Is content more susceptible to piracy now ?, Marketing & Advertising News, AND BrandEquity
An elevator attendant watched the latest movies on his phone while he was carrying people up and down. Sometimes it’s films that come out the same day. When asked how he managed to get the printout, he just offered to get you a copy via USB stick for Rs 25.
In the early 2000s, you will remember the roadside “stalls” selling CDs with five to seven of the latest films, some in theaters at the time, for a nominal price of Rs 50. It was the face of the hacking for most millennials. But is piracy a product of the era of compact discs and flash drives?
As filmmakers prepare for another forced sabbatical from theatrical releases, digital platforms are providing much-needed respite from a depressing situation. Will piracy play the role of party mess and erode the prospects of an already struggling industry?
A brief look at over 100 years of cinema in India will tell you that piracy has had a long history with Indian audiences. In the age of physical reels (yes, those vintage movie reels that are now hipster decor), pirates would steal the entire reel as it was transported from one movie theater to another. With the digitization of content delivery (India boasts of having over 90% digitized cinema screens), hackers have not carried out a physical heist, but rather have “torn” or recorded films to mass-produce CDs for sale by the roadside. Today we have torrent sites to download quality blue-ray content.
As Jehil Thakkar, Partner and Leader, Media and Entertainment, Deloitte India, says, “Hackers and media companies are in a checkered battle. Media companies will find technology to mitigate piracy. And in a few months, hackers will find a backdoor or loophole in this technology.
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To better understand the dynamics of piracy and the production of movies or content, it is important to know the triggers. Two widely accepted drivers of piracy are access to content and pricing. In the days of film reels, content traveled much slower, and demand for popular content triggered piracy. Even with digitization, movie theater windows meant Hollywood films were arriving in India much later than the rest of the world. Access therefore became the trigger. However, after foreign films started releasing in India simultaneously with North America, price was the issue.
Thakkar says that as long as there is a loophole in the industry, piracy will exist. Especially given the increased access to smartphones and the reduction in data prices in the country, access to pirated content has become easier. That said, the low price of data and the high penetration of smartphones has also made it easier to access legal content streams. In this scenario, the easy targets of piracy become the flagship movies that are the subject of massive anticipation.
While Radhe is a more recent example, a few years ago, the magnum opus of SS Rajamouli Bahubali 2 also fought piracy. Nonetheless, it continued to make Rs 1,100 crore (net after tax according to industry estimates) at the end of its theatrical release. The cost of the film was around Rs 250 crore. In the absence of a theatrical release, Radhe reportedly felt the pinch of piracy more since Zee5, the film’s official streamer, did not have a free viewing option for non-subscribers. If anything, the platform would have hoped to get subscribers by bundling the film through a subscription offer.
Does this mean producers may be reluctant to release movies on OTT? Not necessarily, analysts say. They cite the example of Netflix. Netflix’s entry into India in 2015 was in many ways the inflection point for the OTT boom in the country. Many titles have been released only digitally over the past 6 years, and very few have been the victims of widespread piracy.
Thakkar says, “As more and more paid OTT services emerge, people who have a subscription to a service already have access to content on this platform. Thus, the need to hack the content does not arise. They don’t have to pay extra to see something. Access and pricing issues are therefore resolved. Not to mention that with the crackdown on piracy, it has become increasingly difficult to pirate content. And with the pandemic, go to the neighborhood ‘hiding“and getting movies on your smartphone is no longer a viable option.”
Sanjay Bhandari, a chartered accountant who also works with producers for film financing, adds that it is important to understand the piracy life cycle. The lifespan of any form of pirated content is limited. “So in order for people to watch the content later, they’ll probably have to go for the licensed version. In my opinion, the piracy will not significantly affect the producer’s decision to explore a digital version. Instead of piracy, it would be the business parameters of any film profile in terms of script, production, scale, budget, expected revenue and profitability, financial capacity to wait for theaters to open that will decide digital output.
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Experts point out that in the current situation, digital releases have in fact given the industry a way to sustain itself. Since March 2020, the schedule of theatrical releases at all levels has been disrupted. When a movie is ready and cannot be released, it suffers a loss as well. Thus, a digital version decreases the risk of loss of working capital.
What the film industry is experiencing today is similar to what the music industry experienced a decade ago. Song piracy was rampant, eating into the income of publishers and artists. While radio was a viable source of income, sites offering illegally downloaded songs were everywhere. With the advent of audio OTT, labels and platforms have been able to experiment with pricing and advertising models to combat piracy. Today, with options from international platforms like YouTube Music, Amazon Prime Music (which comes free with an Amazon Prime subscription) and Spotify, and Indian platforms like Gaana and Jio Saavn, music consumers have plenty to choose from. ‘legally listen to the music of their choice, and the music industry has seen a significant decrease in piracy. Today, new artists are born digitally and most new music is launched digitally.
So how can the film industry fight piracy? Technology would be the key, experts believe. “We are working with cyber police to report and remove sites that pirate content, but it’s an ongoing battle,” says a movie director. Bhandari suggests awareness and education campaigns, strict enforcement of anti-piracy laws, setting up robust technical systems using AI (artificial intelligence) software to combat hacking in time real.
So what is the impact of hacking on revenue? Analysts observe that the biggest losers in piracy are short films. “A great movie, in a non-pandemic era, would have had spinoffs in theaters regardless of piracy. It’s a matter of experience, isn’t it? There are people who appreciate the big screen experience. So a End of Game or one Bahubali would attract footsteps. Even if a movie isn’t made for the big screen, going to the movies is an experience. So you see people flocking to theaters to watch a Donor Vicky or more recently a Andhadhun. However, if these latter two films had been the victims of widespread piracy, their business would have been affected, ”he says.
The consensus is that piracy is unlikely to spoil the digital release party. On the contrary, the forced adoption of digital versions due to the pandemic would push the OTT industry to innovate with its pricing and marketing in the near future. In the long run, legal platforms with a viable AVOD model will be able to monetize better if they guarantee legal content without piracy. The era of digital OTT can challenge content pirates as much as they have challenged the content industry over the years.
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