IMDA releases long-awaited proposed changes to the Films Act
Dec08

IMDA releases long-awaited proposed changes to the Films Act

  On 4 December 2017, the Info-communications Media Development Authority of Singapore (“IMDA”) released its long-awaited public consultation paper on the proposed changes to the Films Act (Cap. 107). Minister for Communications and Information, Yaacob Ibrahim, first indicated in January of this year that the government was looking to amend both the Films Act and Broadcasting Act to take into account changes in technology. One broad theme that emerges from the proposed amendments is the fact that the IMDA is focussing its regulatory efforts on the distribution and public exhibition of films. While changes are also proposed to include digital streaming technology under the regime, the emphasis on “public exhibition” indicates that IMDA is, for the purposes of the current consultation at least, taking a lighter-touch approach to regulating consumer-focussed over-the-top video streaming services. There are several proposed amendments, but this post sets out the four key proposals you should be aware of. Four key proposed changes Formalisation of co-classification scheme. Following successful trials in 2011 and 2015, IMDA now proposes to formalise its industry co-classification scheme. This scheme allows employees of industry players to register and be trained as film content assessors. These industry players will then be allowed to independently co-classify films up to the PG-13 rating through their film content assessors. Safeguards will be put in place to ensure the system is not abused, such as IMDA’s right to conduct sample audits of films that have been co-classified and penalties for misclassification. Introduction of video games class licence. Currently, video games are often submitted for classification by wholesale distributors. For video games classified as M18, point-of-sale requirements are attached to the classification certificate issued by IMDA (e.g. ensuring the games are not sold to under-aged consumers). The downstream retailers that sell the video games to consumers are often not made aware of these requirements, defeating their purpose. IMDA proposes introducing an automatic class licence scheme for retailers that sell video games on physical media (e.g. on DVDs) to make them directly responsible for complying with the point-of-sale requirements. The licence will be automatic with no registration required, and will not involve the payment of any licence fees. Clarification that the films licence is only intended to apply to the distribution and public exhibition of films. IMDA has clarified that its films licensing scheme is only targeted at the distribution and public exhibition of films and is proposing amendments to reflect this. Amendments will also be made to ensure that films publicly exhibited by means of streaming or other digital transmission are also included under this scheme. In determining what is a “public exhibition” requiring a licence,...

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New OTT regulations in Indonesia and Thailand: inching towards a level playing field?
May23

New OTT regulations in Indonesia and Thailand: inching towards a level playing field?

New regulations are on the way that will impact providers of “over-the-top” (OTT) services targeting Indonesia and Thailand. Rapid digitalisation of multiple sectors in Asia is marking the dawn of a new era for policy and regulatory frameworks. Due to the availability of wireless broadband and prolific smartphone usage, OTT services such as mobile VoIP mobile applications, mobile instant messaging, online video and TV, and online music services have experienced unprecedented growth. Traditional onshore broadcasters and telecommunications companies have suffered at the hands of the availability of domestic and foreign OTT services which have cannibalised advertising and viewing figures, often whilst increasing strain on bandwidth. A key challenge in this new era is how to regulate the growing number of onshore and offshore OTT services. Examples include online global video services like Netflix and digital TV channels in Thailand that are broadcasting their programmes on OTT platforms, such as Workpoint and channels 3, 7 and 8. Other OTT services include transportation services like Malaysia’s Grab and Indonesia’s GoJek; communication tools like Facebook, LinkedIn, WhatsApp, Snapchat and LINE; as well as e-commerce platforms like Indonesia’s Tokopedia. Historically, OTT services which reach users via telecommunication companies’ networks have not required a licence or been required to pay any licensing fee; and in the case of offshore OTT services, have not been subject to local taxation. Policy-makers in Indonesia and Thailand are the latest to try to tackle this issue. Both have recently announced plans to introduce regulations aimed at OTT services. In this post, we look at the proposed changes and what they might mean for OTT services in these countries. What has changed in Indonesia? Offshore OTT services targeting Indonesia could find themselves subject to the payment of domestic corporate income tax in the country. The Director General of Tax issued Circular Letter 4/2017, which builds on the guidance set by Circular Letter No. 3/2016. The 2016 Circular states that applications and/or content services delivered over the internet can be provided by a foreign individual or business entity if they have a “permanent establishment” (known in Indonesia as a Badan Usaha Tetap or “BUT”). The primary aim of Circular Letter 4/2017 is to establish criteria to ensure that the owners and operators of foreign OTT services (which make their services available in and generate revenues from Indonesia) will be subject to the payment of domestic corporate income tax set out under Article 17 of Income-Tax Law 2000, equal to a 25% rate of taxable income plus 20% branch profit tax, the latter being a levy payable only by foreign entities. Why is the shift happening in Indonesia? The key driver...

