by Nirmal John
One of the many challenges standing between him and these targets was piracy. Music was re-recorded on cheap tapes and sold on the streets at a considerably cheaper price than the price at which music companies sold them. It was an era when anti-piracy operations were rare. Akella recalls, ‘The enforcement was not strong and even when those who were selling got arrested, their trial would take forever and they would come back to the same business. There was no fear of the law.’
Because of the nature of this contract, Akella felt that if he didn’t do something out of the box to neutralize piracy, he would end up losing money. The young Akella went over to Gujarati Galli, a popular market in Hyderabad that was at the centre of pirated cassette operations at that time. It was not known as a friendly neighbourhood, particularly for those who were seen to be part of the establishment.
Driven by the impetuosity of youth, Akella walked in to meet some of the pirates who operated there. He tried to negotiate with them: ‘I told them I had just bought this title called Gang Leader, which was a Chiranjeevi movie. I told them that I was in a situation where I had to meet certain sales targets, and could see how piracy would eat into my sales. So I wanted them to support me.’
‘But we don’t do piracy,’ was the defensive reply.
Akella persisted, ‘I just need some commitment. I need your support in terms of selling at least 5,000 tapes. We have invested huge amounts of money in this film and if we lose money, we will have to shut down. If that happens because of any of you guys, we won’t be kind to you. We will make sure that you also shut shop along with us. This I promise you.’
It was ballsy, but Akella had done his homework and figured the top pirates of the area and how the logistics of the entire piracy chain worked. The threat, Akella says, did the trick. He struck a deal with five of the pirates of Gujarati Gulli to sell legitimate cassettes of Gang Leader. ‘It wasn’t exactly a well thought out strategy,’ he recollects, ‘but I just had to do it for survival. There was no other choice.’
As it happened, Gang Leader became one of the all-time hits of the Telugu movie industry. The music did brilliantly too, with Akella selling as many as 12 lakh cassettes. His relationship with the pirates didn’t last, but gave him valuable insights into how they operated.
Akella remained with Lahiri Music Company for a few more years before opening a label of his own. He did well initially but couldn’t survive a few flops. By the turn of the millennium, the business of peddling cassettes in India had peaked and passed. Digitization was making all the noise in the music and home video business, and the shift to CDs and then DVDs was on.
In the late 1990s, he took a swing at the latter and started a home video business. During his travels, he had noticed that a large number of Telugu-speaking engineers had moved to the United States. There was an unusually high demand in the country for Indian engineers to solve the Y2K problem that affected software at the time—dates recorded on computers weren’t designed to change from 1999 to 2000 at the end of that year.
Along with food habits, entertainment is one of the things that travel well with expat techies. In their foreign environs, it reminded them fondly of their homeland. There was demand for entertainment that they had grown up with, and Akella, sensing an opportunity here, launched his own label of Telugu home DVDs.
He acquired a sizeable number of titles from the preceding decades and built up a movie library. This was not an easy enterprise. Producers through the seventies, eighties and nineties, hadn’t exactly invested in preserving the prints of their movies. Back then, the monetarily relevant shelf life of a movie was limited to its theatre run. The occasional telecast on television came as an option later, but that was all. The home VHS market was in its infancy. The lack of return on investments in preserving the prints meant that they were often left to rot.
Even when he managed to source the prints, it was not a given that they would be of the quality required to render well on to a DVD. There were also plenty of cases where different reels of a film were each of a different quality, and Akella and his team had to go up and down the state to find quality prints. It was hard work.
In some cases, Akella and his team even took the pains to translate the movies. The 1970s mythological film Sampoorna Ramayanam was translated into languages like Spanish and Japanese to take advantage of the multiple languages option that the DVD format provided; this was done to make the content accessible to a wider audience. These painfully sourced movies were released first with much fanfare in the United States, which at that point was ahead of India in adopting the DVD standard.
The angst in Akella’s voice is palpable when he recalls what happened after the launch. ‘We found copies of it floating in the United States. It was terrible. I had worked so hard on the entire restoration process. We could not let this happen, we thought. I felt so mad when someone stole it. It was making us bleed.’ Once again, Akella decided he had to put up a fight, this time in the United States.
With his experience in sniffing out and neutralizing wholesalers of pirated music, he decided to go after the source rather than after the individuals selling these DVDs. Akella and his team set up offices in New York and San Jose to investigate the piracy value chain. With help from informers, they found out that the pirated DVDs came from a facility in Chicago from where they were shipped throughout the country.
Armed with the evidence, Akella went to the police, requesting them to conduct a raid. As is the procedure mandated by law in the United States, he also hired an attorney on a retainer. The raid was successful and Akella managed to slow the spread of pirated copies of his DVDs. But the victory came at a substantial cost. In the high-cost litigation environment of the United States, that single raid ended up costing him a massive $160,000. That pinched.
