Entertainment industry loses Rs 22,400 cr due to piracy in 2023: EY-IAMAI

The Indian entertainment industry suffered a staggering loss of Rs 22,400 crore in 2023 due to piracy, according to a report released on Wednesday, that advocated for stronger regulations and collaborative efforts to effectively mitigate piracy risks.

According to "The Rob Report" by EY and the Internet and Mobile Association of India (IAMAI), 51 per cent of media consumers in India access content from pirated sources, with streaming services being the most significant contributor at 63 per cent.

"The size of India's piracy economy was Rs 22,400 crore in 2023, ranking fourth against the segment-wise revenue generated by India's Media and Entertainment industry.

 

"Of this, Rs 13,700 crore was generated from pirated content from movie theatres while Rs 8,700 crore was generated from OTT platforms' content. The potential GST losses of up to Rs 4,300 crore were estimated to have been incurred," it said.

Piracy refers to the unauthorized copying, distribution, or use of copyrighted material, which can include music, movies, software, and other forms of intellectual property. It is considered a form of theft because it infringes on the rights of the original creators and can lead to significant financial losses for them.

Rohit Jain, Chairman of IAMAI's Digital Entertainment Committee, emphasised the urgent need for collective action among stakeholders.

"The rapid growth of digital entertainment in India is undeniable, with filmed entertainment expected to reach Rs 14,600 crore by 2026. 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," he said.

Viewers cited high subscription fees, the unavailability of desired content, and the hassle of managing multiple subscriptions as primary reasons for indulging in pirated content.

The report said that piracy is particularly prevalent among younger audiences aged 19 to 34, with women favouring OTT shows, while men gravitate towards classic films.

Interestingly, 64 per cent of those who access pirated content expressed willingness to switch to authorised channels if offered for free, despite advertisement interruptions, revealing the need for content providers to rethink their pricing models and accessibility strategies. Around 70 per cent of pirated content consumers claimed that they did not wish to purchase any OTT subscriptions, the report said.

Mukul Shrivastava, Partner and Forensic M&E Leader, EY Forensic and Integrity Services, pointed out that existing measures against piracy have been insufficient, and advocated for stronger regulations and collaborative efforts across the industry to effectively mitigate piracy risks.

"Leveraging technology to combat the creation and distribution of pirated content will also be critical. This will ensure that original creators are able to protect their intellectual property and monetize what is rightfully theirs," Shrivastava said.

The report also revealed that piracy is more prevalent in Tier II cities compared to Tier I cities.

"Limited means of watching authorised content, easy access to pirated content, a lack of awareness about the perils of piracy, income disparity and inaccessible theatres are some of the reasons for this contrast. Tier I users typically access pirated content to watch old films while those from Tier II cities watch illegitimate versions of recently launched films, once again showcasing the unwillingness to pay for tickets," it said.