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Friday, Dec 24, 2004

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PROFITS BEYOND PIRACY

THE CENTRE'S INTENTION to enact legislation to curb optical disc piracy, revealed by the Information and Broadcasting Minister, Jaipal Reddy, at the International Film Festival of India at Goa, will shore up the morale of the industry as it explores solutions to the problem of illegal trade in videos. Individual States are sharpening legal sanctions against the clandestine practice. Tamil Nadu has placed alleged pirates in the same category as goondas and bootleggers, to be tackled through stringent laws that provide for prolonged detention on executive orders. The turnover of piracy business in India has been estimated by the United Kingdom's Film Council (on the basis of a study done in 2002) to be $66 million a year. Indian film makers must feel reassured that studios in the United States, the major producer of international entertainment, are also trying to ward off a wave of technological challenges posed by the Internet to their business prospects in addition to combating worldwide piracy that they say deprives them of $3 billion in lost earnings.

The western debate on piracy is focussed on the challenge the new digital technologies pose to the entertainment business. Many observers see this as the second wave of disputes over the legality of electronics that allows users to replicate and share entertainment such as videos. The first round of litigation was witnessed in the 1980s when the American film industry made a futile bid to get the video tape recorder (VTR) banned by law. The issue was settled in favour of the consumer, who won the freedom to record television programming of his or her choice under what has come to be called the Betamax ruling. Taking the place of the VTR today are applications that let users share movie files over networks. A predictable round of litigation is under way with the Motion Picture Association of America, which has lost one early round, ranged against thousands of file sharers who believe that there cannot be omnibus copyright restrictions based on fears that films would be pirated and circulated online. India's dilemma on the piracy question is less complex because it does not have a critical mass of broadband users who can share movie files. The film industry's problems arise primarily from the reluctance to sell the rights for domestic Digital Versatile Disc and Video Compact Disc releases; this creates favourable conditions for piracy to thrive.

A minority of actors and industry professionals has been recommending that the Indian film industry must tap the profit potential of videos and encourage the organised retailing of licensed entertainment products. The industry must acknowledge that piracy thrives on the failure to give the consumer (in the words of the Electronic Frontier Foundation in the U.S.) a good product at an attractive price point. An affordable option for most consumers is the video rental library. The expansion of this important link in the licensing chain has, however, been affected by unfounded suspicion bordering on paranoia. The proposed Central law on piracy could give a legal basis for video rental libraries to function, a measure that should enthuse the States to adopt it and benefit from the new revenue stream. The forward-looking views of some actors and producers on DVD licensing that were heard at the IFFI in Goa must help the industry overcome its paranoiac fear of technology and embrace it. India has the lowest number of film screens per million population among major film-producing and film-viewing countries. But it has a growing base of video players and there can be little doubt where the prospects for growth lie.

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