Piracy Plagues Bollywood and Indian TV and Music

The following article is from INDIA New England.

Rampant piracy and counterfeiting robbed the Indian entertainment industry of some $4 billion last year, or nearly 40 percent of the sector's potential take, according to a study issued recently by the U.S.-India Business Council.

Titled "The Effects of Counterfeiting and Piracy on India's Entertainment Industry," the study shows that losses from sales of illegal compact discs, DVDs, music downloads and cable television wiped out 38 percent of the entertainment industry's potential annual revenues and approximately 820,000 jobs.

In contrast, piracy losses in 2007 amounted to more than a quarter of the Indian entertainment industry's potential profits, according to Ernst & Young India Pvt. Ltd., which prepared the study for the Washington, D.C.-based U.S.-India Business Council.

"This is an enormous and unacceptable magnitude of loss by any measure," council president Ron Somers said in a March 27, 2008, speech at the Federation of Indian Chambers of Commerce and Industry FRAMES conference in Mumbai.

The U.S.-India Business Council released the piracy study at the FRAMES conference, Asia's largest convention on India's entertainment industry. More than 2,000 people from across the South Asian nation and abroad attended the three-day event, which concluded on March 27.

The council and the Federation of Indian Chambers of Commerce and Industry co-sponsored the piracy study as part of their Bollywood-Hollywood Initiative, which promotes sustainable growth and convergence between the American and Indian entertainment industries.

It was funded by the Global Intellectual Property Center of the Washington, D.C.-based U.S. Chamber of Commerce, which supports the council.

The report calls for a "robust legal ecosystem" within India, including the adoption of legislation that would protect intellectual property rights by targeting optical-disc piracy.

Somers said efforts to bring down piracy in India's entertainment industry have been hampered by the lack of a unified strategy; he urged the Indian government to boost penalties and hand out jail terms to offenders.

The country's television industry was hit the hardest by counterfeiters in 2007, with more than $2.7 billion in losses last year against total potential earnings of $6.9 billion.

The report attributes the bulk of these losses to illegal cable companies that underreported their subscriber numbers, bringing down the industry's potential profit by $2.5 billion.

Meanwhile, film piracy accounted for $959 million in losses, or 31 percent of the movie industry's potential revenues; thieves deprived the Indian music sector of $325 million in potential profits; and the gaming segment earned just $24 million, or $16 million less than it should have brought in during the year.

Proportionally speaking, India's music sector sustained the greatest losses, with piracy costing it nearly 64 percent of the $508 million that Indian artists and corporations should have earned, leaving them with just $183 million in revenues.

But piracy didn't just deprive the country's entertainment industry of billions of dollars in potential revenues; it also wiped out hundreds of thousands of jobs from India's economy.

Ernst & Young India reports that counterfeiters cost the Indian film industry 571,896 jobs and the music sector 133,434 positions.

"This study shows that the best way to make the boom in the Indian entertainment [industry] bigger is to stop the affliction of piracy," Amit Mitra, the federation's secretary general, said in a statement.

In the United States, the Bollywood-Hollywood Initiative has drawn considerable attention from individuals and companies with a stake in India's entertainment industry.

At the recent National Association of Broadcasters convention in Las Vegas, the report served as a "call to arms," according to the Washington, D.C.-based organization.

"The [Bollywood-Hollywood Initiative] really touched a nerve, and companies in the U.S. and India are lining up to offer their support," Greg Kalbaugh, US-India Business Council director and counsel, said at the conference. "Now that we've quantified the losses, we're working with government and industry to eliminate counterfeiting and piracy at the source."

Farokh Balsara, the head of Ernst & Young India's entertainment and media practice and a key author of the report, acknowledged the results are "shocking," but said that advances in technology - particularly in the digital-cinema arena - have enabled movie studios to release films across India during their first week in theaters and at the same time, cut down substantially on production and distribution costs.

Source: INDIAnewEngland.com

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