Legal online video on Russia’s front lines against piracy

While Internet video piracy remains a problem in Russia, a combination of laws and market changes is contributing to the growth of a legal business in online video streaming.

A law to curb piracy came into effect in August 2013. It has proven to be an “efficient instrument” in the fight against copyright infringement, especially since preliminary injunctions from courts became much easier to obtain, said Pavel Sadovsky, head of the intellectual property practice at the EPAM law firm in Moscow.

While the country's reputation as a home for media piracy is declining, however, the fall has not been significant so far.

“As of the beginning of February, there were only about 100 preliminary injunctions applied under the new law and about 50 claims were filed,” Sadovsky told The Moscow News. “I believe the figures will grow significantly in the nearest future, and this will certainly result [in a] notable decrease of film piracy.”

Supply and demand

The enduring popularity and wide availability of pirated material in Russia can be attributed to a market demand and a lack of supply of legal content.

“The situation [is] when on one hand, you have a demand, and on the other hand, you don't have a legal supply for these people,” said Egor Yakovlev, CEO of online video provider Tvigle. “They probably are even ready to pay, but they don't want to wait till it becomes available in a month or something, and go directly and find a different supply, which is... precisely in this situation piracy coming up and supplying them.”

A beneficiary of the anti-piracy law has been the growing legal online video business. Companies such as Tvigle offer Russian users Internet streams of films or television programs, either without commercials for a fee, or free with advertising.

Because the companies have contracts for online distribution with producers of television shows or films, unlike piracy, the available content is completely legal.

Founded in 2007, Tvigle had an audience of 10 million in November 2013, according to industry analysis website Comscore, and reported 160 million videos watched on its website and partnership network the following month. Ivi, established in 2010, reported on its website a monthly visitor figure of 16 million.

Internet penetration in Russia has reached 57 percent of the population, according to Sergei Libin, media and telecommunications analyst at Raiffeisenbank. Tvigle reported the country's total online video audience at 60 million in June 2013, 83 percent of Russian Internet users.

Harnessing technology

In addition to stronger laws, technology is also benefiting the legal business – the increasing popularity of smart TVs, for example, which come with built-in apps for legal video portals, and the rising use of mobile devices like smartphones and tablets.

Traditional piracy relies on the use of browsers to find content, which is harder to do on devices that operate more on the basis of dedicated apps.

“Definitely it's more complicated [to find pirated content] than on computers, because you have to be aware how to do it properly and so forth and so on,” Tvigle's Yakovlev told The Moscow News. “Physically it's possible. You could go on a browser and do the same [thing] you are doing on the Internet, but usually on these devices people are not frequently using browsers – they are going directly to applications.”

A further advantage is the timeframe for the development of legal content. Since a company like Tvigle can negotiate simultaneous availability of a program like “Hannibal” with the American production company – as it did for the season that just launched – it has the time to prepare distribution, the script and the dubbed dialogue that pirates do not.

“This year, we agreed with Sony that we [were] going almost simultaneously with the U.S. premiere, so the delay would be less than 24 hours,” Yakovlev said. “It's absolutely legally [done] on an advertising model, which means for free from Tvigle, in a good translation, and definitely even if piracy would try to compete, [pirates] would simply not have enough time to do it properly in 24 hours, to do voiceovers or dubbing. Even from a time point of view, it became faster than piracy.”

The problem of torrents

While the anti-piracy law has benefited the industry for the most part, problems remain, mainly through its difficulty in fighting shared content on torrents or social networks.

“It's not that easy to eliminate. Sometimes it's easier to deal with companies, so you can block websites, but it's more difficult when it comes to social networks and torrents, because it's people sharing the content,” Raiffeisenbank's Libin said. “It's a bit controversial legally, as far as I understand – you can't block the whole social network, for example.”

For some in the Internet user community, the problem of full-scale site blocks has been in mind even since the legislation was introduced.

“Even at the stage of discussion in the State Duma, we warned how the law was harmful both for society and for Internet commerce,” said Artyom Kozlyuk, a spokesman for the Pirate Party of Russia and head of the Internet activist organization RosKomSvoboda. “A lot of this has come true – unjustified blocks. When Internet resources are blocked by IP addresses, access is effectively limited to well-ordered resources.”

Kozlyuk indicated an occasion when a site featuring classic Soviet films, previously in the public domain, was blocked under the law.

A need for transparency

Apart from the lack of transparency that Kozlyuk said was evident in blocking websites, which contributes to a broader failure to foster popular political participation, the battle against piracy is based in reinforcement of outdated copyright laws.

“We propose fighting not with the results of the distribution of illegal content, but with the root problems in this area,” he told The Moscow News. “This is... the escalated crisis of authors' rights in our digital era, when agents and rights-holders don't want to use progressive technologies for ties between the author and the consumer, but only impose newer and newer limits.”

He encourages the development of legal video portals online, though with low prices to foster customer loyalty.

Ultimately, Kozlyuk finds that the participation of Internet users – even alleged piracy – could be used to support a new commercial model for online video entertainment.

“Not denying commerce, the tie between author and user should be on the level of spiritual contact,” he said. “If the media product demonstrates talent, then commercial success is guaranteed regardless of the level of piracy, which one can see in any case as promotion and advertisement of the author and his work.”

There is a fine line between user inspiration and copyright infringement, however, and as a new law enters discussion in the Duma to extend current protections on video and film to media such as publishing and music, users and the industries will have to find a balance.

“Especially [in] the new economy, which is more and more based on [intellectual property, or IP], if somebody is going to use your IP without your permission and get money without sharing this money with you, it could destroy the whole new economy model,” Yakovlev said. “From the the legal video portal side, we are definitely supporting all these legal moves which have been made by the government over the last couple of months.”