Asia's pay-TV operators will miss out on over a billion dollars in potential revenues this year due to piracy, according to a new report.

The study – co-sponsored by the Cable and Satellite Broadcasting Association of Asia and investment bank CSLA Asia Pacific Markets – estimates that the industry will lose almost $1.3 billion (€1.1bn; £0.8bn) in 2003, with the cost of piracy expected to rise by over 10% a year.

Of the $1.3bn total, $426 million would have gone to programme makers and channels, while cable and satellite operators miss out on the remaining $874m. Actual pay-TV revenues across the region are estimated at $13bn.

The report calculated piracy costs by estimating the number of unauthorised viewers in each country and multiplying by the average revenue per legitimate subscriber. However, CASBAA's chief executive Simon Twiston Davies admits that not all the potential sales would be realised if piracy were eradicated, as many viewers would refuse to pay for the full-price service.

Nevertheless, Twiston Davies insists that piracy is costly enough to hinder the roll-out of digital television and limit spend on local programming.

"Piracy is undermining growth and almost singularly explains why new capital that should have been allocated to improving services has not been invested," he declared.

The study found that India – where there are over 22,000 local cable operators – is by far the worst country for piracy, accounting for 90% of Asia's unauthorised viewers and almost three-quarters of the lost potential revenue. Also suffering a major piracy problem is Thailand, where the government has so far done little to stamp out the problem.

Data sourced from: Financial Times; additional content by WARC staff