Polls
HISTORY OF THE VIDEOGRAM REGULATORY BOARD (VRB) AND THE OPTICAL MEDIA BOARD (OMB)
A. Beginnings of Piracy
Piracy of films and music in one form or another had existed since the technology for reproduction became easier and cheaper.
In the 1970‘s, when the cassette became a popular musical format, it opened up a whole new market for portable music. Soon, tape recorders became cheap and easily accessible to the public, and while that increased the demand for products, it also brought with it the problem of pirated music cassettes.
In the mid-80’s, the Betamax became the first audiovisual playback device that allowed the public to record a show, and to make multiple copies of one show on a minimum of two videocassette recorders.
This soon brought about a trend in the Philippines. During Martial Law however, access to foreign materials was limited on the government-controlled media. There was a delay of several months before a movie could be seen in local theaters.
The phenomenon of video rental shops was born. Video rental shop owners would record programs from satellite feeds, make copies, and rent them out to the middle and upper classes. The facility of Filipinos in understanding the English language, coupled with colonial mentality, helped make the first video rental shops a haven for the entertainment-hungry public.
In the 1970‘s, when the cassette became a popular musical format, it opened up a whole new market for portable music. Soon, tape recorders became cheap and easily accessible to the public, and while that increased the demand for products, it also brought with it the problem of pirated music cassettes.
In the mid-80’s, the Betamax became the first audiovisual playback device that allowed the public to record a show, and to make multiple copies of one show on a minimum of two videocassette recorders.
This soon brought about a trend in the Philippines. During Martial Law however, access to foreign materials was limited on the government-controlled media. There was a delay of several months before a movie could be seen in local theaters.
The phenomenon of video rental shops was born. Video rental shop owners would record programs from satellite feeds, make copies, and rent them out to the middle and upper classes. The facility of Filipinos in understanding the English language, coupled with colonial mentality, helped make the first video rental shops a haven for the entertainment-hungry public.
In the beginning, video rental shops were not so harmful to the economy. But Betamax players soon became obsolete in other parts of the world, and were replaced by the video home system (VHS) tapes and laser
discs. Nonetheless, they did not become obsolete in the Philippines. On the contrary, because of the obsolescence of the Betamax in other parts of the world, the price of Betamax players in the Philippines suddenly dropped and became very affordable. Its popularity therefore dramatically increased.
The movie industry started to feel the effects of film piracy as more and more families bought cheap beta machines and stayed home to watch movies before they were made available in the market.
The movie industry started to decline. At the same time, there was much public clamor about the lack of regulation of video shops and products and the disregard for censorship and copyright laws. In addition, Government was not collecting any taxes.
B. Presidential Decree No. 1987 On October 5, 1985, President Ferdinand Marcos created the Videogram Regulatory Board by virtue of Presidential Decree No. 1987. The law was created mainly to address two problems: (1) the regulation of the content of videograms; and (2) the imposition of taxes on the video industry.
Because of the passage of PD 1987, video distributors, who, except for a few, were still reproducing programs through satellite feeds, were forced to enter into license agreements with film companies abroad. The “legitimate” video sector was now born.
PD 1987 was a strong law, but it only regulated videos. The music sector, which had also started to be heavily affected by piracy, was not protected. The music sector later entered into an agreement with the VRB, authorizing the latter to seize infringing goods on behalf of its members. This allowed the music industry to ride piggyback on the raids conducted by the VRB.
C. The Introduction of Optical Discs
The Philippines started its fascination for optical discs around the year 1996, when portable compact disc (CD) players became popular and demand for CDs increased. By the next year, the VRB licensed its first CD replicating plant.
Around the same year, the video compact disc (VCD) had started to become a popular format with the proliferation of VCD players and CD-ROM drives. By 1998, the VCD market was flourishing and had overtaken the sales of VHS tapes.
But with the proliferation of VCD players, VCD piracy started to be rampant as well. The technology was easy and the quality was tolerable.
By the year 2000, pirate copies of VCDs started to seriously compete with legitimate products for the market share.
In the meantime, music pirates, who had started out selling hard-to-find compilations of old songs had started to copy and compile sound recordings of international and local artists.
Soon, cheap, generic, unbranded VCD players from China, costing about US $ 40.00 retail, flooded the market. You could even specify which brand you wanted and the vendors would gladly glue on your favorite brand’s trademarks.
The accessibility of hardware, as with the Betamax, again became the catalyst for an almost instantaneous shift from magnetic media – i.e., cassette and VHS – to optical discs in CD and VCD formats. Since VCD players could play both VCD and CD, the demand for both formats suddenly increased.
Despite the demand, related industries however, could not be flexible with the pricing of CDs and VCDs, citing numerous reasons, such as the higher production cost per disc of legitimate discs, protective pricing of products between territories, and product integrity.
