Digitise, dude!

The $4 billion industry is bleeding, but help could be at hand.

If India churns out 1,000-odd Hindi films a year, and Hollywood makes a fifth that number, it stands to reason that the Indian film industry should make much more money than its more glamorous counterpart. Simple maths?

Apparently not, for recent research indicates that while Bollywood takes home $1.2 billion annually, Hollywood earns a whopping $51 billion.

While the difference in revenues can be partly explained by the price disparity in movie tickets between India and the rest of the world, the primarily reason, it would appear, is piracy. In India, no sooner than a movie is in the theatres, pirated CDs and DVDs are simultaneously available in the market.

Even as the Rs 4 billion Indian entertainment industry loses close to 50 per cent of its revenues, and the music industry, in particular, stands on the threshold of being virtually wiped out thanks to the menace of piracy, concerned organisations like the Producers' Guild and the Indian Music Industry (an active consortium of 100 music companies) have called an all-out war against the pirates.

"What is needed is government intervention in terms of stringent implementation of laws and speedy prosecution by the judiciary through fast track courts," says Rajtilak, vice-president of the Producers' Guild.

Unfortunately, the film industry is neither structured nor corporatised, so the stakes are not high enough for individual producers and content owners who seldom realise what they could be losing, points out Rajtilak.

The music industry, the worst affected by piracy, courtesy MP3, "is left with no money to plough back into the business," concedes Vijay Lazarus, president, IMI.

"There's no creativity, no new productions, no new artistes or new content because there's no surplus in our bottomlines," he says.

It's in this background that companies offering content protection solutions are tapping the Indian market to educate content aggregators and owners in the entertainment industry about multiple release windows in a bid to increase their revenues.

International software solution providers like Nagra Vision, NDS and Irdeto have been tying up with broadcasters and content providers promising not just content protection but multiple ways to extend their revenue earnings.

And the solution might well lie in digitalisation of content. Digital cinema encompasses the production, delivery and projection of full-length motion pictures, trailers, advertisements and other audiovisuals into "cinema quality" programmes to theatres using digital technology.

"When you are able to simultaneously release a film across 300 towns thanks to digitalisation, you obviously nip the possibility of leakage when film rolls are physically transferred to distant towns," explains Rahul Nehra, country manager, Irdeto, a global player in content security.

With provisions like encryption of content, conditional access and digital rights management, Irdeto claims to offer the way forward to content owners and broadcasters. The revenue module: besides conventional sources, you earn pay per view, IPTV and mobile TV. How about that?

How the numbers stack up

The size of the Indian entertainment industry is $4 billion with a piracy level of $2 billion

The current annual revenues from Bollywood are $1.2 billion, a major proportion of it from the 3.6 billion movie ticket sales

Hollywood sells 2.6 billion tickets annually, raising about $9 billion from a total revenue of $51 billion generated through rentals, sales, PPV, pay television and free to air television rights

The music industry loses close to Rs 600 crore (or 50 per cent of its total turnover of Rs 1,200 crore) to piracy

IMI's anti-piracy teams concluded 2005 by pulling off on an average five raids a day, preventing pirated goods worth Rs 720 million from flowing into the market, and confiscated potential pirated music worth Rs 530 million by seizing over 1,000 CD writers