(English) Online Piracy in Japan: How Big is the Problem—and what’s an Effective Solution? November.14.2017

Japanese people are rightly noted for their honesty. We have all heard the stories of wallets left on park benches being returned or just left for the owner to find. This theory was tested last year with the results shown on Youtube. Out of 15 “inadvertent” wallet drops in Tokyo, all 15 were picked up and returned to the owner.
That’s quite a record. This code of behaviour largely extended to DVD and CD piracy a few years ago when these formats were popular vehicles for piracy in many parts of the world. While it was possible to find pirated videos in Japanese cities, piracy rates in Japan were consistently low—by some estimates as low as 5%–whereas in many countries (China being an example) the piracy rates were north of 90%. I have heard Japan’s fabled honesty attributed to everything from the Samurai code to the shame based (loss of face) ethics of a Confucian society—although the latter certainly has not had any impact on piracy rates in China, where Confucian tenets are still supposed to influence behaviour.
Whatever the cultural reason, the odds of getting your wallet back in Japan are much better than in just about any other country in the world.

So does this honest society mean that there is no content piracy problem in Japan today? Unfortunately, no. In most countries today, piracy has largely migrated from physical formats like DVDs to the online environment, with downloading and streaming forming the largest element of piracy. Interestingly, Japan is no exception. A recent study by comScore revealed the surprising fact that of Japanese internet users who use desktops to access the internet, one in four access sites or applications used for online piracy. This occurred on average at least once a month in the first half of 2017. And that doesn’t measure mobile access, which most Japanese use.

Of the Japanese internet users accessing piracy sites, 26% visited P2P download sites and applications, 33% used host sites, and 41% used what in Japan are often called “link” sites, more accurately described as “infringement facilitation sites”. All this totals 15.2 million average unique users from Japan for sites or applications used for online piracy via desktops. A recent study by SimilarWeb documents that page views in Japan at copyright infringing sites are almost 2.5 times higher than views at legitimate sites. This study also shows that over the past two years the piracy situation in Japan has been getting worse, not better.

Why is online piracy thriving in Japan? Perhaps it is easier and less shameful to pirate online in the privacy of one’s home as opposed to buying knock-off DVDs on the street, or perhaps it’s just easier to do, or maybe Japan’s younger generation have absorbed the mantra that everything on the internet should be free. The answer is anyone’s guess but the fact remains–it is happening.

What are these Japanese visitors consuming on pirate sites? It is a range of content, including Hollywood and Japanese movies, music and certainly Japanese animation, manga and anime. Japan is a content super power in terms of the global reach of these genres and they are not only subject to piracy abroad (the Japanese Ministry of Economy, Trade and Industry-METI-estimates that 50% of manga and anime fans in the US are watching or reading pirated works), but also in Japan. The leakage of advertising revenue from legitimate Japanese content sites to offshore pirate sites not to mention the unpaid downloads by Japanese consumers undermine the business model of Japanese content producers, resulting in industry job loss and a reduction in new content creation. A recent study by Carnegie Mellon University estimated that, in the absence of piracy, film box office receipts would increase by 14-15%, offset by a reduction of only 1.5% due to the promotional impact of piracy. Applied to Japan, this would mean an annual increase in the Japanese box office of 30 billion yen, or about USD270 million.

But while online piracy is growing, Japanese consumer attitudes do not find such behaviour acceptable. A survey by the public research firm IPSOS shows that over 50% of Japanese consumers agree that unofficial “sharing” of movies and TV content causes financial harm to those creating and producing this content and only 4% disagree that such actions are unfair. Only 11% disagree that it is the responsibility of government to ensure that the internet is not used to share content without the rights owner’s consent and only 7% disagree with the statement that the government should take action against pirate websites. The question is, “what actions can and should the government in Japan take?”

While Japan is a major league player where production of content is concerned, it is in the minor leagues when it comes to measures for content protection. A recent study commissioned by the Agency for Cultural Affairs from the Mitsubishi Research Foundation showed that of the top seven measures taken by leading content producing countries to combat online piracy, Japan has implemented only one while most countries have implemented four or more, (with France leading at 7/7). The seven measures are domain name site blocking, domain name seizures, preventing specified search results, preventing advertising on infringing sites, blocking internet access of individual repeat infringers, establishing an industry warning system and imposing penalties for repeat infringers. Among the key tools missing from Japan’s anti-piracy toolbox is site blocking, better described as “disabling access to content infringing websites”.

As I have written elsewhere, site blocking is becoming an increasingly widely used tool in many jurisdictions to combat the problem of online copyright infringement. It has been or is in the process of being adopted in over 40 countries, and has proven to be particularly effective both in deterring online piracy and in converting consumers to be users of legitimate content, thus effectively modifying long-term behaviour. There is no reason to suppose that it would not be equally effective in Japan. What then, is the obstacle to implementing a site blocking regime for the benefit of the Japanese content industry, and for Japanese consumers?

Perhaps it is obvious why site blocking benefits domestic content producers, but it also brings important benefits to consumers. How? By protecting them from the malware which is all too prevalent on pirate websites, and by preventing consumer exposure to borderline, high risk advertising of non-mainstream products and services. While doing this, it also provides the benefits of broader and richer content created by domestic producers no longer undermined by rampant piracy. Site blocking is a huge plus for the consumer, whether it is appreciated as such or not.

While there are many voices in Japan calling for the implementation of site blocking, it has remained relatively controversial and difficult to implement, primarily owing to privacy concerns. In particular, the Ministry of Internal Affairs and Communications (MIC) has taken the position that only under extraordinary circumstances can a site be blocked. Regarding copyright infringing sites, it considers them ineligible for site blocking, arguing that doing so would violate Article 21(2) of the Japanese Constitution and Article 4 of the Telecommunications Business Act which relate to “secrecy of communications”. Japan was able to institute site blocking against child pornography but only through a voluntary code because of concerns regarding the above legislation. These concerns are the primary obstacle to implementing site blocking in Japan; they are very much the nub of the issue.

MIC’s position is far from receiving unanimous support in Japan. There are critics of the narrow interpretation of the law or who feel it is being misapplied, and those who suggest there are ways to deal with the issue of blocking pirate websites by finding a “workaround”, as was done in the case of child pornography. More work is being done to find ways to enable Japan to adopt site blocking and deal with its growing problem of online copyright infringement. This research was the subject of a seminar organized by the Motion Picture Association and UNIJAPAN, supported by the US Embassy and the Federation of Japanese Films Industry, held as part of the 30^th edition of the Tokyo International Film Festival at the end of October. I was fortunate enough to have participated.

The discussion and conclusions of that Tokyo seminar will be the subject of my next blog.

This blog was originally produced on Hugh Stephens Blog.

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