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Going Legit

With the digital universe being the destination of the future, here’s a new initiative to thwart online pirates and encourage content owners to spot a potential goldmine in this new-age platform. Find out more from Frank Rittman, SVP, Deputy MD, MPA, APAC; Uday Singh, MD, Motion Picture Distributors Association (MPDA), India; Mukesh Bhatt, President, Film & Television Producers Guild of India (FTPGI); and Kulmeet Makkar, CEO, FTPGI in conversation with team Box Office India

Box Office India (BOI): What exactly is this initiative by the Producers’ Guild and the MPA?

Uday Singh (US): The Film and Television Producers Guild of India in association with the Motion Picture Dist Association, India, is proud to announce a new website that will serve as a resource to online audiences, to access movies and television shows legally. As part of the industry, it is our responsibility to educate online audiences about the legal options they have, supported by a copyright system which will help sustain creative industries and encourage innovation and legitimate business models in future.

We are seeing an increase in media fragmentation today, enabled by a multi-platform environment featuring computers, smart phones, tablets and the growth of Internet penetration in the country. At the same time, consumers have become platform-agnostic in their digital media consumption and there is a growing demand for content. Movies continue to remain the top content choice.

BOI: What is the URL of this new website?

US: It’s www.findanymovie.in

BOI: So, essentially, a consumer can log on to the site and check if a website is legit or not.

Frank Ritman (FR): The consumer will be directed to a legitimate site when they want to watch content online.

US: The Indian market is at a tipping point for online businesses to provide a multitude of options to consumers. During 2012-2013, the online video audience grew by an astounding 27 per cent dominated by Bollywood. Content owners and distributors are constantly looking for new options and technologies that will cater to the growing demand of a young population (75 per cent under the age of 35). Today, there are multiple legitimate options available to consumers to access their favourite films on the go.

BOI: What made the Guild and MPA partner with each other?

Mukesh Bhatt (MB): We are content providers and, globally, content is getting more and more expensive. The only way we can fight this kind of inflation is by tapping revenues. A couple of months ago, when the UPA government was in power, I had met the then Prime Minister Mr Manmohan Singh and I told him that, when I drive to work every morning, I get this sick feeling that I am going to work to earn for pirates rather than for myself. Dr Manmohan Singh immediately felt my pain. There is no question that the Internet is the way forward for our industry. Yes, pirated DVDs and VCDs are definitely swallowing a large part of our revenue but it is only a matter of time before that business wanes and digital takes over. So the Internet is the way forward and we can monetise on that platform. Who is on the net? It’s youngsters. India is a young country and more than 50 per cent Indians are less than 30 years old. This is the audience which goes to the movies and looks for entertainment. We need to help them differentiate a legitimate site from a pirated one. This initiative is a landmark for Hindi cinema and I am sure it will make a huge difference.

BOI: Why not take this to its logical conclusion and actually put content on the site itself rather than redirect consumers to legitimate sites?

US: Well, this is a start. The idea is to build partners along the way. First, we need to fill the missing gap of a website that leads consumers to legitimate sites. The idea is to educate and inform the consumer first. And of course we plan to partner with more and more content providers.

We are looking at partnering with Netflix, one of the biggest online content providers. Broadcasters too are gaining a lot of traction on their websites. This is currently happening with the FIFA World Cup, where there was a John Doe order this morning on 200-odd websites showing the football matches illegally. The online culture in the country is evolving and I think Steve Jobs has shown us how there is no stopping good content.

We have to show people that they have an option that allows them to buy legitimately. They can either pay or reach the content via an advertisement-led channel. We see more convenient options developing in future.

BOI: Don’t you think it also becomes imperative for service providers like mobile operators and broadband owners to start throwing up these sites as the first options on the search pages?

US: Yes, absolutely. As service providers, it is important that they become part of this initiative. Right now, Internet speeds are quite slow. So consumers snack for content on their mobile phones. We will have to become more aggressive when consumers start watching full-length movies online.

BOI: There is no denying that online piracy is rampant. A simple Google the throws up numerous options to watch pirated films online.

Kulmeet Makkar (KM): I came across some very interesting data, and since you deal with box office numbers, you will find it very interesting. The challenge we have seen in terms of the growth of the industry was the gap between the release of content and its availability. It is very important for us to bridge that gap. Today, the industry is very small, but we still produce the largest number of films per year. People are swayed by box-office numbers of Rs 100 crore. But that `Rs 100 crore boils down to a 1.5-crore-strong audience in the country. That 1.5 crore when compared to a 125-crore populated country is virtually nothing. I know for a fact that if we take a film like Queen, seven of 10 people have watched it. But how many have paid to watch it?

Through this initiative, we are trying to support legitimate sites. As Uday said, right now, we are going after the pirates. How about people who are legitimate players? I think this initiative will help content get certified as genuine.

BOI: Indian consumers have a tendency to want free content online. With this site directing consumers to legitimate, pay sites, will audience habits also change?

