Piracy, China and Hollywood

So Hollywood and therefore the US is up in arms against Piracy of Hollywood movies in China, saying they are losing billions of dollars in revenue. What a white faced lie ! The fact is that 80% of the people that buy pirated copies of movies in China can either can not get to the theatres or just cannot afford either the ticket price, nor the price a fully priced DVD as per the US standard. They would just not see the film …


.. so I have no idea where this ‘billions of dollars’ in lost revenue comes form. It is just a fantasy figure cooked up. I have sat in enough meeting at varios forums where the moan of the West is Piracy in the East. What they don’t say is that Piracy is actually casting the net for our product far far wider than the normally structered and legal chanells would have allowed.
Hey … Indian films face the greatest Piracy problems, but the box office keeps going up. The pirated films are even played on regulr Cable channels beamed straight into your TV set.
Lets get this straight. The Pirates work on ground level and know how to get the product to the consumer at the price they want it, where they want it, and how they want it. Hollywood better get off it’s high horse and learn, just as the music bussiness learnt from Napster.
Had it not been for the chaos created by Napster ; Itunes, and DRM etc would not have been born. The music bussiness based on sale of DVD albums at jacked up prices would have collapsed.
Shekhar

24 Responses to “Piracy, China and Hollywood”

  1. sagnik says:

    Talking ’bout Piracy in general I will say that if managed properly it can actually elevate the artist to the next stage of his career.No one knew about Russel Peters until a dvd rip of his video “Outsourced” emerged in the net.
    Face it …. piracy is never going to end!!!! What we need to do or more accurately what the artist, his manager, his PR agent and all the other fancy names need to do is make better marketing strategies !!! Atleast thats what the public sector companies did in India when the private sector encroached upon their territory …. or atleast thats what I think !!!forgive my analogy

  2. Rudra says:

    Shekhar ,
    China is notorious for flouting all international norms on Intellectual Property. China is an insular , arrogant , incorrigible and dangerous singularity in a rapidly flattening world.
    Automotive , aerospace , semiconductor , electronics have been facing this intractible problem for almost 2 decades now ! – ever since 1978 when China first invited FDI.
    Piracy of Ideas is abhorable – since it deprives the individual or a business entity of its due credit – intellectually and economically !
    We in India still hurt to know how our Vedic Mathematics and Shulba Sutras were reverse engineered 2500 years ago by the macedonians and much later by the arabs – resulting in ‘pythogerus theorm’ , and ‘arabicc numerals’ – when even the arabs call their numeral system ‘ Al Hind’ – or from India.
    It is becomming increasingly difficult for most open Free Market Economies to deal with a Rogue China that wont institutionalise procedueres for Intelleectual Property protection.
    If i have a business why will i want to invest in China , employ its people , share ideas to seek collaboration in cheap maufacturing , when 2 years down the line , i will find a Chinese entity floating a similar product with a different name !
    This is cheating and it is time China and its un-accountable Communist system is taken to task by the international community !
    It is in the larger interest of all free nations and economies !!

  3. Hi Shekhar,
    Well the ground rule is simple, get the people who are involved in piracy into the value chain. Its like this, make the naughtiest kid in class the monitor and peace will prevail. Film/Music companies must make Original DVD’s / VCD’s available dirt cheap and get the local CD hawker to market it. Add a dollop of sales incentive + meeting the star of a film + visiting his shop and see the change in the attitude. Look at generating revenues from the DVD not just from the film sale but other avenues like include Trailors, Sponsers for film, new product samples, freebies etc. Barter. Package a DVD with a new film + classic.
    I am trying the above strategy with my film, but unfortunatley dont have the ‘S’ Factor in my film Sex, Stars & Songs. But am sure it will succeed with mainstream films 🙂
    My 2 cents.
    Cheers
    Mukund

  4. Pankaj says:

    Interesting point sir….The media companies any way spend millions on advertising. At least piracy gives them free advertisement apart from, as u rightly mention, access to otherwise unavailable markets. And I don’t think its east vs west. Its about those who can pay for the original and those who cant – be it in the east or the west. Best example is software industry. 90% of windows is pirated but it is the pirated users who have made it so famous that even the free & competent softwares like Linux are being made to struggle to make grounds. Get a ‘raid raj’ in place and I can bet Microsoft will be out of the market within 2 yrs. That is where apple is struggling even though they always had a much better product. – Mac os is almost impossible to pirate, so what if it is better than windows.