The entire experience laid bare to him the need for piracy to be fought through industry-level institutions rather than in an ad-hoc manner by individual producers. For one, individuals would not have the funds to keep a sustained fight going, and for another, it was a problem that affected the entire industry.
Akella came back to Hyderabad and started meeting producers. He told them about his experience in the US and explained why he thought it was time to take steps together. Most of those he met were in agreement with him, in principle. But to create a formal operation out of this consensus took a few more years.
Blame that delay on the fragmented nature of the movie industry. Producers have often been accused of not being interested in sustained funding to fight industry-wide piracy and of preferring to fight piracy only when they have films to release. The historical lack of a studio system meant it was every producer for himself. This struggle has been even more pronounced in the largest film industry in the country—the Hindi film industry.
A rare joint effort called AACT or the Alliance Against Copyright Theft petered out after its launch with much fanfare in 2009. For AACT to be effective, industry insiders estimated minimum annual commitments of Rs 40 lakh to Rs 50 lakh each from major production houses, with smaller amounts coming from independent producers. That was chump change for the bigger production houses that routinely spent at least ten to twenty times the amount to promote a single movie. However, producers didn’t see the point of paying an annual fee if they did not have movies lined up for the year.
Add to that the point of view of many voices saying that losses due to piracy did not materially affect fortunes since, unlike in the US, movies in India did not have a long tail. The home video market in the US is a significant money spinner long after a movie release, whereas in India, the release window is everything. This reduced the incentive for producers to invest in a sustained effort to fight piracy.
In Hyderabad, Akella persisted in his efforts to bring the Telugu industry together. In 2005, it became one of the earliest in India to move past challenges and put forward a unified front against piracy. That year, a dedicated anti-video piracy cell was set up as part of the AP Film Chamber of Commerce.
It was under that banner that Akella, along with the industry, organized the resistance and the fight against piracy over the next few years. This cell, working in tandem with the police, registered 1,334 cases in eight months, from May to December 2005, a pretty impressive number.
The efforts were initially aimed at combating physical piracy. It later included teams of youngsters trawling the Internet for links to content that the Telugu industry created. Takedown notices were sent to those who uploaded the files or linked to them on their website. The instance mentioned in the Der-Yeghiayan affidavit was one such effort to zero in on those who were uploading the files.
Compared with the Indian film industry, Hollywood has for long been aware of the need for a united front to fight the theft of content. The Motion Picture Association of America dates back to the 1920s; it was set up to fight censorship and has over the years morphed into the platform for Hollywood to take the fight to the pirates. 20th Century Fox, Paramount Pictures, Sony Pictures Entertainment, Universal Studios, Walt Disney Studios and Warner Bros. Entertainment constitute its member studios.
Motion Picture Distributors Association (MPDA), based in Mumbai, is the local office of the Motion Picture Association and ‘represents the interests of the American motion picture industry in India’. Doing this became increasingly important as India steadily emerged as an important market for Hollywood studios.
According to KPMG, Hollywood film revenues in India grew at about 10 per cent in 2016, driven by dubbed versions.13 While the report did not talk about the total revenue generated in India by these films, it did indicate that the top ten Hollywood movies made $108.8 million in 2016 in India, increasing from $99.5 million the year before.
As India’s appetite for Hollywood content and its importance as a source of revenue grew, so did piracy. Knowing it needed the support of the local industry to put up a fight against theft of content, the MPDA looked around for partners and found a willing hand in Akella.
In 2012, the anti-video piracy cell that Akella had set up signed an agreement with the Motion Picture Distributors Association for ‘knowledge sharing, adopting best practices and jointly tackling issues such as camcording, online theft, in addition to promoting public awareness and educational campaigns on the importance of content protection’.
That collaboration gave Akella renewed energy, and in 2013 an app was developed—iMovieCop—as a platform to connect and distribute information and to educate the ecosystem fighting theft and infringement of content and copyright. According to him, the app has been used to train more than 7,000 people who work in movie halls to detect and deter camcording.
Perhaps the biggest initiative of which Akella has been a part is the Telangana Intellectual Property Crime Unit. In 2016, Akella helped set up TIPCU, a collaborative body that brings together the government and law enforcement to fight intellectual property theft and piracy. Housed under the cybercrime wing of the Criminal Investigation Department (CID), it is the first state-level IP enforcement agency in the country. It is modelled on City of London Police’s Police Intellectual Property Crime Unit (PIPCU), which calls itself a ‘specialist national police unit dedicated to protecting the UK industries that produce legitimate, high quality, physical goods and online and digital content from intellectual property crime’.
Akella is a great believer in using technology in this fight and is working on a tech platform that can bring IP holders and law enforcement together across the world. If he succeeds, it could dramatically bring down piracy by making cross-border collaboration easier.
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Are all these efforts leading to a substantial decrease in piracy? Will increased collaboration resulting in the biggest names in this shadowy business being taken down be enough of a deterrent? Will the slow squeezing of monetization options render piracy no longer lucrative to make money for crime syndicates? Could the emergence of legal streaming all over the world be the final nail in the coffin for them?