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Guest Column: Regulating video in the internet age: Pressing challenges, slow movement
Jan09

Guest Column: Regulating video in the internet age: Pressing challenges, slow movement

Video markets in Asia, as in other parts of the world, are being swept by a wave of commercial and technological adjustment to the rise of internet-delivered video, frequently referred to as “OTT” television.  Unfortunately, in most countries adjustment of regulatory policies by governments is way behind. Asia’s cities, in particular, are rapidly being wired for broadband connectivity.  In developing countries like Thailand, the Philippines, Indonesia and India a broad digital divide has opened, with major urban areas enjoying improving connectivity and the countryside still reliant on more traditional modes of video delivery to consumers. That divide is a problem needing attention, but in the meantime urban populations, at least, are enjoying a “sweet spot” of improving broadband and adequate disposable income to pay for services consumers want.  As a result, they have become the object of a “race to serve” on the part of video providers on every scale: • Traditional pay-TV operators are upgrading their VOD offerings and broadening device access to include smartphones and tablets. • At the same time, new entrants are seeking to construct the right content offerings at the right price to win over consumers.  Major global providers (Netflix and Amazon Prime) entered Asia during 2016, and immediately were confronted with the need to adapt a global approach to Asian realities (including lower price points). • A raft of regional Asian OTT platforms have expanded their offerings (including Viu TV, Hooq, IFlix, and Catchplay), alongside a plethora of locally-oriented offerings (like Hotstar, Dittotv and Voot in India, plus Toggle, Monomaxx, Doonee, USeeTV, MyK+, etc., in Southeast Asia.) These market developments have significantly ratcheted up the pressure on governments, who are seeing more and more consumers migrate to lightly-regulated (or totally unregulated) online content supply, and away from the heavily-regulated traditional TV sectors.   Governments are in a quandary – most do not wish to impede their citizens’ access to global information sources, but at the same time they see evident challenges to long-established policies for content acceptability, broadcaster licensing, taxation, advertising etc.   At the extreme, “pirate” OTT services happily locate offshore, respect no rules and meet no obligations of any kind (not limited to copyright authorization), all the while reaping millions in subscription and/or advertising revenues.  Local content industries are crying foul. This very unbalanced competitive landscape causes deep damage to network operators, content creators at home and abroad, and investors in local economies.  In general, it isn’t possible to subject online content supply to outdated “legacy” broadcasting rules, so alternative solutions have to be considered, including self-regulatory approaches (which can gain acceptance from legitimate OTT suppliers, if not the pirate scofflaws)...

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Singapore Copyright Changes – Five Key Takeaways for the Media and Technology Sectors
Aug29

Singapore Copyright Changes – Five Key Takeaways for the Media and Technology Sectors

On 23 August 2016, Singapore’s Ministry of Law and IPOS announced a public consultation on proposed changes to the Copyright Act. The proposed changes would represent the first major overhaul of copyright law in Singapore for a decade. In this post, we comment on what the changes could mean for the media and technology sectors. Five Key Takeaways VPNs are in the spotlight again We’ll start with the issue that has consumed the most media attention – the legality of Virtual Private Networks (VPNs). The volume of coverage is surprising given that VPNs are not even mentioned in the consultation paper. Nonetheless, there has been speculation in some quarters about the possibility of VPN services being banned altogether in Singapore. This is of course a misreading of what is a highly-nuanced issue. No one is seriously proposing that VPN technologies be subject to a blanket ban in Singapore. There is widespread acceptance that VPNs can and are used for legitimate purposes. Instead, the concern in the media industry is about the deliberate promotion, sale and use of VPNs as a tool to bypass geographical content restrictions. The most common example is companies who promote VPN services as a way to watch, for example, US Netflix or UK Amazon Prime Video, even though those services are not licensed for use in Singapore. From a media industry perspective, there are two major issues with the promotion, sale and use of VPNs to bypass geographical restrictions. The first is a copyright issue. The international TV, film and music industries are built upon a system of territorial licensing. Rights are usually licensed by country. The reason for this is simple – it generates revenues which, in turn, incentivises creative industries to invest more in new content. Any law that limits the ability for media companies to grant or exercise rights by territory arguably puts a major dent in the industry’s business model and that could lead to lower investment in content and, ultimately, a more limited range of lower-quality content for consumers. The second issue of concern for the media industry is content regulation. Singapore, like many countries, has a range of content regulations to protect community standards. Content delivered via VPN might comply with the content regulations in the territory at which it is targeted but it might not comply in Singapore. Not only do VPNs bypass copyright restrictions, they can also bypass content regulation, which arguably risks creating a playing field that is tilted against local, licensed operators who play by the local rules. As the consultation rightly points out, “A good copyright regime balances between providing exclusive rights as an...

