The Indian Music Industry (IMI) has been at the forefront of the piracy issue, combating it from all ends to ensure that perpetrators are convicted of the crime. With more than 150 record labels as members of the IMI, only seven of them are actively participating and working towards doing something proactive. In a candid tête-à-tête with Businessofcinema.com, IMI secretary general Savio D’souza shares his opinion on the issue of piracy, the involvement of the industry, and the way forward.
How does the IMI approach the issue of piracy?
At IMI we have a slightly different approach. We know the problem, we know what is happening and we know the problem is only going to get compounded and bigger. We realize that mobile chip piracy is going to be a bigger problem than internet piracy for the music business.
Why do we say that we lose more money to it?
Because, we have a revenue stream unlike the internet, where there is no revenue stream. Each of these revenue streams are now being hit by piracy. The IMI has a holistic approach to handle this problem. The first raid the IMI conducted was in 1976 in Ahmedabad, the person was convicted for two years. So our anti-piracy actions started much before anyone ever even thought about it. The real steam engine to the anti piracy operation was in 1996, when Julio Reberro took over as the head of the Anti Piracy operations.
Since that, in the last ten years the IMI has registered over 15,000 cases in this country. Whether it’s good or bad, no one really knows, all we know is no one else has registered 15,000 cases. It is important because if you have a holistic approach then there is a way to implement the law in this country.
Any other person from the industry or body who says the police in the industry don’t implement the law, are lying. The police in this country do implement the law, and that is the difference between the IMI’s approach and the rest of the industry. Other than just looking at registering cases, we follow the case right from its registration till the point the pirate is convicted or acquitted.
We have an internet anti-piracy team on for the last six years, which no one knows about. The other important aspect that the IMI has looked at is that last year we did over 75 police training programs. Last year we saw about 150 convictions; it is these numbers that speak for themselves.
So if the system is actually working then where is the problem?
My biggest worry about anybody who talks about piracy or speaks of the losses due to it is that they do not ask the industry what they are doing about it. It is very easy to criticize, but they don’t ask the biggest film producer in the country how much they actually invest in anti piracy.
Do you actually have a strategy on how you are going to deal with it?
Yes we do, for example, currently in the country mobile chip piracy is going to be a big issue, two years ago the IMI started building capacity for mobile chip piracy, we thought it would be a problem. Today we are registering nearly 250-300 cases per year. We are the only anti- piracy body that is registering such cases. In the next few months we will launch elaborate plans to deal with mobile chip piracy so that is the kind of work we are doing. We don’t go to conferences and scream about internet piracy, but it is not that big a revenue stream for us. So I am not really countering that problem, but I face issues where money is involved. That’s what the IMI is doing.
So are you saying internet piracy is not that big a threat?
I am not saying internet piracy is not a big threat. But it is not a focus area in the manner in which everyone in India is making it out to be. Because my money is still coming from cassettes and mobile, I must defend my cash cows. Of course I need to watch out for my stars (BCG Matrix), if I have a cash cow I need to be focusing on it and my cash cows are still CDs, Cassettes, and my next would be mobile chips. The point is that the internet is still just a star; there is nothing I can do about it.
While you are defending piracy on CDs and cassettes, the truth is that it is being downloaded from the internet.
Not really. That is a misconception that people have. A large number of pirates are actually buying a CD and making pirated copies of it. It is not really coming off the internet in such a big manner.
A large number of the youth it is coming from the internet.
Ok fine if it is coming off the internet and if I have an anti-piracy strategy to stop it on the internet, how do I create a marketing strategy to get them to buy off the internet? For example if two million iPods are sold and each iPods could have 200 songs then you should have sold nearly 400 billion songs. However, one has not even sold 200 million songs. And this clearly tells you that here piracy levels are at 99%, whereas on physical format piracy level is still at 50%, so it is still my cash cow.
It is easier to go to the police in Mumbai and tell him how to deal with physical cassettes and CD piracy than to go and tell him about an alien concept where no capacity exists. We are in an evolutionary phase and we must defend our cash cow and watch out for the stars. It does not mean we don’t have an internet anti-piracy strategy. In the last year we closed down 600 sites that were promoting pirated music. The good thing is that we know where we are putting our money.
So where are you putting the money?
We’ve invested about 60-70% of our funds in physical; in 2009 we’ll put in 35% in mobiles and we will still keep 5% on the internet. We have a strategy in the manner in which we invest our money.
How easy or difficult is the process from registering a case till the time the pirate is convicted or acquitted?
See truthfully, cases that were registered between 1997 and 1999 are ripening now. It is taking 5-6 years to come up. India is showing very different trends, if you go to Bihar none of the cases have even come up to the trial stage as it is in Gujarat. If you go to Jaipur the cases are being decided in two and half year’s time. If you go to Tamil Nadu it is being done in a year’s time, but the punishments are not that strict. So there are different treatments being meted out by the different judiciary across the country. You cannot paint India with one brush, because your judiciary is a state subject. You are looking at convictions between two to seven years.
How easy or difficult it is depends on various factors. It depends on the quality of the case registered. For example in 1997 we might have gone and picked up a pirate selling 30 CDs on the road. While it must seem like a small number, but to build capacity it is a great exercise. Even if a person is convicted for two days or one day, it is still a conviction. What cases we are registering today are those picked up with 99 CD writers and 150 CD writers; in those cases you will see tough punishments, because we are building capacity.