KM: At this point, I cannot answer that. But, I am sure, going forward, the industry will have to graduate to a model where the consumer pays. Allowing viewers to watch content for free is very harmful for the industry. It also puts pressure on every other stream. When you can watch a movie free and then compare it to paying for a ticket in a cinema hall, you are bound to find the latter expensive.

BOI: Consumers know that, for instance, Mukeshji’s Aashiqui 2 earned around Rs 90 crore. The perception is that films is a rich man’s business. Therefore, they reason that a few movie downloads won’t make a difference. How do you counter that reasoning?

MB: The point is one should get what is one’s legitimate right. Just because you notched up some big numbers doesn’t mean content should be free. Moreover, these so-called ‘big numbers’ are actually not big numbers because the potential is much greater.

BOI: Due to piracy?

MB: And the ratio is humongous. Of every 10 people who watch my film, eight people watch my film illegally and only two pay for it. Can you imagine the extent of revenue loss? We need to tap into that.

KM: Our production houses don’t understand the losses they sustain because they are not aware of it. We need to educate the industry first. The loss is not just 30 per cent of business; it is 10 times more than what you earn. We will begin with educational awareness and then we can make consumers aware.

US: Steve Jobs once said, ‘If you steal my content, how will I plough back money to create more jobs and content? It’s the essence of my creativity.’ But we are to blame. We only watch the numbers we make, never the numbers we lose. As a result, most of us focus on how much we make; we never think, ‘Oh! what would the numbers be if we had captured some more revenue?’

KM: We are all painfully aware that India is a heavily under-screened market. There are probably 4,500 screens available to us, which we share with Hollywood and regional films. If I am a producer and I make a film without a big star and it thus doesn’t have a huge pull factor, how do I monetise on it? I have limited screen availability because there aren’t enough screens available because the bigger films take 3,000-4,000 screens. Secondly, when I go to satellite channels, they say they cannot broadcast all the films that exist; they only buy films that add to their TRPs and GRPs. So, as a producer, what options am I left with? I think we all have to look for alternative mediums to reach the consumer. And the Internet is the future, whether it’s free or whether the content provider makes money out of it. We need to build a bridge between content providers and consumers.

US: In 1998, there was a huge issue between multiplexes/theatres and producers and, at that time, one of the presidents of the association said, ‘What do we do? We make films for screens?’ At that time, Yashji said, ‘Tomorrow, if my films can be shown on mobile phones, I will make movies for that.’ Imagine thinking of something like that back then.

BOI: Apart from online piracy the second biggest problem we face is DVDs being available everywhere, and one can watch four to five films on one DVD for only Rs 100.

KM: The problem is when the room is flooding, we switch off the fan and then suddenly realise that we are sinking. In other words, we suddenly realize we have 6,000 legal cases pending. Consider this… Street vendors of illegal DVDs are jailed but are back at the street corner two days later, only to start selling DVDs again. It takes forever to get a court verdict. So we started going after wholesalers of these DVDs. We thought this was the source of illegal copies. After catching them, we realised we were still nowhere near the source. Then we realised 90 per cent of these films were being illegally filmed in cinema halls. We then conducted campaigns and started educating exhibitors on safety, especially in small towns. And today the threat of the Internet is more than a physical threat. So we started focusing more on the sources and started seeing the many options they had to copy content illegally. Last year, in Surat and Indore, we nabbed two guys who belonged to ‘release’ groups. Just like we have distributors in our industry, they have ‘release’ groups.

BOI: Is that an organised set-up?

KM: Yes, it’s very organised. These were prime syndicate operators. We thought we had caught some really sharp geeks but they were high-school dropouts. They did a lot of damage with Samsung phones and some very basic equipment. And the links were up on 23,000 sites that they were dealing with. India is ranked highest in the world on piracy because these guys are exporting illegal content to 32 other countries. And the police… when we went to nab these two guys, they had no idea how this operation worked because these were online transactions. These guys were then let out on bail and they most likely haven’t stopped doing what they were doing before they were caught.

We noticed that after we caught these two guys, there was a 36-per cent drop in this type of piracy. Once the message goes out through two to two three guys from the same group, they lie low for a while. The three most notorious belts are Ghaziabad, Ahmadabad and Indore. The moment we started educating cinema owners and their managements – we did a quiz with 30-40 multiplex managers – awareness started spreading. So these guys started moving to the interiors and it will be even tougher to reach them.

It’s a long process and will take time. So we started looking at other options like blocking online sites. Here too there is so little awareness. Take the ads on websites, for instance. Advertisers are often not even aware of where their ads are being displayed. For example, it could be a children’s film but they are promoting adult content. When you go through the ecosystem of the digital universe, you have no idea where your brand is being advertised. That’s why we have intermediate strategies that we plan to roll out and educate advertisers, to help them see what is happening to their brands. We want to show them that their content is being advertised in the wrong places. It is a lengthy process.

BOI: Since the stars have mass appeal, shouldn’t they be promoting this initiative?

US: So far, we have shot with 30 stars… all the big A-list stars.

