India’s Entertainment Industry Faces ₹22,400 Crore Loss in 2023 Due to Rampant Piracy: Report Calls for Stronger Regulations and Collective Action
In 2023, the Indian entertainment industry experienced an alarming financial loss of ₹22,400 crore due to widespread piracy, according to a report by EY and the Internet and Mobile Association of India (IAMAI). This comprehensive report, titled “The Rob Report,” sheds light on the significant impact of piracy on the media and entertainment sector in India, highlighting the urgent need for regulatory reform and collaborative efforts to tackle the growing issue.
The report reveals that 51 percent of media consumers in India access content from unauthorized sources, with streaming services contributing significantly to this problem. A staggering 63 percent of media consumption through streaming services comes from pirated content, illustrating the widespread reach of illegal digital platforms. In terms of economic scale, India’s piracy economy in 2023, valued at ₹22,400 crore, ranks fourth when compared to the legitimate revenue streams generated by the country’s Media and Entertainment industry.
Piracy from movie theaters accounts for the largest share of the losses, generating ₹13,700 crore in illegal revenues, while content pirated from OTT (Over-The-Top) platforms resulted in an additional ₹8,700 crore in lost income. The report also points out the impact on the government, estimating that potential Goods and Services Tax (GST) losses could reach ₹4,300 crore, further highlighting the ripple effects of piracy on the broader economy.
Piracy is defined as the unauthorized copying, distribution, or usage of copyrighted material, including movies, music, software, and other intellectual properties. It represents a form of intellectual theft, as it directly infringes on the rights of the creators, leading to substantial financial losses. This illegal activity not only deprives creators of their rightful earnings but also threatens the overall sustainability and growth of the entertainment industry.
Rohit Jain, Chairman of IAMAI’s Digital Entertainment Committee, emphasized the urgency of addressing the issue. He noted that while the growth of digital entertainment in India is undeniable, with filmed entertainment projected to reach ₹14,600 crore by 2026, piracy poses a serious threat to this potential growth. Jain urged for a collective approach involving government bodies, industry players, and consumers to combat the rising menace of piracy effectively.
The report identifies several factors that drive Indian consumers towards pirated content. High subscription fees, unavailability of desired content on legal platforms, and the complexity of managing multiple subscriptions were cited as the primary reasons why people turn to unauthorized sources. Many consumers find it easier and cheaper to access content illegally rather than pay for legitimate subscriptions.
Piracy, according to the report, is particularly prevalent among younger audiences aged 19 to 34. Women, in particular, tend to favor OTT shows, while men gravitate more towards classic films. These viewing preferences contribute to the consumption of pirated content on a large scale.
One of the more interesting insights from the report is that 64 percent of consumers who currently access pirated content expressed a willingness to switch to authorized platforms if they were offered for free, even if this meant tolerating advertisements. This suggests that consumers are not necessarily opposed to watching content legally but are driven by economic factors and the availability of free, albeit illegal, alternatives. The report calls on content providers to rethink their pricing strategies and improve the accessibility of their platforms to better compete with piracy.
Additionally, the report highlights a significant divide in the consumption of pirated content between Tier I and Tier II cities. Consumers in Tier II cities are more likely to engage with pirated content, primarily due to limited access to authorized content, income disparity, and fewer local theaters. In contrast, Tier I city dwellers tend to pirate older films, while Tier II audiences seek out recently released movies through illegal channels. This behavior underscores a resistance to paying for cinema tickets or OTT subscriptions, especially in regions where alternatives may not be readily available or affordable.
Mukul Shrivastava, Partner and Forensic M&E Leader at EY Forensic and Integrity Services, further reinforced the need for stronger anti-piracy measures. He noted that existing efforts have been inadequate in curbing piracy and advocated for robust regulations, combined with industry-wide collaboration, to mitigate the risks posed by piracy. Shrivastava also emphasized the importance of leveraging technology to combat the illegal distribution of content, pointing out that safeguarding intellectual property is critical for ensuring that creators can benefit financially from their work.
One of the key recommendations from the report is the need for greater public awareness about the legal and ethical implications of piracy. In Tier II cities, in particular, there is often a lack of awareness about the perils of piracy, which, coupled with easy access to pirated content, perpetuates the problem. The report suggests that educating consumers about the consequences of piracy—both for the entertainment industry and for them as consumers—could play a crucial role in reducing piracy rates.
The findings of “The Rob Report” highlight the critical nature of the piracy problem in India and call for immediate and coordinated action from all stakeholders. The report suggests that a combination of stronger regulations, technological solutions, better pricing models, and public awareness campaigns will be necessary to combat piracy effectively. Only by addressing the root causes of piracy—such as high costs, accessibility issues, and lack of awareness—can the Indian entertainment industry hope to recover from the significant financial losses it has suffered.