome, Mr. Ang believes, once stakeholders explain clearly the tangible benefits that such laws bring.

For example, early this year, the IFPI, the Philippine Association of Recording Industries, and the Intellectual Property Office of the Philippines combined to bring down one of the biggest and most popular BitTorrent sites in the Philippines.

However, just one day after it was shut down, the site popped up again in another domain in Tonga, operating with the same functionality and content. There are indications that trace the site’s origin to a third country but among other issues, the taking of legal action there will be no simple task.

“Online border controls will work in such cases where the pirates come well prepared,” Mr. Ang says.

“In one stroke, this will prevent access to an infringing website that takes millions away from the industry… and taken away many jobs in the Hong Kong creative industries. After all, since 1999, the revenue of the global music industry has dropped by 50%.”

IFPI’s focus on mainland China

Unsurprisingly, the PRC has become a main focus for the IFPI, given the market’s huge potential for the global media industry. According to IFPI figures, the PRC music market in 2012 was worth just about US$92.4 million (HK$716 million) while the UK music market, the world’s third largest, stood at some US$1.3 billion.

This does not make sense, given mainland China’s 1.3 billion population compared to the UK’s 60 million, even after taking into account GDP differences, Mr. Ang says.

Though copyright infringement in mainland China remains a problem both physically and virtually, Mr. Ang applauds the huge effort made in recent years by the Chinese government to tackle this issue. This includes current efforts at amending its copyright law to make it more aligned with the international treaty by adding provisions concerning record producers’ right to obtain remuneration. The Chinese government is now on its third revision for copyright laws, slated to be introduced next year.

Besides copyright laws, he notes, a change in the way the Chinese music market is structured would help boost revenues. Now, he says, many ISPs in mainland China are paying what are effectively token royalty payments to media companies first, and then recovering the money from advertising sources, meaning that consumers are downloading or streaming music for free. This then becomes a gray area where copyright infringement is concerned - consumers are unlikely to know if they are downloading or streaming from legal sources.

Plus, the sheer size of the market means that taking enforcement action is far from simple.

“Instead of this, the market should move to one whereby the person who downloads and streams should be paying as he does so. It makes sense and makes things easier,” Mr. Ang says.

There are over 400 million internet subscribers in the PRC, he points out. Even if just 20% of subscribers pay five yuan (HK$6.3) a month for legal music streaming services like Spotify, the annual revenue would already total more than four billion yuan.

The IFPI, Mr. Ang adds, intends to delve deeper into the mainland Chinese market to ensure that its members can obtain reasonable returns on their investments.

Public support required as usual

All these mean that, contrary to public perception, today’s pop stars, especially in the Chinese market, do not lead cushy lives, Mr. Ang says.

“These days, perhaps the only true way they can sell albums is if they turn up physically at an autograph session so as to motivate their fans to show up and buy their music,” he tells Hong Kong Lawyer.

“Otherwise, once the music gets out, it is almost immediately available for free online. I do feel bad for some of these stars who have to travel around Asia extensively to plug their albums.”

To protect copyright, support from both the public and the government is crucial, he reiterates. Legislating laws and ensuring enforcement are governmental responsibilities but these only “provide the framework and pillars of the copyright infrastructure”, Mr. Ang explains.

“Consumers form the walls and the rest,” he concludes.

“To grow creativity, investment is required in the industry and companies and talent need to know they can profit from such creativity, that it is adequately protected, before investing both money and time into it.”

 

By Carmen Chu

 

Thomson Reuters – Sweet & Maxwell are the publishers of the Authorised Hong Kong Law Reports & Digest ("HKLRD") and the Authorised Hong Kong Court of Final Appeal Reports ("HKCFAR"), and providers of Westlaw HK (www.sweetandmaxwell.com.hk / www.westlaw.com.hk).