India entertainment loses $4 billion per year to piracy

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MUMBAI -- The Indian entertainment business loses $4 billion per year to piracy a new study released Thursday on the final day of the FICCI Frames conference.

India’s television industry loses $2.68 billion, while film lost $959 million. The U.S.-India Business Council (USIBC), in association with the Federation of Indian Chambers of Commerce and Industry (FICCI), commissioned the study. It was prepared by Mumbai-based consultants Ernst & Young India as part of the USIBC-FICCI Bollywood-Hollywood Initiative and covers film, music, television and video games. The study was funded by the Global Intellectual Property Center of the U.S. Chamber of Commerce.

As many as 820,000 direct jobs are also lost as a result of theft and piracy, with film hit hardest at 571,896 jobs lost in an industry that employs 5 million. Film jobs also take the biggest hit in the entertainment sector, the overall size of which is estimated at over $11 billion annually, growing at a combined annual rate of over 18%.

Indian films account for 62% of total pirated films while MPA studio films are at 20% and other foreign films at 18%.

"Piracy affects the industries of both countries and now that we have seen the situation in India, we will have a reciprocal study to gauge the impact of piracy on Indian entertainment in the U.S.,” said president Ron Somers in an interview.

FICCI secretary general Dr. Amit Mitra added, "For the average Indian who wants to increase his or her chances for being employed in Bollywood and associated industries, fighting piracy is a place where all our collective efforts must start."

Ernst & Young India national sector leader, Media and Entertainment Farokh T. Balsara, said, "Our Mumbai office collected data for this study from on the ground – via direct interviews with stakeholders from the Bollywood entertainment industry. We looked at the industry from every angle – the story was the same across the board: if we can slow or stop piracy, a direct correlation in the generation of wealth and employment will be the result."

In terms of tackling piracy, Somers said that the U.S. strongly supported the proposed optical disc legislation by the Indian government, "This legislation implies that just like currency notes, every disc will have a unique identification number so that if it is pirated, its origins can be traced."

TV is hit by advertising loss due to cable piracy and subscription revenue under-reporting by cable operators, which accounts for a $2.55 billion loss. The study points that while the MPA has "successfully brought down (cable) piracy of its content, regional producers have not been able to make an impact."

While Somers agreed that given the Indian film industry is fragmented with various industry bodies, "there is still an awareness to battle piracy and we hope this will be intensified with a more unified approach."

The music business loses $325 million while gaming suffered $40 million in losses. Pirated music product outstripped legit sales by almost double, given that the music industry is estimated at $183 million.

The Indian Music Industry (IMI) -- affiliated with International Federation of Phonographic Industries (IFPI) -- estimates that piracy of international product is less than 10 percent as reflected in legit sales.

Also previewed at FICCI Frames as a part of the Bollywood-Hollywood
Initiative was “Illicit -- The Dark Trade,” a documentary that will air worldwide, produced by National Geographic for the U.S. Chamber of Commerce's Global Intellectual Property Center.
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