  5. eliyas says:

    you all have good point but arent we forgetting the Filmmaker’s Involved. All the Artist who have struggled many many years (Including shekhar)to make a living dont you think they deserve or have a right on their product or the Hollywood Studio who puts in millions of dollars to make a film dont you think they have a right to recover their money back. I mean Napster was giving songs for free Itune charges a dollar a song so they making more money that way.
    Let me ask you shekhar once the movie PAANI and Elizabeth II premiers would you be handing out DVD copies to the pirates or the poor in bombay?
    Well lets see.

  6. Pankaj says:

    Very right Eliyas. But none of us are saying piracy should be encouraged. I think all of us meant developing a revenue model for products such as films, music and software that keeps the interest of the developers as well as reaches a wider market( meaning those who cant pay for it). That probably is the only way to kill piracy, r8? My personal view is that nobody owns any work of art that is intangible. There can only be beneficiaries to it. Do share ur views.

  7. mahesh Kumar says:

    DVD piracy is here to stray simply because pirated DVD comprising of 4 to 5 films cost only Rs 100/- against Rs 500/- for an original 1 film DVD. As mentioned by Mr.Shekhar piracy actually provides more audience for the film in comparison to regular methods of film exhibition. In regard to ‘loosing billions’, Hollywood seem to be fooling itself. Except for few “block buster” films none of the other films get a release in China and India. The other films now are getting a light of the day and audience too through pirated DVD. Any way nobody is going to buy those films by paying Rs 500/- .
    If they are so worried about piracy let them cut down costs and compete the piracy market as MOSERBEAR is trying its hand in India by providing DVD for Rs 45/- and CD for Rs 35/- (Film Bajigar starring Shah Rukh Khan is already available for that cost).

  8. eliyas says:

    There is a diffrence in those who CAN’T pay any those who DON’T want to pay.
    yes there should be a revenuve model which reaches a large audience. But again we live in a world where every thing comes down to Money period, Talk is cheap, I think if you ask any filmmaker or a software developer he will want to protect his property as well as generate as much income from it as possible.

  9. ravi swami says:

    Films are often grossly over valued in the marketplace – the “going rate” has very little to do with the actual cost of production – you have to create a demand (& therefore a value) for a product for which there is actually no demand..
    Where Hollywood is concerned, the actual price of the film once it has been made, is set by the studios – this effectively becomes some kind of benchmark value, but it has actually no bearing on the cost of production, only their forecast based on recovering their production costs and turning in a profit.
    If you look at other forms of film making, like animation, the cost is a lot less than for live action since it is perceived (by the studios) to have less market value – it may cost a few million to make (say, a feature) but its market value is significantly smaller (sometimes ridiculously so, as far as the film maker is concerned…).
    If cost becomes a prohibiting factor to actually seeing films, then piracy will flourish, but the majors (eg Hollywood) are reluctant to drop the cost of their films, whether via exhibition or DVD sales since they (think, at least) that they control the market value of films.
    ..and the balancing act that Hollywood needs to perform is “can we risk people not seeing our films at all because they are too costly…?”

  10. mahesh Kumar says:

    Dear Mr.Eliyas, I agree with you from the perspective of the film maker.But as an audience why shouls I care about studio’s or Film maker’s income. I want to get it at the cost that is affordable to me. Its their business to secure their business. They should follow simple model lower the costs get more copies of original DVDs sold.
    I am from Andhra Pradesh(Telugu language)where cost of the theatre ticket is just 25-35 Rs and each of the hit film makes revenues up to 30 crores.Do you know its lot more than any Hindi film’s domestic market share? DVDs here cost anything between 175-250 Rs and piracy is minimum. Pirated films of Telugu are sold only in Delhi and Mumbai for very few telugu speaking audience. Its true of Tamil film indistry as well.
    Lets wish that,this common sense prevail on Hollywood.

