The billion-ringgit leak: Why Malaysia’s piracy 'addiction' is a failure of economics, not morals

THE numbers are staggering, but they are no longer a surprise. As of late 2024, digital piracy continues to drain an estimated RM3 billion annually from Malaysia’s entertainment and media industry. Despite the government blocking over 3,682 illegal websites since 2021, the "shadow market" remains the dominant force in our digital landscape.

But if we continue to view this as a simple "cops and robbers" story, we are missing the main point. The persistence of piracy in Malaysia is not a sign of a lawless public but it is a sign of a broken media economy.

To truly understand why Malaysians still flock to Telegram channels or other social media for their drama fix, we must look past the "theft" and examine the structural forces at play.

The pricing paradox: Fragmented and over-monetised

The modern Malaysian consumer is suffering from subscription fatigue. We were promised that streaming would be cheaper and provide entertainment. Instead, the market has fragmented into dozens of walled gardens. To have a complete library of entertainment today, a household might need to have Netflix, Disney+ Hotstar, Astro’s Sooka, iQIYI, Viu and more at one time to really have the fuller access for contents—easily totaling over RM200 a month by average excluding the internet billings.

From a political economy perspective, this is the commodification of culture taken to its extreme. When content is sliced so thinly across so many streaming platforms, the legal market effectively prices out the middle (M40) and lower-income segments (B40). In this environment, piracy is not just a cheaper option but it is the only "all-in-one" platform that exists that needs no big commitments. Piracy is an economic safety valve for a public that has been over-monetised due to subscription fatigue.

The myth of the borderless web

We often hear that the internet has no limits allowing us to watch anything, anywhere at any time. But the reality for Malaysians is a web defined by digital borders. Licensing delays, censorship hurdles by the Film Censorship Board (LPF) and regional "geo-blocking" mean that local audiences often have to wait days—or even weeks— for content that has already been trending globally.

This is a classic failure of spatialisation. Take the phenomenon of K-dramas, where it takes a massive portion of Malaysia’s OTT traffic. While legitimate platforms are bogged down by local regulations and corporate bureaucracy, they often face a "time-lag" of a day or two for subtitling or regional licensing, the "shadow market" moves at the speed of light.

Within minutes of a series airing in Seoul, TikTok will already be flooded with content clippings. Hence, explain how piracy networks operate as decentralised, borderless entities, offering the raw, immediate experience that the modern viewer demands: fast, easy-access and virtually free, even though they actually have to pay for the internet.

By the time a legal platform secures the rights to a trending series, the "pirated" version has already been shared a million times across Telegram, TikTok and Facebook. You cannot defeat a borderless competitor with a bordered strategy, especially not with the speed and the spreading power of the internet these days.

Beyond the block: A new digital deal

The Domestic Trade and Cost of Living Ministry and their CyCORE programme deserve credit for their enforcement efforts. But you cannot block your way out of an economic crisis.

If Malaysia wants to plug the RM3 billion leak, the industry needs a "new deal". We need more meaningful local aggregation—a one-stop hub that offers diverse content at a localised Malaysian price, not a converted US dollar price. We need to stop moralising piracy and start out-competing with it.

Until the legal media economy becomes as accessible, affordable and borderless as the shadow market, the pirate will remain Malaysia’s most successful—and most destructive content distributor.

From symptoms to systems

The question that remains for the Malaysian media industry is not just how to stop the thieves, but how to fix the market. As long as the legal industry relies on a "cat and mouse" game of blocking sites, issuing penalties, it will continue to lose.

Does it really matter anyway? It matters to the 30,000 workers whose jobs are at risk. It matters to the future of Malaysian creative industries, which is being starved of the investments it needs to compete on the world stage. To survive the "bleed", the industry must stop treating piracy as a moral failure of the audiences and start seeing it as a critique of its own business model.

Nur Syafinas Hanafi is a postgraduate student from Universiti Teknologi MARA (UiTM) in Mass Communication.

The views expressed are the authors' own and do not necessarily reflect those of Sinar Daily.