Conference on International OTT Video Services: Policies and Development

Trans-editor: Yating Chan/  Proofreader: Yu-li Liu

Date: Oct. 23, 2015

Venue: Innovation Incubation Center, National Chengchi University

On October 23, the Taiwan Communications Society (TCS) and Yuan Ze University held the Conference on International OTT Video Services: Policies and Development at the Research and Innovation Incubation Center of National Chengchi University.  

TCS President Yu-li Liu said that in light of OTT’s rapid rise in recent years, which was followed by problems related to licenses and intellectual property rights, the Conference invited experts from Ofcom, the Motion Picture Association of America, and CJ HelloVision in South Korea to share their experiences with the OTT issues.  

Kuo-Hua Lai, Dean of the College of Informatics, said that over the past five years, the OTT trend has spread rapidly from North America to Europe and Asia, turning a new page for traditional business models and the whole industry chain, bringing new opportunities and challenges. He said that he hoped that through the Conference, local officials and experts would look more into OTT development for building a sound industry environment.

In the guest of honor speech, NCC Vice-Chairperson Dr. Hsiao-Cheng Yu pointed out that Taiwan has three approaches to forming a fair competition environment for local multi-system operators (MSO) in the face of strong international OTT competitors (e.g., Netflix). Loosening regulations on local MSOs, he said, can boost their competitiveness. The second move, he said, is to free subscribers from paying TV fees for a hundred or more channels that they probably aren’t watching by rolling out new policies. Lastly, he said, local content producers need to produce more quality content to win over customers from their international competitors.

Chung-Jen Chang, Director-General of the Bureau of Audiovisual and Music Industry Development, Ministry of Cultural Affairs, believed the Conference would give audience some insight into OTT development with its focuses on intellectual property rights, regulations of OTT content, and new business models for OTT content and TV programs. 

Keynote speaker Peter Bourton, Head of Television Content Policy at Ofcom, shared the U.K.’s regulations and policies on OTT. Bourton said that the country had included video on demand services in its Audiovisual Media Service Directive (AVMSD) in 2010 because of their growing influence on the public. However, different regulations are needed, he said, as an ad cap is set on traditional linear streaming services while ads in video-on-demand services are free over the top.

Keynote speaker Mr. Frank Rittman, Senior Vice President of the Motion Picture Association, shared his thoughts on copyright issues relating to OTT services. Rittman said that shutting down a cross-boundary website that displays copyright-infringing content via site blocking technology is the most effective tactic. More than 40 countries around the world have adopted such a tactic, including Malaysia and South Korea in Asia, he added.     

In a follow-up talk, NCC Commissioner Shin-yi Peng said that Taiwan’s site blocking technology can only cover local websites and that copyright protection awareness is still relatively weak in the industry.

Keynote speaker Chang Nam Ko, Manager of the Tving business team at CJ HelloVision in South Korea, discussed the company’s move toward OTT services. Ko said that CJ HelloVision launched Tving to provide TV OTT services, as a 2014 survey by the country’s National Statistical Office showed that users have spent more time and money on TV OTT than on mobile OTT or PC OTT. However, many free OTT platforms have challenged Tving’s success given the government’s wait-and-see attitude toward the relevant regulations (e.g., OTT business registry), as fewer users are willing to pay for OTT platforms.   

In the session on OTT Platforms Operation and Management, President of AmWind Media Taiwan Jack Chang pointed out that local tax bureaus’ levy of a 20% tax on foreign content for their intellectual property rights (IPRs) has driven foreign investors away, and local legislative authorities should consider sanctions and IPR license requirements.

Yao-de Huang, Chief Executive Officer of the OTT section at Formosa Plastics, said that OTT represents the spirit of decentralization, as it opens new media to long-trapped industries. Whatever devices are used, Huang added, the content is always at the core.

May Chen, General Secretary of the Satellite Television Broadcasting Association, said that the last piece of OTT development is not technology or bandwidth, but copyright. Unlike traditional MSOs, OTT service providers do not rely on ads to make a profit but on copyright loyalties to produce quality content.

Yi-fong Chang, Vice President of Chunghwa’s northern business group, said that although China’s market is huge, fierce competition there and the authorities’ relentless content reviews favor Taiwan and that local content providers need to self-produce quality exclusive content.

NCC Commissioner Yi-Ning Chen said that the NCC has talked with many operators over the past few months and would consider regulating the OTT services that have the least regulatory control. 

Yuntsai Chou, Professor in the Department of Information Management at Yuan Ze University, said that although weak regulations on OTT are expected, the authorities should consider applying platform regulations to OTT providers (e.g., fining OTT providers for illegal content) once they become linear TV operators.  

In the session on Content Authorization and Management, NCC Chief Secretary Jason Ho defined OTT as a content service that uses telecom infrastructure, appears on multi-platforms, and whose data transmission does not use other Internet service providers’ networks. The E.U.’s self- and co-regulation mechanism, Ho said, is not a way out for Taiwan’s OTT industry, as there is a lack of mutual trust among local operators. He further said that the NCC’s current Digital Convergence Draft Acts are intended to regulate OTT, with the range of regulation to be further discussed.   

Chi-liang Yeh, Assistant Professor at Yuan Ze University, said that OTT services are not currently regulated in Taiwan’s telecom communications regulations, but they are in competition with traditional content providers in the market. The authorities, he added, should keep an open attitude toward the OTT industry and continue to ensure freedom of speech while cracking down on illegal OTT (e.g., those that violate copyrights or intellectual property rights).

Jia-Jun Tsai, Chief Executive Officer of Coture, said that Taiwan’s content providers have to figure out a way to keep pace with their competitors in China. Although China has a capital advantage in content production, Tsai added, Taiwan is still ahead in terms of content creativity.      

Sally Chen, President of the ELTA Technology Corporation, said that OTT will take up a large part of users’ lives because of their behavioral changes and that the government should pave the way for local content providers to export their products across the strait and vice versa.

Shu-Fen Peng, President of the Cable Broadband Institute in Taiwan, said that cross-boundary services have had tremendous effects on Taiwan’s cultural and creative industries, resulting in wasted bandwidth, a decrease in royalties, and an increased risk of children’s porn exposure. Thus, the authorities should put IPRs at the core of its telecom policies, Peng added. 

TCS President Liu Yu-li concluded that as heated discussions on OTT regulations and network neutrality in Asian countries are still ongoing, Taiwan could also slow down its pace on OTT regulations at this phase to not stifle the industry’s growth.