  11. Pankaj says:

    Just one more point…if the piracy market is bigger (both in terms of numbers and volume) than the genuine market then u can be sure that there is something wrong with the pricing strategy or the delivery model itself. Its similar to the phone cost concept. In the last 5-10 yrs in India, calling cost has come down by 90 % but the telephone companies and their revenues have increased by 900% or more. U just cannot ignore the mass market and thats especially true for the film and music industry.

  12. Rinil says:

    Today’s Wall Street Journal published an article entitled “Threat for Big Media: Guerilla Video sites.” This article describes how these two men use two low end desktop computers to run a website that offers a host of American tv shows and movies free of charge on Youtvpic.com. However, unlike Youtube which stores videos on its own servers in the U.S., the guerilla sites offers menus of television shows that are stored on servers in places like France and China… They state that they are not breaking copyright laws because the contents are not stored in their computers in the U.S….
    Why don’t we just fix this mess by creating a completely new jurisdiction for stuff relating to the web and regard it as Cyberlaw with a universal set of copyright laws. I suggest that U.S. copyright law (Article 1 section 8 of the US constitution), Berne convention, and other worldwide treaties relating to copyright law should not pertain to web related materials. When fundamental concepts of copyright law are different from country to country, then how can we expect it all to coincide with shared materials on the web. For example, in the U.S., copyright exists for modicum of creativity. But in U.K, “sweat of the brow” concept applies in which Intellectual property rights are granted more on the basis of actually doing work rather than on creativity. There are many other principles of copyright law that conflict.
    We are fast moving into a world of media conglomeration. Although the lines that differentiate technology may become blurry, that doesn’t mean we cannot have consistent laws that supplement these changes in technology….

  13. eliyas says:

    Dear Mr Mahesh Have you ever tried to make a film? Try it, you will see what it takes to make a film and how you will worry about your movie being sold by pirates. I gurantee you will sleep on nails every night to secure your business (I am talking from an Independent Filmmakers POV who has no studio or Disturbutor backing them)
    and I do understand you want some thing cheap Ok, have you heard the saying “You get what you pay for” have you seen the Pirated DVD quality it is better not to see a movie :-)(I get them some times here to in NYC).
    In terms of revenue and low cost do you know “300” the movie made more then 201 million dollars so far and it cost 65 million dollars to make & was considered a low budget film do you think the filmmaker is worried about some one in tollywood to pay 35 rupess to see it.
    30 crores is considered a low to no budget in Hollywood film by the way and they spend that much or more just in PR to promote the film.
    In the end of the day you have to see which market we looking into before compareing.
    Oh about Hollywood getting some Common Sense, I think they know what they doing.
    There would be no Bollywood,Tollywood or any other wood for that matter,If there was no hollywood film Industry, so i think we should cut them some slack.
    Personally, I think If there is money to be made I assure you that they will get to the audience in every corner of the world even if it means to slash prices in competition with Pirated DVD they may not do it today they might do it in 10 or even 5 years but they will, brother they will.
    peace in all the wood lands.

  14. mahesh Kumar says:

    Dear Mr.Eliyas, even in my earlier comments I did say that, I agree with you from film maker’s perspective. My point is only to look at it from audience (pirated DVD buyer’s) perspective. I am a Documentary film maker and I empathies with your ‘heart felt’ response.
    In regard to your impression of Hollywood being very attentive to its market, I disagree with you. It took almost 30 years for Hollywood to realize the potential of Indian and Chinese market and their struggle (might continue for next 10 years) still on to maximize it. The 30 crore revenue I talked is of a film produced with the budget of 3 crores. So, my point is still valid. Even if Hollywood vanishes tomorrow, India (Bollywood, Tollywood, Kollywood) will continue to make films. Don’t worry about it.
    I am sorry about the pirated DVD quality in NYC. You must buy Indian versions of the same. They not only ensure quality but also offer additional features like Hindi language version of the film.