In the meantime, the local film production had dwindled drastically – from about 240 films per year in 1996 to 120 films by the year 2000, and continuing down to 53 films in 2004.
Local music production was also severely affected. In 1996, a hit album could sell 10x platinum, 1 platinum being equivalent to 40,000 copies. By 2001, a double platinum was considered a big hit. In 2002, the bench mark for a platinum album was reduced to 30,000 copies by the music industry.
In 2001, the local film and music sectors started to lower the prices of VCDs and CDs, partly in answer to public clamor for more affordable prices. This initially caused a stir in both the film and music industries between international and local companies. International companies could not and did not want to lower their prices and wanted the local companies to keep prices in the “luxury goods” range.
The lowering of prices of local products helped ease public pressure for legitimate products to be more “competitive” in pricing with pirate goods. The wisdom of such a measure is, however, still a subject of strong debate within the industries concerned, because while public perception has been positive, the local film and music industries have had to take a huge cut from their profit margins in the hope of making up for it in terms of volume.
D. The Transition from VRB to OMB
Piracy continued to thrive, largely because of advances in technology, particularly the proliferation of CD writers, which made commercial production of pirated products cheaper and more easily accessible to businessmen with smaller capital.
Thus, cinema audiences continued to dwindle, cinemas and legitimate video and music outlets were closing down, and the private sector was desperate for solutions.
On the other hand, there were, through the years, complaints that the Videogram Regulatory Board overregulated and placed undue burdens on the legitimate video sector but did nothing to ease piracy. The previous leaders of the VRB placed a lot of emphasis on the revenue it collected from the legitimate sector, but not on the fact of lack of funding for anti-piracy enforcement.
By August of the same year, the entertainment industry met for the first time to discuss amendments to the VRB law. Several meetings were held with members of Congress and Senate, which culminated in a meeting at the residence of the Speaker of the House of Representatives, where the entertainment industry asked for appropriate legislation on the matter. Subsequently, the entertainment sector rallied behind a law which had been pending at the time, the Entertainment Media Regulatory and Anti-Piracy Bill, sponsored by Rep. Imee Marcos.
The Entertainment Media Regulatory and Anti-Piracy Bill sought to introduce reform to the VRB law, and include all forms of entertainment media -- namely, films, music, and games.
The private sector also sought to address the complaint of over-regulation of legitimate business through the imposition of hologram stickers, which cost the video industry PhP 45 million a year, but for which they did not get back any services. The private sector also lamented the over taxation of the film industry, which was subject, in addition to the holograms, to 33% amusement tax on gross theater revenues, 32% income tax on corporate income, an excise tax on film negatives, and the 10% Value Added Tax.
In the meantime, piracy of music and software products also proliferated, since optical discs accommodated any content which could be reduced to a digital file.
E. The Optical Media Act of 2003
In February of 2002, the Entertainment Media Regulatory and Anti-Piracy Bill was superseded by the Optical Media Bill, which used the same template utilized in other parts of the world where optical media legislation had passed or was pending.
The Optical Media Bill introduced for the first time the idea of regulating the production of all optical discs, regardless of their content.
Finally, just two years later, on February 10, 2004, the Optical Media Act of 2003 was signed into law by President Gloria Macapagal-Arroyo. TV and film actor Edu Manzano was appointed Chairman thereof soon thereafter. Chairman Manzano was the last VRB Head and the first OMB Chair.
The Implementing Rules and Regulations of R.A. 9239 was approved by the Joint Congressional Oversight Committee on February 1, 2005.
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The movie industry started to feel the effects of film piracy as more and more families bought cheap beta machines and stayed home to watch movies before they were made available in the market.
The movie industry started to decline. At the same time, there was much public clamor about the lack of regulation of video shops and products and the disregard for censorship and copyright laws. In addition, Government was not collecting any taxes.
B. Presidential Decree No. 1987 On October 5, 1985, President Ferdinand Marcos created the Videogram Regulatory Board by virtue of Presidential Decree No. 1987. The law was created mainly to address two problems: (1) the regulation of the content of videograms; and (2) the imposition of taxes on the video industry.
Because of the passage of PD 1987, video distributors, who, except for a few, were still reproducing programs through satellite feeds, were forced to enter into license agreements with film companies abroad. The “legitimate” video sector was now born.
PD 1987 was a strong law, but it only regulated videos. The music sector, which had also started to be heavily affected by piracy, was not protected. The music sector later entered into an agreement with the VRB, authorizing the latter to seize infringing goods on behalf of its members. This allowed the music industry to ride piggyback on the raids conducted by the VRB.
C. The Introduction of Optical Discs
The Philippines started its fascination for optical discs around the year 1996, when portable compact disc (CD) players became popular and demand for CDs increased. By the next year, the VRB licensed its first CD replicating plant.
