Indian Entertainment Industry Faces ₹22,400 Crore Loss to Piracy in 2023: Urgent Call for Action
In 2023, the Indian entertainment industry faced a massive financial blow due to rampant piracy, losing an estimated ₹22,400 crore, according to a report by EY and the Internet and Mobile Association of India (IAMAI). This alarming figure highlights the growing threat piracy poses to the media and entertainment sectors, making it the fourth-largest segment by revenue loss in the industry. The report underscores the urgent need for stronger regulations, technological solutions, and collaborative efforts from all stakeholders to address the issue.
The Scale of the Piracy Crisis
According to *The Rob Report* by EY and IAMAI, over half (51%) of Indian media consumers access content from pirated sources, with streaming services accounting for a significant 63% of this consumption. This widespread use of unauthorized content contributes significantly to the losses in the entertainment industry. Of the ₹22,400 crore lost to piracy, ₹13,700 crore came from pirated content in movie theatres, while ₹8,700 crore was lost from content on OTT platforms. Moreover, the report estimates a potential loss of ₹4,300 crore in Goods and Services Tax (GST) due to this unauthorized consumption of content.
Piracy involves the illegal copying, distribution, or use of copyrighted materials like movies, music, software, and other intellectual properties. This form of theft infringes on the creators’ rights and leads to significant financial losses for them and the broader entertainment ecosystem. As digital content becomes more accessible, piracy remains a major challenge for the Indian entertainment industry.
Growing Digital Entertainment vs. Piracy Threat
The growth of digital entertainment in India is undeniable. With filmed entertainment projected to reach ₹14,600 crore by 2026, the potential for further industry expansion is significant. However, as Rohit Jain, Chairman of IAMAI’s Digital Entertainment Committee, pointed out, this potential is being severely undermined by rampant piracy. Jain emphasized that combating piracy requires a united effort from all stakeholders, including government bodies, industry players, and consumers.
“The rapid growth of digital entertainment in India is undeniable. However, this potential is severely threatened by rampant piracy. It is imperative for all stakeholders—government bodies, industry players, and consumers—to unite in combating this issue,” Jain said.
The report sheds light on the reasons why many consumers turn to pirated content. High subscription fees, limited availability of desired content, and the inconvenience of managing multiple subscriptions are key drivers behind the choice to access pirated material. This indicates a need for content providers to re-evaluate their pricing models and accessibility strategies.
Demographic Trends in Piracy
Piracy in India is especially prevalent among younger audiences aged 19 to 34. The report highlights a gendered divide in piracy preferences, with women tending to favor pirated OTT shows, while men are more inclined toward classic films. These trends suggest that specific genres and content types are particularly susceptible to piracy.
Interestingly, 64% of those who access pirated content expressed a willingness to switch to authorized channels if such services were available for free, even if they included advertisements. This presents an opportunity for OTT platforms and content providers to explore ad-supported, free content models to combat piracy. However, the report also found that about 70% of pirated content consumers do not want to purchase OTT subscriptions, further complicating efforts to curb piracy through traditional paid models.
Addressing the Piracy Challenge
Mukul Shrivastava, Partner and Forensic M&E Leader at EY, stressed that current measures to combat piracy have been insufficient. He advocated for stronger regulations and a more unified approach across the industry to tackle the problem. Shrivastava also emphasized the role of technology in curbing piracy, noting that leveraging technological tools to prevent the creation and distribution of pirated content will be crucial for protecting intellectual property.
“Existing measures against piracy have been insufficient. Leveraging technology to combat the creation and distribution of pirated content will be critical. This will ensure that original creators are able to protect their intellectual property and monetize what is rightfully theirs,” Shrivastava said.
One of the report’s key findings is the contrast in piracy trends between Tier I and Tier II cities. Piracy is more prevalent in Tier II cities, where users often access illegal content due to the lack of authorized viewing options and income disparity. In contrast, Tier I city users tend to watch pirated content primarily to access older films. This highlights the need for better access to legal content in smaller cities to reduce the temptation to resort to piracy.
A Call for Action
The loss of ₹22,400 crore to piracy in 2023 serves as a wake-up call for the Indian entertainment industry. To curb the growing piracy problem, stakeholders must come together to implement stricter regulations, deploy technological solutions, and address the root causes that drive consumers to pirated content. Additionally, content providers need to explore more affordable, accessible, and ad-supported models to attract audiences away from pirated platforms.
The Indian entertainment industry holds immense potential, but realizing this potential will require a concerted effort to fight the persistent threat of piracy and protect the rights of creators.