Pricing Piracy Out Of India Film and Music

The grey market for content in India has never been healthier – burgeoning middle class income and lower priced tv’s and mobile / mp3 are driving it upwards. On the supply side, mass digital storage means proliferation of pirated content and sellers is unencumbered. Estimates for the ‘pirated’ content market vary wildly between 250M USD and more than 8 times this amount. The truth is that nobody knows. The legitimate original content market is dwarfed by comparison (outside of cinema ticket sales).

India (and markets around the world) have tried to take on the issue of piracy through policing and prosecution. This has had minimal effect and, in markets like India, is very low down the priority list for law makers and enforcers.

Low prices and ubiquitously available pirated content make the problem very difficult to tackle. My neighbourhood pirated dvd supplier supplies to order, has the latest releases, a regular stall and offers subsidy on disc return and no questions asked replacement for poor quality product. All of this for 30 to 40rs a film and a friendly and efficient service.

The price for a legitimate film is 300 to 400rs in mainstream retail and the choice is somewhat limited as are the places to buy.

This delta in choice, availability and, most of all, price is what keeps piracy in business. It also means consumers are prepared to put up with the occasional poor quality film because the cost of buying quality is so much higher. The combination of convenience and low price is too compelling. Why would anyone pay 10X the price for essentially the same thing?

There is an opportunity to change all this. I believe consumers would gladly pay 2X or more of the pirate ‘market’ price (say 99rs) for a quality-every-time, original and timely product. They just won’t pay 10X.

If the industry wants to make piracy go away rather than being wedded to fighting a losing battle why not improve the price and availability of the product? The issue has long been that content rights owners (a complex area in itself) are wedded to the margin and revenue from a small volume of sales in the legitimate sector rather than being prepared to take the plunge and take a far larger volume of sales at a lower but still very profitable price point.

This is in part an emotional issue: my artist or film or production should not be sold at a lower price than the competition. An industry initiative is required to fix this, it would require a united approach. Doing this and harnessing the power of more and smaller sales channels and lower price points (market economics) and piracy will go away or at the very least be substantially reduced.

It is the business model that Netflix and Spotify have championed along with an initially reluctant but now enthusiastic music and film industry. The pricing, service experience, choice and convenience work for consumers and so create business for content owners. They also substantially reduce piracy.

In India and markets like it bandwidth and other issues mean the uptake of such service on mass are some way away but, even with physical product, the same could be true.

It is, in the end, a question of economic bravery and the preparedness to disrupt ones own industry, not for the feint hearted. The rewards, however, for the industry and consumers could be very substantial.

3 Comments

  1. Varun

    7 years ago

    Infact, i think people would be willing to pay more for convenience.
    Consider that currently, I can pay 100 rs for watching an HD movie on Tata sky (via their showcase channels to order from a limited selection) – if I have an HD+ box, i can record this movie and watch it as many times as possible. I also don’t need to see any ads. This is a great experience. Unfortuntely, the problem is that their movie selection is limited – 3-4 movies only at any given time (although they update this list frequently)

    Similarly, i can pay 150-300rs to watch an HD movie on apple tv – not too far off from what i would to rent a dvd (around 100rs in my neighborhood) – bonus is that I download and watch on Apple TVanytime of the day – even if i feel like watching the movie at 2am in the morning.

    Watching movies in theatres has become really expensive and some places in India dont even HAVE theatres (for example, shockingly, Port Blair) – what is the entertainment avenue?

    As a consumer, if you gave me an affordable tablet with content streamed OTA for a flat fee (for content+Data) it can be a great solution.

    I think the content exists, and to a large extent the mechanism exists also, it needs someone to stitch the consumer story.

    For example, can operators offer me a product where it says “unlimited bollywood music” – essentially streamed over 3G via SAAVN – instead of selling me a pack of100 rs for 300MB of data, much more useful to tell me that i can get unlimtied bollywood music for 100rs per month. Its focused, much more relate-able and ofcourse, super convenient.

    Reply
  2. Faizal

    7 years ago

  3. Shashikant

    7 years ago

    In the later part of last decade, Moser Baer has tried pretty much the same thing you outlined. Initially they decided to sell DVDs for under Rs 40. Over a period of time, they increased their prices to, IIRC, Rs 100. Then they added ads at the beginning of the movie that you couldn’t skip. That was my last purchase of that brand.

    Though, they seemed to have a large catalog, many of the marquee names (eg YRF) were missing. The big names continued to sell DVDs at a premium rates.

    Honestly, I don’t know why Moser Baer’s idea didn’t work work out. But, here are my hypotheses.
    – Much of the hindi film content is not of great quality. Very few films are created every year that you want to watch multiple times.
    – Very little effort goes into making the DVD. When I buy a DVD, I expect more than a digital copy of a theatrical release. Take a look at the Harry Potter or LOTR box sets and you will realize why the customers of those products are so price insensitive.
    – Side effect of the aforementioned point is that I hardly feel any DVDs of Indian films are worth giving as gifts to friends.
    – Tiny fraction of film’s revenue comes from DVD sales in India. So, film makers don’t care about it. We’ve a chicken and egg problem, here.

    While pricing and service are important, they are no substitute to a great product. (Side note: If you ever happen to be in Pune, do visit Kayani Bakery on East Street. They thrive only on the basis of a great product. Make sure to check their opening hours before you go.)

    This comment is only about video. Music could be a topic of another post.

    Reply

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