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Leveraging the Schooling Effect: Opportunities and Challenges in Asian Sponsorship Deals
Aug23

Leveraging the Schooling Effect: Opportunities and Challenges in Asian Sponsorship Deals

CELEBRITY endorsements are a multi-million dollar business and especially prominent in the world of sports. Companies such as Nike, Under Armour, Puma and Omega spend millions of dollars securing prized endorsements from famous athletes such as Michael Phelps, Usain Bolt and Serena Williams. Here in Singapore, we are already witnessing the “Schooling Effect“, with various brands seeking to leverage the star power of Singapore’s first ever Olympic gold medallist. While celebrity endorsements can be a great way to build awareness of and position the brands, there are some important legal and commercial considerations for brands to bear in mind. Here are our eight key takeaways for brands. Have a contract in place This is to avoid false celebrity endorsement, where it appears that there is an endorsement by a celebrity for a brand when there is in fact none. The celebrities have a right to take legal action against a brand if the brand comes across as misrepresenting its association with the individual. They may be allowed to do so to protect them against damage arising from a false claim or suggestion of endorsement of a third party’s goods or business. In some cases, celebrities have registered intellectual property rights such as trademarks and these could also be infringed where there is no contract in place. In short, tread carefully when leveraging star power. Be clear as to what the celebrity must do For example, how many shoots must the celebrity show up for? Are they doing sponsored tweets? If so, how many and when? Do they have to seek approval before posting comments on social media? Clearly defining the celebrity’s responsibility goes a long way in avoiding future disagreements. Protect yourself from brand damage By connecting your brand with a celebrity, you obviously hope to generate substantial goodwill. By the same token, however, if there is an incident involving the celebrity with adverse media coverage, then that could actually damage your brand or adversely affect the reputation of your business. This is usually addressed through contractual protections, including commitments from the celebrity and termination rights. Define and scope out exclusivity This will ensure that the value of the investment on the celebrity endorsement will not be eroded because of an association between the celebrity and a competitive product. As a rule of thumb, the endorsement deals should set out the period and scope of exclusivity. You might want to prohibit the celebrity from undertaking incompatible or potentially offensive, inappropriate or controversial marketing programmes. Consider whether the celebrity should seek approval before entering into any other endorsement. It is also important not to agree to contracts that conflict with...

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China blocks iTunes and iBooks
Apr29

China blocks iTunes and iBooks

Apple is facing new challenges in China. Its iTunes Movies and iBooks Store were blocked earlier this month in what was a surprise move, given that it had only been six months since these services were made available to consumers in China. So why the apparent change in China’s attitude to Apple’s online services, and what does it mean for foreign companies in the content industry? What we can say is that this appears to be part of a broader move by the Chinese authorities to control the content accessed by Chinese consumers – and particularly foreign content. China’s new online publishing regulations, which came into effect in March 2016, have caused widespread concern among foreign companies because, in addition to greater conditions for foreign involvement in online content distribution and joint ventures, they appeared to require all online content to be stored in servers located in China. Under the new regulations, internet content publishers are also required to ensure that their content “promotes core socialist values”. China’s internet regulations are known to provide substantial room for regulator interpretation and the bigger question has always been enforcement. With this move, it looks like the authorities are laying down a marker to indicate that they will be ramping up enforcement against foreign companies. The stakes, of course, are high. China is Apple’s second largest market after the US and Apple has, until now, largely managed to escape the Chinese regulatory scrutiny that has hindered its international competitors in China. So what does this mean for international companies in the content distribution industry? It means that they need to think even more carefully about their broader China strategy and the structure of their local partnership arrangements. As part of this, those foreign companies should be looking to their local partners for guidance on navigating what is becoming an increasingly complex and unpredictable regulatory framework. But above all, it confirms that even the largest and most influential of international companies will not escape China’s growing focus on internet regulation. Indeed, it was almost certainly because of Apple’s size and influence that it was...

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