There are early signs that we have entered an era of the slow death of movie piracy. There used to be a time not so long ago when the chatter on new movies in Internet-savvy circles was followed by inquiries if anyone had downloaded the torrent. Now the questions are often about whether it is up on Netflix or Hotstar. According to Nitesh Kripalani, director and country head, Amazon Prime Video India, digital piracy in India has declined by an estimated 40 per cent over 2016.
That sounds high, but there is clearly still some way to go.
It is well known that India houses the largest movie industry in the world in terms of the number of releases. That number has been nudging 2,000 annually over the last few years. The industry makes about Rs 142.3 billion annually, this number growing at an annualized rate of 3 per cent. According to estimates by the consulting firm KPMG, this number is expected to touch Rs 206.6 billion by 2021, growing at an annualized rate of more than 7 per cent.
According to KPMG, piracy has continued to be a drag for the industry, which claims substantial loss of revenues on account of it, to the tune of around Rs 180 billion every year and a resultant loss of 60,000 jobs every year. There is no way to independently confirm these numbers. It is difficult to quantify the losses arising from piracy with any degree of certainty because of various reasons—one being that there is no guarantee that those who watched a pirated movie would have otherwise paid for watching it at the cinema.
The KPMG numbers on piracy may seem like a gross over-estimation, but there is no doubt that content creators and IP holders aren’t getting what they could have otherwise made. Simply put, the movie industry in India is not making the most of its content and it’s not making as much money as it could while satiating the hunger of millions of people for content.
Of course, the underperformance of the Indian film industry cannot be entirely put down to piracy. The multiplex revolution and the conversion of single-screen movie halls has excluded large swathes of the population from enjoying movies at the theatre without emptying out their pockets. Multiplex ticket prices are several times the cost of a cinema seat in the traditional egalitarian movie halls.
Then there is the reality that there are just not enough screens to maximize revenues. As a Forbes India report from 2017 points out: ‘The screen-to-population ratio in India is abysmal when compared to other countries. India has just 6.5 screens per 1 million people. In comparison, China has 23, Spain has 84 while the US has 123 screens for 1 million people.’ This infrastructure needs to be built for the many who are hungry for content and who, in the absence of legal and affordable access to it, are reaching out for pirated IP.
There is also the larger fight, which is to change public opinion that is not always with the movie makers. Oftentimes, the response from those on the street to the arrest of people involved in movie piracy is to point the finger at the filmmaker and ask this pertinent question: ‘You guys too steal stories from other movies without paying royalty.’ Akella remembers how one local newspaper had covered the announcement of the partnership between the Telugu Film Industry and the Motion Picture Distributors Association. ‘They had written that from now on we would be going after all the filmmakers who were stealing Hollywood scripts,’ he chuckles. The reality is that as long as the shadow of copying content without attribution hangs over the industry, it is difficult to convince people that content creators are the good guys here.
The fight against theft of entertainment content cannot be won with one raid or by capturing the crime bosses. It has to be combined with creating content that people deem worthy of their hard-earned money as well as by providing them options to watch it in today’s anywhere, any-screen world. That would be the real victory.
CHAPTER 4
BANKING ON DATA
Indian Banking System Invests Crores in Cybersecurity; More Is to Be Done
Atul Gupta had a flight to Mumbai the next morning and was trying to sleep earlier than usual. It was a pleasant Saturday autumn night in the national capital re
gion. He had almost drifted off when his phone vibrated. The hazy blue light of the display filled the darkness of his bedroom. It was the short, snappy buzz that indicated a text message. Gupta contemplated whether he should break his sleep to take a quick glance at the phone.
It is difficult for most folk to resist the temptation to sneak a peek at their phone once it starts buzzing. A ringing phone has to be answered, doesn’t it? The arrival of a notification means something is happening, that somebody is reaching out. Gupta took the phone and unlocked it. It was one of those transaction alert messages from his bank. He clicked on it to open the text. Money had been debited from his account for some transaction made through his debit card. He wondered which transaction this was. Then he remembered having used his card earlier in the evening. Maybe the alert for that transaction was being re-sent because of some technical glitch, or so he thought.
That theory went out the window soon enough. The phone buzzed with a second message, and not too long afterwards, with a third. Every few minutes there was a transaction alert from the bank. This was no technical glitch in the bank’s notification system. There was something afoot. This certainly wasn’t him withdrawing money. Someone was stealing money from his account.
Gupta was wide awake now and more than a bit concerned. He quickly dialled the bank’s customer care number and had a chat with an executive about the messages and the transactions that were apparently happening on his account through his debit card. The woman on the line told him that the bank’s systems had already raised a red flag because of the frequency of the transactions and the unusual locations they were happening from, and had blocked the card temporarily.