  15. eliyas says:

    Dear Mr Mahesh, I got your point but i think you missed mine.
    If hollywood vanishes what will the Indian film Industry survive on, cause 90% of the films coming out of India are remakes or copies of hollywood films. every Filmmaker and Actor not only in India but around the world dreams of winning an Oscar(Including me and i am taking the liberty to assume you to for your documentry)Why is that, have you thought about that? Majority of the filmmakers in India have gone to film school in the United states (Ny or LA) and gone back to make movies in India(mostly the younger generation in Bombay atleast) If a hollywood studio comes knocking on your door to make a documentry are you going to turn them down?( I know shekhar has LOL)My point by cutting them slack was they are the ones who started this film Industry and they are pioneers or the original film Industry (isn’t it only recently where the goverement of india recognized indian film Industry as an Industry?) You are right it took them 30 years to see the potentianl and as i mentioned that it may take them 10 or more years but eventually they will come around and see the potential in India and china. there is no denying the force of India and China That is not even the question.
    I still dont see the comparesion between a 3 to 30 crore film you talking about you saying that a hindi film made in 3 crore will not make 30 crores even if it is a flop? (if you saying that i disagree)
    Anyways we can go on and on for days back and forth lets agree to disagree.
    Oh By the way I am a bombay boy so don’t get me wrong I love bombay and India and the film Industry I am not doing any PR for Hollywood.
    As a matter of fact I am struggling to get acting gigs here and make my films being indian it is not easy as there is not much work (so if you know any one who need an actor let me know i’ll come to India. Shekhar you to LOL)
    Oh and do check out my site http://www.Eliyas.com and if you like you can send your documentry i would love to see it.
    By the way The DVD’s I was talking about is made and sold by Indians in ny/nj.

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  17. saurav says:

    I’m a great movie lover, i think i can’t live without watching movies, i try to watch atleast 1 or 2 movies everyday.so far i’ve watched thousands of movies, every genres, in more than 32 languages, every famous director from D.W. Griffith to Ryuhei Kitamura.
    Piracy played a great role in making this possible.I own more than 2600 movies(1600DVDs+1000 downloaded from the net) all pirated.In excellent quality with all extras, 5.1 dts, dolby.Not those NYC VHS rips done by high school idiots.
    Let’s assume, i would’ve bought all the originals.An Original DVD ranges from 700 to 1500rs each, by taking an average of 1000rs each, it would’ve cost me around a whopping 26 lakhs($65000).I can buy a Mercedes 200 kompressor for that price.Doest it make any sense?? An average indian never earns this much of money in his lifetime, neither will i(let’s hope i will).i’m a very poor guy, i can’t even afford a decent home theatre system.i watch these movies on my stone age computer.Still i’ve invested 96000rs for this collection, which is a great part of my savings of my lifetime.
    I often visit the branded DVDs stores like PlanetM & Musicworld just to amuse myself & i can’t stop myself from laughing when i look at their collections.They have ‘American Pie’ but not ‘Citizen Kane’, they have Boom(kaizad gustad) but not ‘Do Beegha Zameen’.They don’t have good collection because nobody buys, demands the kind of titles i mentioned, according to the store staffs.No availability, Higher prices, censhorship,the long wait for the recently released movies in DVD.Buddy, what do you say about downloading the director’s cut??
    Like someone mentioned here, Movie industries should learn from the Mobile operators, they cut down the prices by 90% and their revenues increased by 900%.In India, people who can’t even afford a 15000rs bike, keeps a mobile phone & maintains it well, thanks to the calling prices( i pay 10paise/min.).
    I read & listen every now & then that movie or music industries lose millions or billions of dollors every year because of piracy.My Question is, why don’t they bear the loss for one year by cutting down the Disc Prices? Cut down the prices to $1 or $2 per disc, i’m sure the sales figures will increase by 10x.Nobody will buy the pirated DVDs or Music CDs then.Why would they, when original is available for the same price.
    If they don’t do this, i’m dead sure & i pray that piracy will never stop.

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