Vietnam's Phimmoi video-streaming site had over 100 million visitors per month before authorities took action. Image: Facebook

Vietnamese public security last week prosecuted Nguyen Tuan Tu, owner and operator of Phimmoi, the country’s largest pirate movie streaming site. The conviction marks perhaps the first time that Vietnam invoked Article 225 of the penal code, which criminalizes infringing upon “copyrights and relevant rights.”

Launched in 2012, this illegal free-to-watch movie depository soon became one of the most popular websites in Vietnam, ranking in the country’s top ten most popular websites with over 100 million monthly visits at its peak. The site was so well-known that it even has its own entry on Wikipedia.

For years, Phimmoi was given free rein despite repeated calls from film studios and distributors both domestically and abroad to shut it down. Some have even gone so far as to suggest the pirate site was “backed” by someone at the top level of the government.

Their suspicion was reinforced when a gambling ring run by Vietnamese top police officials, including the deputy head of Vietnam’s intelligence agency, came to light in 2018. Indeed, it would be hard to ignore the connection with this pirate streaming site, whose revenues came mostly from advertisements for online gambling, which is illegal in Vietnam.

Yet things went downhill for Phimmoi last year when the three largest internet service providers (ISPs) in Vietnam, which are all state-owned, coordinated to blacklist the site. This led to a sensational cat-and-mouse game between the ISPs and Tu, who bought dozens of similar-sounding web domains to elude the ban.

Like the Hydra of Greek mythology, every time the ISPs blocked its website, Phimmoi was “reincarnated” soon after with a new web address that included one or more “z” letters added after its original name. Up until Tu’s prosecution last week, the site had spawned a long list of aliases like “phimmoiz.net,” “phimmoizz.net,” and, most recently, “phimmoizzzzz.net.”

Vietnamese netizens are now questioning why it took nearly a decade for the government to take action against the illegal streaming site and, more importantly, why now.

Speculation is rife why it took authorities so long to act against Phimmoi. Image: Facebook

One possibility is that as the state-owned Vietnam Television (VTV) seeks to enter the country’s lucrative over-the-top (OTT) movies and TV services market, the government no longer viewed Phimmoi as an irrelevant minor offender but rather a formidable competitor—an existential threat even—to its economic interests.

For instance, it generally took pirate sites one or two weeks to obtain the Full HD copy of a newly-released movie, and just days for an “SD” version recorded by cinema-watchers using hidden cameras.

In contrast, all legal OTT platforms in Vietnam could only screen a movie three months after its theatrical release. Even if Phimmoi was to charge viewers money, traditional OTT sites simply could not compete with its extensive and always up-to-date movie portfolio.

The damages caused by Phimmoi, however, are not restricted to the OTT market. As Vietnam looks to flex its soft power through more arts and culture exports, the government launched the Vietnam Entertainment Fund in 2017 to subsidize movie production.

But few, if any, of those Vietnamese-produced movies have traveled well, with nearly all turning in abysmal box-office performances. Some have pointed the finger at Phimmoi as a culprit. During the pandemic, when most films are released online as cinemas are closed, it’s been even easier for video piracy sites to cash in on new releases.

While prosecuting Phimmoi owner Tu might end the year-long cat-and-mouse game between the site owner and authorities, the ultimate deterrent effect is unclear.

For Tu, the earnings from selling advertisements on Phimmoi—estimated at around US$10 million per month—far exceeded the maximum fine under Article 225 of the penal code, which is just about 3 billion Vietnamese dong ($131,000). Even the maximum sentence he would face if convicted is just three years of non-custodial probation.

As Vietnam stands to gain from cracking down on piracy, a more robust framework for intellectual property (IP) protection is needed—not just in the film industry but also in other areas such as life science patents and design rights, where Vietnam is notorious for lacking enforcement mechanisms, according to the US Chamber of Commerce (USCC).

Lax intellectual property protection is an issue in Vietnam just as it is in China. Photo: Facebook

Despite recent IP laws, such as the penal code reform in 2017 that introduced the aforementioned Article 225, Vietnam still ranked at the bottom of this year’s USCC International IP Index on copyright protection.

As the country now faces a recent dip in FDI inflows due to the Covid-19 pandemic, the government is scrambling again to attract new investment from overseas. Better IP protection would enhance Hanoi’s sales pitch, particularly to digital economy-related companies and investors.

Left unchecked, Phimmoi—and future sites looking to fill the vacuum left by it—might become a liability as the country appeals to more IP-sensitive foreign investors, even when Vietnam looks to attract industries unrelated to filmmaking.

It should be noted that the US-China trade war, which Vietnam has hugely benefitted from as multinational firms moved production out of China, was partly started because of China’s alleged intellectual property theft.

Le Dong Hai Nguyen is a Vietnamese economist and journalist specializing in East Asia’s geopolitics and development economics. Nguyen is a director of the Global Association of Economics Education, a fellow of the Royal Society of Arts and student of international economics at Georgetown University’s School of Foreign Service.