The latest estimates for piracy in India are approximately Rs 1.50 billion in the music industry and Rs 190 billion in the movie industry, as quoted in reports by the IMI and FICCI. However, these are primarily derived from “industry discussions”, where there are incentives to overestimate losses. These numbers outdo estimates from other countries by orders of magnitude. Piracy rates from the EIPO-OECD studies or the global IViR study are in the range of 3-5 per cent, while in India the lowest piracy figures are quoted as 50-60 per cent, and losses in the digital sector are given to be 99 per cent.
Without understanding either the losses due to piracy or the causes behind them, India is driving blind. In addition to the methodology and factors developed in other countries and settings, we need to take into account several aspects that are unique to India. The first is our massive music and movie industry, with a presence across the world among our large diaspora as well as a global viewership. The current distribution networks do not provide legal access to all the regional language content a user is willing to pay for, resulting in sizeable cross-border losses.
The domestic market picture is more complex. There are severe financial constraints among households in India, and affordability and pricing plans are key. Similar to FMCG companies selling by the sachet, distributors may find that smaller installments are more affordable to Indian consumers due to cash constraints. The provision of cheap and easily accessible legal content through streaming services may lead consumers away from piracy. Payments remain a barrier for online services, which require card payments for subscriptions. Technological advancements in payment systems facilitated by industry stakeholders may help in this regard.
In a population where literacy is a limitation, financial and legal literacy remain barriers too. Consumers may have trouble understanding pricing plans of streaming content, or understanding the laws and regulations surrounding viewing and sharing pirated content, either locally or at a commercial level. Socio-cultural aspects surrounding movie viewing as well as live events, and a long history of public broadcasting in India may affect the willingness of consumers to pay for quality content.
A deeper problem that affects piracy is legal. The legislative response to tackle infringement has largely been to push for harsher penalties, without necessarily distinguishing between the kinds of piracy that can occur (for personal consumption versus on a commercial scale, for example). Although the power to legislate on copyright rests with the Centre, some states have included piracy in statutes dealing with other issues related to public order, which is a state subject. Piracy is punishable under the Goondas Act and similar legislations in a few states, which were introduced to deal with drug trafficking, sex trafficking, physical violence and the like. The penalties provided for under these statutes include preventive detention, which is a disproportionate response to piracy, which is a civil wrong. There is also a lack of uniformity in the judicial response to piracy, with different high courts responding differently to cases involving infringement, and a broader problem of weak enforcement of laws by courts and the police due to resource constraints.
Consumer surveys based in India provide some information on the drivers of piracy but have not been used to impute aggregate losses. In the IMI Digital Music study in 2018 survey, many users stated that downloading for free through piracy stops them paying for streaming: 38 per cent of respondents said they prefer downloading music for free, and 32 per cent say they can download whatever they want for free. A 2016 report on the film exhibition sector by Nirmal Bang found similar trends, with 52.2 per cent of the respondents opting out of watching movies in multiplexes if the price of the ticket increases by 5-10 per cent.
A concerted effort can only occur if the government allocates resources towards estimating and understanding piracy. Building on the methodologies of the OECD and the EUIPO using customs and website data, and the consumer survey in the GOP study by the IViR is the first step. Understanding the context for India would be next, including the role of law enforcement, literacy, payment systems and financial constraints, and socio-cultural factors. Only then can we curb piracy — facilitate users’ access to content at affordable prices, while ensuring that the producers are able to earn from their investments in developing high quality content.
The author is faculty at ISI Delhi and a fellow at the Esya Centre. Views are personal