So in essence you are working to get pirates caught, but the slow process is actually hampering.
No. That’s the wrong way to look at it. The right way is, yes some things are happening. It is a bottleneck. Till today no one even registered the cases, we did. We have 15,000 cases. We are looking at a bottle neck in the legal end of the spectrum. For example in Tamil Nadu we are getting convictions but not higher level convictions, so let us do training programs for public prosecutors on why they should push it as a serious crime and higher crime.
Similarly, in areas like Bihar where the cases are not coming up we need to have another training program but we need to address the bottleneck, and that is what IMI is doing. You can’t say that I am not getting results across the country so I must stop tackling an area where there is no action being taken. Piracy occurs across the country. I need to clean up the bottleneck across the country.
While you convict one person, there are tons of others who are still flourishing. They function in the form of a network.
There is a critical number of anti piracy actions required to actually see the model succeed. Today IMI does about 3000 raids a year. If you want to see tilting of the number, you need to see 30,000 actions a year.
IMI alone, contributed by seven members putting money to combat piracy cannot fight the battle for the film, gaming, software and book publishing industry. If all the industries together sit on the table and talk about it we can ensure 30,000 actions a year. Thirty thousand actions a year will change the way the judiciary looks at it, convictions are done and the process in totality. It is not the IMI’s fault; it is the entire industry’s fault that they are not investing enough resources.
So how many of the IMI members are actually active?
The IMI consists of 150 members. But if you ask me who pays money, only eight companies do. That is Saregama, Tips, Venus, Sony, Universal, EMI, Times Music and Aditya Music. Now how can seven guys fight a battle for all these industries? Assume we make 800 movies a year, even if everyone puts in Rs 5 lakhs each; that’s Rs 40 crores. It’ll stamp out piracy the next day. You are talking of a loss of approximately Rs 2000 crores for the film industry–what are we asking as a corpus fund? Rs. 40 crores—that is the marketing budget of three movies.
Surely people are not addressing the problem. You say you have money to pay your actors unbelievable sums of money, but nothing to put towards anti piracy. If the IMI can do it, why isn’t the biggest producer or home video manufacturer doing it? What is the strategy? Do you have an anti piracy strategy before a movie releases, a watermarking technique? Do you have a copy protect technique? A head of enforcement? You don’t have anything. Why do you keep crying about it then?
Have you actually sat down with industry professionals and addressed the problem?
We’ve sat down with everybody. You name the person and we have spoken to them. They only cry. They don’t want to do anything proactive. Courtesy piracy, a few professionals state that music properties rather than actual music sales will actually drive revenue in the industry. These concepts take about two or three years to germinate and grow, we’ll see after a few years if this actually works and succeeds. Happening once is not the rule of the game; it is the exception of the game. If you are in the music business, the music sales are what the major concern should be.If you are making Rs. 600 crores on the physical format and are losing Rs. 600 crores due to piracy, then that’s a Rs. 1200 crore market. Similarly if you are making Rs. 100 crores in mobile and are losing Rs. 500 crores due to piracy then that’s a Rs. 600 crore market. How much is all these show worth? Is it a Rs. 100 crore or Rs. 500 crore market? Ask them to answer that. You need to address where your revenue is coming from.
Besides having strategies, where does the solution to this grave problem lie?
The solution lies firstly in companies taking responsibility that it is their fault; they should stop talking and start acting. You need to allocate regular budget for anti-piracy, it is not a piece meal budget. As much as you have a marketing budget, you need to have an anti-piracy budget. You then need to draw up a strategy.
Wouldn’t you agree that while the IMI targets the pirates, there is nothing done acting on the consumer who actually purchases the pirated goods?
See the consumer who buys pirated goods is picking it up as a value buy, while the seller is actually breaking the law. If I had my way I’d pick up people picking up pirated goods, but such is not the case. There will be a tremendous backlash if we pick up kids committing the crime. But someday I will push the law to see it. The law clearly states that someone abetting the crime can be picked up but no one really does it. The punishment for abetting this crime is six months imprisonment.
Is there some sort of communication message that is being driven at consumers?
We will be releasing an advertising campaign, which will be aired on television. We just broke a radio campaign on selected radio stations. These are directed at consumers.
How successful have the actions of the IMI been to the industry?
Has it really increased the revenues of the music industry? The answer is No. Has it stopped the downfall of the music industry? The answer is yes. There has been a minuscule growth but it has taken 4-5 years to bring it up.
Is there a network within the industry where you can get the information regarding which company holds the copyright, making it easier to prosecute the perpetrators?
Within the music industry we get the information at the press of a button. With respect to the rest of the industry 48 years, sorry make that 408 years and that is the problem. We can’t tell the cops to go pick up games and films–doing that is simple but then when it comes to giving the copyright documents that is very tiring. The pirate is simply innocent till proven guilty.
Very obviously you have such a fantastic team, would you say that despite this you are working under a lot of limitations?
Absolutely. First is that there is no application of the mind to the problem due to which there is a huge limitation and the other is due to funds.
Anything you would like to say on a parting note?
I wish that film producers would come to our office to sit and talk about anti piracy. If any film producer in this country wants to defend his IP, we will defend it for him. It’s an open invitation, I am willing to sit with them on a one on one basis, and if no one comes forward, you have your answer!