Around the same year, the video compact disc (VCD) had started to become a popular format with the proliferation of VCD players and CD-ROM drives. By 1998, the VCD market was flourishing and had overtaken the sales of VHS tapes.
But with the proliferation of VCD players, VCD piracy started to be rampant as well. The technology was easy and the quality was tolerable.
By the year 2000, pirate copies of VCDs started to seriously compete with legitimate products for the market share.
In the meantime, music pirates, who had started out selling hard-to-find compilations of old songs had started to copy and compile sound recordings of international and local artists.
Soon, cheap, generic, unbranded VCD players from China, costing about US $ 40.00 retail, flooded the market. You could even specify which brand you wanted and the vendors would gladly glue on your favorite brand’s trademarks.
The accessibility of hardware, as with the Betamax, again became the catalyst for an almost instantaneous shift from magnetic media – i.e., cassette and VHS – to optical discs in CD and VCD formats. Since VCD players could play both VCD and CD, the demand for both formats suddenly increased.
Despite the demand, related industries however, could not be flexible with the pricing of CDs and VCDs, citing numerous reasons, such as the higher production cost per disc of legitimate discs, protective pricing of products between territories, and product integrity.
In the meantime, the local film production had dwindled drastically – from about 240 films per year in 1996 to 120 films by the year 2000, and continuing down to 53 films in 2004.
Local music production was also severely affected. In 1996, a hit album could sell 10x platinum, 1 platinum being equivalent to 40,000 copies. By 2001, a double platinum was considered a big hit. In 2002, the bench mark for a platinum album was reduced to 30,000 copies by the music industry.
In 2001, the local film and music sectors started to lower the prices of VCDs and CDs, partly in answer to public clamor for more affordable prices. This initially caused a stir in both the film and music industries between international and local companies. International companies could not and did not want to lower their prices and wanted the local companies to keep prices in the “luxury goods” range.
The lowering of prices of local products helped ease public pressure for legitimate products to be more “competitive” in pricing with pirate goods. The wisdom of such a measure is, however, still a subject of strong debate within the industries concerned, because while public perception has been positive, the local film and music industries have had to take a huge cut from their profit margins in the hope of making up for it in terms of volume.
D. The Transition from VRB to OMB
Piracy continued to thrive, largely because of advances in technology, particularly the proliferation of CD writers, which made commercial production of pirated products cheaper and more easily accessible to businessmen with smaller capital.
Thus, cinema audiences continued to dwindle, cinemas and legitimate video and music outlets were closing down, and the private sector was desperate for solutions.
On the other hand, there were, through the years, complaints that the Videogram Regulatory Board overregulated and placed undue burdens on the legitimate video sector but did nothing to ease piracy. The previous leaders of the VRB placed a lot of emphasis on the revenue it collected from the legitimate sector, but not on the fact of lack of funding for anti-piracy enforcement.
By August of the same year, the entertainment industry met for the first time to discuss amendments to the VRB law. Several meetings were held with members of Congress and Senate, which culminated in a meeting at the residence of the Speaker of the House of Representatives, where the entertainment industry asked for appropriate legislation on the matter. Subsequently, the entertainment sector rallied behind a law which had been pending at the time, the Entertainment Media Regulatory and Anti-Piracy Bill, sponsored by Rep. Imee Marcos.
The Entertainment Media Regulatory and Anti-Piracy Bill sought to introduce reform to the VRB law, and include all forms of entertainment media -- namely, films, music, and games.
The private sector also sought to address the complaint of over-regulation of legitimate business through the imposition of hologram stickers, which cost the video industry PhP 45 million a year, but for which they did not get back any services. The private sector also lamented the over taxation of the film industry, which was subject, in addition to the holograms, to 33% amusement tax on gross theater revenues, 32% income tax on corporate income, an excise tax on film negatives, and the 10% Value Added Tax.
In the meantime, piracy of music and software products also proliferated, since optical discs accommodated any content which could be reduced to a digital file.
E. The Optical Media Act of 2003
In February of 2002, the Entertainment Media Regulatory and Anti-Piracy Bill was superseded by the Optical Media Bill, which used the same template utilized in other parts of the world where optical media legislation had passed or was pending.
The Optical Media Bill introduced for the first time the idea of regulating the production of all optical discs, regardless of their content.
Finally, just two years later, on February 10, 2004, the Optical Media Act of 2003 was signed into law by President Gloria Macapagal-Arroyo. TV and film actor Edu Manzano was appointed Chairman thereof soon thereafter. Chairman Manzano was the last VRB Head and the first OMB Chair.
The Implementing Rules and Regulations of R.A. 9239 was approved by the Joint Congressional Oversight Committee on February 1, 2005.
back to top