KM: We have recorded messages from the stars. It is not difficult because they support us since they belong to the same industry.

BOI: Today, our industry is ruled by corporate firms. Are they on board too?

KM: Most of these sites belong to corporate houses. We have Eros, Reliance, Times and Zee… All their sites are a part of this initiative.

MB: Between MPA and the Guild, we have all the industry members who matter. Now it’s up to decide how to include them in our campaign. We need to make them understand the seriousness of piracy.

US: Also, when you start building momentum and speak in one voice, then even digital platforms will realise that they need to stop piracy by endorsing only legitimate sites.

BOI: How many sites are involved in this initiative?

US: We have a library of 4,000 to 5,000 films across six sites, and within a month, you will see applications of these sites which are available on mobiles. We are looking at a universe of at least 15 to 20 more but right now we are supported by the big six and that is going to expand. It is a scale-up model, so it will happen probably in Tamil and Telugu. The web space is beautiful as you can reach out to anyone.

KM: It was very easy to get everyone on board. But before having them on board, we wanted confirmation from them in writing that they would not indulge in piracy. So based on their declaration, we included them in our campaign because they should be responsible not to support piracy.

BOI: So right now, we are assuming that the priority would be to make people aware of this URL.

KM: Yes, and especially for the industry to know about this as content owners should know whether they are giving their content to legitimate sites. The consumer launch will take some more time. With the help of the guild, we will involve the stars. That is why we are here at the Box Office India office.

US: The next step will be actors speaking about it, which will go electronic and more audiovisual. And after this, every platform will support this initiative and even involve it in their marketing plan, when they promote their films.

KM: And as a responsible trade partner, I am sure Box Office India will not stop supporting this initiative after one issue of the magazine. You could publish more interviews on the subject and have a link on your website that could direct users to this website.

BOI: Would you like to mention any other highlights about this initiative?

US: As producers, I am sure all of us are very sensitive about the opening weekend but for these players, after the movie is released and it actually goes on their websites, it is very important to combat piracy. It is very important to protect the content and having it on their platform is very important.

KM: We can’t shut our eyes and say technology is the future. Moving forward, the digital platform will be the single-most important medium. So we need to wake up and understand the loss caused by free content. If the industry doesn’t understand and support initiatives including this one, I think we will be in big trouble. We need to take another look at our revenues and we cannot be dependent on theatrical contributions of 70 to 80 per cent. We need to have alternative platforms.

US: India has never had the luxury of having a DVD market. DVDs are never really contributors to our profits as we have never really had a big DVD release in India. So migration to the Internet is quicker here as the young audience is growing. We have more people going online and watching our content illegally than they would do on DVDs. As revenues online start climbing with the subscription model, we will be able to track the numbers and the process will become more and more efficient.

BOI: From a global perspective, is India unique or are film industries elsewhere facing the same problems?

FR: The world is getting smaller. I think everyone faces the same problem of putting the genie back in the bottle.

MB: The only difference I can see, and correct me if I am wrong, is that in many other countries, they recognise their film industries as major contributors to their economies. Unfortunately, in India, governments in the past have probably not understood the potential of this industry. This initiative of a legitimate revenue model will also add to employment. In the US, the First Lady, Michelle Obama, gives way the Best Actor or Best Film award at the Oscars but I don’t see something like that happening in India.

BOI: Now that the HRD Ministry is headed by a minister who has been part of the entertainment industry (Smriti Irani), do you think that will facilitate positive change, given that copyright falls under this Ministry?

MB: I see so many MPs from the film industry in Parliament. We have already written to them and urged them to come on board and work with us to grow our industry. We are not discussing issues with the government right now. All we are saying is that you are talking about development and growth and we want to be part of that. Let’s grow the number of screens, let’s grow consumer awareness, and let’s reduce piracy because that kind of partnering is the need of the hour. Look at how the number of screens has increased in China in the last five years alone. The revenue they earn is pumped back into the industry. For instance, the 5 per cent entertainment tax goes back into the industry. According to their laws, entertainment tax has to go back to the industry; it cannot be used anywhere else.

BOI: Mukeshji, you have fought for many issues over the years. How sensitive is our government when it comes to issues that plague the industry?

MB: Unfortunately, they consider us clowns in a circus – not entertainers but clowns. They never take us seriously. That’s the sad part and it’s been that way since Independence. I am talking purely about our past governments. The NDA government, during its last stint, gave our industry recognition. So I am optimistic because the person in charge the PMO is very progressive and he walks the talk. Ache din ayenge.

I must also mention the change we are experiencing thanks to the work our industry has put in. We are able to change perceptions of even state governments. Maharashtra now looks at us differently than they did a year back. Our interaction with the right people in the ministry has improved shooting issues in Maharashtra as we had a problem with permissions. We need to open more cinemas and rationalise taxes. There is a constructive dialogue underway and they have, in fact, given major relief to the industry by exempting VAT on retrospective years, ie, 2009 to 2011. It took seven years to happen but it finally happened.


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