Press Backgrounder
Piracy, Pay-TV and AEPOC

• Piracy and Pay-TV
• Conditional Access
• Piracy Today
• The Internet
• Impact of Piracy
• AEPOC Activities
• AEPOC Membership
• AEPOC Management
• Press Contacts

AEPOC is the "Association Européenne pour la Protection des Œuvres et Services Cryptés" or the "European Association for the Protection of Encrypted Works and Services". AEPOC started its activities in 1995. Its current membership consists of 31 leading digital television and telecommunication companies including TV channels, conditional access providers, providers of transmission infrastructures and manufacturers of related hardware.

AEPOC's goal is to eliminate piracy of audiovisual services and to encourage the development of the appropriate legal, operational and technological frameworks to increase the security and safeguarding of conditional access systems for Pay-TV and digital services. (www.aepoc.org)

Piracy of audiovisual services

Piracy of audiovisual services consists of the illegal exploitation of audiovisual or multimedia works by those not entitled to do so, i.e. by those who are not the legitimate owners of the rights to the works. The two most common forms of piracy involving free television and Pay-TV are:

• Coded Pay-TV signals for digital transmission are stolen by private viewers.
• Local TV stations and cable networks illegally transmit content that does not belong to them.

In both cases, programming is illegally accessed by forging the smart-cards and digital decoders necessary to receive the signals.

AEPOC estimates that every year some 1 billion € is spent in the European Union for smart-cards and decoding equipment used to hack into Pay-TV.

Technological advances - including Internet-based technologies - have been developing so rapidly that piracy is severely impacting economical performance and innovation throughout the whole of the socially, culturally and economically important media industry. In addition employment levels and tax revenues suffer from piracy. Most noticeably, it also impacts those viewers who spend their money to watch the programmes legally.

Conditional Access (CA)

Conditional access (CA) is the technical solution that permits access to electronically transmitted content and services to be controlled and provided securely, including determining when access is to be granted.

The convergence of TV and the Internet only serves to enhance the importance of conditional access. Through the Internet operators can provide many more interactive and multimedia services which can also be managed by conditional access technology.

For these reasons it is critical that conditional access is made reliable for audiovisual transmission systems be it by digital TV or via the Internet: Reliable and respected CA systems are key to the development of pay-media such as Pay-TV and digital services throughout Europe.

Piracy Today

Piracy occurs in a number of different ways ranging from pyramid structures, sometimes linked to organised crime, to smaller local phenomena. Thousands are at work across Europe and beyond on the technical means for cracking encrypted conditional-access signals and reaping a profit on their illicit endeavours.

Commercially, piracy is organised along simple lines. It takes very little capital to build a profitable business. Sometimes, devices for unauthorised CA decoding are manufactured and offered simply to help sales of satellite dish (parabolic antennae) rather than for direct profits. The hacker's smart-card is handed out in this case as a purchasing incentive.

Certain retailers and installation companies have been known to advise subscribers not to renew their regular subscriptions, giving them hacker smart-cards at a reduced price instead. Besides infringing the intellectual property rights, these activities weaken above-board sales efforts and bring legitimate promotional and advertising efforts to naught. This is why AEPOC members are taking action against this practise and thousands of installers have been sanctioned.

Illegal smart-cards also circumvent decoders that have been loaned or rented to subscribers. Conditional-access systems come with special software interfaces to make decoders inoperable once they have not been returned at the end of the rental period. The device can be made operational again only if the decoder is used with an authorised smart-card. Illegal cards can totally circumvent this process. Often, stolen decoders and illegal cards are offered bundled together, adding theft of material goods to the violation of conditional access systems.

The Internet

The Internet is central in this context. It allows a faster increase in the multiplication of trade and exchange opportunities among hackers. Today, thousands of European web sites are pertaining to piracy of audiovisual services and offer software, access codes, tips and tricks and other relevant information to the hackers.

Sometimes codes to update existing cards are provided. Sometimes instead, ready-to-use cards are sold. And websites abound where seemingly "neutral" components can be purchased, i.e. programming devices without software or blank access cards. These can easily be programmed for unauthorised decoding of conditional access transmissions.

But there is also the importance of the Internet as a business platform for electronic pay services, such as video on demand and personalised information services, as well as its importance for corporate intra- and extranets. To fully develop its cultural and economic potential this emerging industry must be protected by efficient and to-the-point legislation as well as by an effective enforcement.

In light of these necessities, the General Assembly of AEPOC has decided in early 2003 to specifically add the protection of encrypted IP-based services to its areas of expertise and activities.

Impact of Piracy

Copyright-holders, broadcasters and distributors of reception equipment may be the initial victims. But they are far from being the only ones. Piracy of this magnitude has broad economic, cultural and fiscal impacts. Affected are:

• Copyright Holders Holders of copyright for content are impacted as are the providers of conditional access systems with regards to the copyright of the encoding software. Piracy of audiovisual services results in direct revenue losses for these companies.
• Trading Distributors and installers of receiving equipment lose income.
• Taxes Illegal players pay no taxes. When viewers who are now outside the law become legal, tax income also increases.
• Employment Pay-TV piracy impacts employment levels. Business lost by legitimate businesses to illegal operations leads to job redundancies or foregone creation of new jobs.
• Innovation Piracy stifles innovation by constricting the implementation of new services and by reducing the achievable return on investments in content, transmission systems and hardware: Decreasing investments in turn limit technical research, implementation of cultural creativity and economic opportunities of the media business as a whole.
• Legal Users An unfair financial burden is imposed upon legal viewers for they have to pay higher subscription fees.

AEPOC Activities

AEPOC combats pirating of encrypted works and services. AEPOC promotes information, communications and co-ordination amongst its members and between members and institutions at both the national and international levels. Such activities include:

• Ongoing monitoring of the piracy situation
• Detailed analysis of European legislation and international agreements covering the safeguarding of conditional access systems, the audiovisual and telecommunications markets in general and the degree to which European Directives are actually applied within member countries
• Identification of weaknesses in existing regulations
• Promoting new legislation to cope with changes in the market and the problems involved with safeguarding that market
• Working with public bodies and member companies to take legal action wherever appropriate and under whatever legal redress is available to them
• Organisation of seminars, conventions and other events to provide information that will raise public awareness
• Member companies carry out research to develop technical counter-measures

Given the importance of legislation in dealing with piracy and in view of the insufficient reach and applicability of existing legislation, AEPOC works inside the European Union for:

• Legal protection specifically governing the use of conditional-access devices for reasons that are not just for the protection of direct remuneration
• The punishment of the personal use and possession of illegal decoding devices
• Harmonisation of laws at the European level and the introduction of minimum thresholds for sanctions
• Creation of a specific working group at Europol to bring together technical, legal and investigative expertise

AEPOC Membership

AEPOC consists at present of 31 major players in digital television and telecommunications. AEPOC brings together and represents international players in four distinct sectors:

• Television channels (pay and non-pay TV stations and networks)
• Providers of conditional access technology
• Suppliers of transmission infrastructures
• Hardware manufacturers

AEPOC's current members are:

AEPOC Management

Press Contacts