India is one of the world’s largest consumers of pirated content. The country’s film industry loses an estimated US$4 billion and around 8,20,000 jobs every year due to piracy. India’s Bollywood film industry, the largest producer of films in the world, is severely threatened by physical and online piracy. Another report by the US-India Business Council and the US Chamber of Commerce’s Global Intellectual Property Centre reveals that losses to the industry from trade in illegal CDs, DVDs, music downloads and cable television account for 38% of potential sales or approximately US $4 billion.
More than 65% of the software in India is pirated. Nehru Place shot to ill fame when the US Trade Representative (USTR) listed it as one of the 30 most notorious IT markets in the world thriving hubs of pirated products. Nehru Place accounts for half the Rs 12,000-15,000 crore worth of legal software sold in India every year. But it is one of the largest computer markets in India responsible for almost 60% of the high-end pirated software, operating systems, and accessories. Most of the resellers in nearby small towns get their stuff from here. Lack of stringent laws in the segment and minimal fines has led to the failure of keeping piracy in check. One of the popular modus operandi deployed towards piracy is the rough file-sharing networks. Furthermore, the annual International Data Corporation (IDC) and Business Software Alliance global software piracy study puts the rate of pirated software at 64%, representing a gross annual loss to the software industry of US $27 billion.
Piracy of films, music, video games and television programs now makes up 23.8% of total internet bandwidth. 432m internet users and 13.9 billion website view sought pirated content during January 2013. 98% of data transferred by peer-to-peer networks is copyrighted. Business managers feel the evolving web will contribute to increased trademark infringements (26%), fraud (29%) or cybersquatting and domain name hijacking (36%).
The pirates have outnumbered the watchdogs. According to Rose, since the scale of the problem is so immense, watchdogs have had to concentrate on three fronts in their efforts to slow down TV and movie piracy:
- Pursuing “enterprise” piracy, such as large-scale DVD production warehouses.
- Setting up systems to identify and have removed infringing content posted to YouTube and other mainstream audio-video sharing sites.
- Trying to make examples of “small-time” players by suing individual file-sharers.
Films, music, TV, radio, and electronic games; The story was the same across the board: if we can slow or stop piracy, a direct correlation in the generation of wealth and employment will be the result. The effects of counterfeiting and piracy on India’s entertainment industry estimates the piracy rate at 60%. Though piracy is damaging creative communities across the world, it can be curbed if we take steps to collectively address this problem.
The pirates don’t directly make money from the downloads. They make it through the ads they host on the sites – more traffic would mean more clicks. Of the 500 sites that indulge in circulation of pirated content in some form or the other, 150 thrive only on piracy. Nearly half of the 150 are from the US, followed by 11 from Canada, 9 from Panama and six from Pakistan. That the top 100 sites make ₹3,500 crore ($510 million) annually shows how serious the problem is.
The Telugu film industry lost about ₹360 crore in the first nine months of this calendar year due to online piracy. In all, there were about 1.80 crore downloads or web streamings this year so far. “An estimated 55 lakh viewers watched four big budget movies Baahubali, Srimanthudu, Rudramadevi and Bruce Lee (with budgets of ₹40 crore or above) in the last three months,” he said, quoting a report. These films were hosted through a whopping 2,700 piracy links, making it virtually difficult for the industry to take action. You take down this link or site, it surfaces in yet another link. And within the crucial first two weeks, when they hope to rake in good openings, the film would have been downloaded in lakhs.
Though the producers are getting John Doe or Ashok Kumar orders from local courts that give them protection from copyright infringements by unidentified defendants, they hardly see any respite from piracy. With the problem assuming gigantic proportions, the film industry has sought the help of Internet Service Providers (ISPs) to keep tabs on the erring sites and block the content when notified by the industry.
Issues like copyright infringement, film piracy, camcording and content leakage weaken the industry by hampering the deserved revenue production. Economies with supportive copyright protection are at least 30% more likely to have larger and more dynamic content and media sectors that are countries with less favorable IP regime.
High prices for media goods, low incomes, and cheap digital technologies are the main ingredients of global media piracy. Media piracy arises when market failures meet increasingly cheap and improved infrastructures (bandwidth, hardware) of information transmission. Does this pose a problem to owners of copyright? Of course, it does, but there is nothing new about that. Every technological advancement starting from the print revolution has transformed the ways we access knowledge and culture and innovations in technology have also been accompanied by innovations in business models.
If a site has been blocked by the Indian government, a person going to the site will see a notice saying it has been blocked—using a VPN to circumvent the block to download the movie could then be construed as violating the Act. A legal crackdown helps—a study published by Technology Policy Institute (TPI) shows that France saw a 22-25% increase in digital music sales after the HADOPI anti-piracy law and Sweden saw a 36% increase after the IRDEP law, but the effects don’t last.
India’s film industry, said to be the largest globally with some 1,000 movies produced each year, earns around $2 billion from legitimate sources such as screening at theatres, home videos, and TV rights. But with $2.7 billion, piracy earns 35 percent more, and a way out has proved elusive.According to the latest KPMG-Ficci report on the Indian media and entertainment sector, the film industry here is projected to grow from Rs 138.2 billion ($2.09 billion) in 2015 to Rs 226.3 billion ($3.43 billion) by 2020 at an annual growth rate of 10.5 percent. But piracy could also grow exponentially unless checked. Adding another dimension, Patrick Kilbride, Executive Director for International IP with Global Intellectual Property Center of the US Chamber of Commerce, said piracy also limits the economic contribution which creativity can make in India.
Even as the film is released, the pirated copy of the same film becomes available in the ‘grey’ market within 1-2 days, at a price one tenth of the original. Duplication of content in the digital medium enables pirates to disrupt the chain of maximizing profits for distributors. While the costs of reproducing every duplicate copy constantly decreases, the quality of the content remains constant with each generation of duplication.