A Napster moment for online video and music platforms in India as piracy soars

[Captain Marvel]

A Napster moment for online video and music platforms in India as piracy soars in lockdown

Online video and music on-demand platforms, which saw a huge jump in viewership during the lockdown, are seeing their thunder stolen by rampant piracy, especially on encrypted messaging platforms like Telegram and WhatsApp, and the deep dark web.

Telegram saw piracy on its platform jump a staggering 1092% or about 11 times during lockdown, while the Internet and mobile on a whole saw a 348% increase, according to data shared by Markscan, a company that works with the entertainment industry to fight piracy. YouTube saw a 42% increase.

“Piracy has been a growing concern for creators and publishers. With the pandemic induced lockdown, there has certainly been advent in piracy for our content,” said Nachiket Pantvaidya, CEO, ALTBalaji, and Group COO, Balaji Telefilms. “In a situation like this, piracy of content that is behind a paywall pulls the OTT players two steps back by attacking the business directly as potential consumers download fall and existing consumers view the pirated content.”

During the lockdown, experts said, viewers were starved of new content. There were neither new episodes, movie releases nor any sporting events. Consequently, many of them turned to pirated content stolen from advertising or subscription-based video streaming platforms.

The capacity of the ecosystem to address the theft was also affected.

“Piracy especially during lockdown grew multifold. The capacity of the ecosystem to address pirated content also took a huge hit. There was an increase in turnaround time. The ability of ISPs was severely compromised. It still is to an extent,” said Abhishek Dhoreliya, founder of Markscan.

ENCRYPTED PLATFORMS - A LEGAL BLACKHOLE
Experts say encrypted platforms are making sharing pirated and illegal content much easier, especially at a time when movie theatres are closed and releases are happening digitally. Hackers and pirates are stealing content from digital platforms and sharing them directly or via links on encrypted messaging apps, including Telegram.

WhatsApp groups are also known for sharing of links to websites that host pirated content. However the scale is much smaller due to file sharing limitations. Since law enforcement agencies don't have access to these encrypted platforms, takedown of links are often slow and manual as owners scroll through these groups by themselves.

“As opposed to global content, Telegram is a huge source for Indian pirated content. It’s features make it an attractive platform for pirates. It’s a huge issue for Indian content,” said Dhoreliya of Markscan. “WhatsApp has only signposts or links to follow for pirated content - given the limitation of the WhatsApp platform they are not able to have content. It is not ideal as well but signposts are a lesser evil than pirated content itself.

Telegram, which is a UK-headquartered encrypted messaging app founded in 2013 by Russian brothers Pavel and Nikolai Durov, allows file exchange of up to 1.5 GB. Its supergroups can accommodate up to 200,000 members each and channels that can broadcast to unlimited audiences. It has 400 million monthly active users globally.

Telegram has clearly said on its website that all Telegram chats and group chats are private amongst their participants, and it does not process any requests related to them. However, it has added that if Telegram channels, publicly available, are infringing on content, the copyright owner or an agent authorized to act on the owner’s behalf can submit complaints to the platform.

Telegram did not reply to ET’s specific queries on industry’s accusation on it doing little to control piracy on the platform.

WhatsApp said it is a private messaging service where the vast majority of conversations are 1-1 or within small groups. “We prevent mass distribution of content by banning accounts that engage in mass messaging and have sensible limits of the size of groups and the files people share,” it said in an email comment.

PIRACY, A SHAPE-SHIFTING MONSTER
While the recent lockdown might have made the pirates bolder and consumers more receptive, the problem has been around for the last several years, described by many as akin to Hydra, the multi-headed water snake monster of Greek mythology. Anyone who attempts to behead the Hydra found that as soon as one head was cut off, two more heads would emerge from the fresh wound.

“Piracy is massive. We take two years to make original content and it takes less than 12 hours to be on a pirated website. Monetisation won't keep pace if churning high-quality content,” said Gautam Talwar, Chief Content Officer, MX Player. “We block one, three other pop up. It is impossible to monitor to a point when we can get it under control.”

MX Player is owned by Times Internet (TIL), the digital arm of the Times Group, which publishes the Economic Times

“The investments we make in original content is humongous. When our customers are stolen from us by Telegram, WhatsApp, BitTorrent, it becomes a huge problem. Then customers move into that direction of getting content illegally. It is a loss of money and users,” said Tushar Vohra, Head Technology, Zee5.

The Indian Media and Entertainment (M&E) sector reached $25.7 billion in 2019, registering a growth of 9% as compared to 2018, states the FICCI EY report released in March this year. Without unabated piracy, the industry can grow much faster, according to experts. Piracy causes severe revenue leakages in the monetisation for producers and creators.

“During the lockdown the number of pirated websites has grown manifold. However, it is important to remember that the situation was precarious even before that, ” said Nitin Tej Ahuja,Chief Executive Officer, Producers Guild of India. "The heart of the problem is that Indians don’t consider watching pirated content as theft".

The most affected by piracy are the film, music and sports live streaming industry apart from the video-on-demand segment. As opposed to earlier, when pirated content on CDs was found on street corners it now widely available on internet platforms, shape-shifting websites and cyber cafes offering bulky content catalogues.

“We are witnessing 3 significant trends in online piracy – Live stream stealing, screen recording and account sharing. Of these, the first one is more detrimental as live streaming is a revenue generating product. Screen recording as a practise has been prevalent in India for long and has plagued the TV and movie industry as well,” said a SonyLIV spokesperson.

The issue of piracy is as severe for the music industry. According to Digital music study, the piracy rate for music stands at 67% in India, causing an estimated loss of revenue of Rs. 1500 crore annually. The problem has been aggravated by unlicensed music being used on many short-video and messaging apps.

“It is already a big problem to start with, further fuelled by the proliferation of video sharing social networking services and the rise in use of unlicensed content in these apps, that needs to be plugged asap. This problem if not nipped in the bud will have serious ramifications for the recorded music industry,” said Blaise Fernandes, President & CEO at Indian Music Industry.

LEGISLATIVE and REGULATORY STRUGGLE
Legal experts say India could be facing its ‘Napster’ moment and are struggling to find a permanent solution to peer-to-peer sharing apps. Napster was a popular peer-to-peer (P2P) file-sharing Internet software that helped share digital audio files, typically audio songs. As the software became popular, the company ran into legal difficulties over copyright infringement, and eventually shut down in 2001.

Platforms are working with specialised anti-piracy firms who in turn work with search engines, app stores, brands to reduce the availability and visibility of pirated content, and also reduce their advertising-led business model. MarkScan said it builds pressure on Telegram via mobile app platforms such as Google Play Store and Apple App Store.

One of the most powerful tools that Indian entertainment industry has against piracy websites are so-called ‘John Doe’ orders, where an injunction remedy is provided against unknown people’s websites to protect the intellectual property rights of the creator of artistic works like movies and songs. These orders can help internet service providers and web hosting companies take down thousands of links in one go, even though sometimes it takes time to implement it.

“Piracy is a supply and demand problem. Almost the whole piracy ecosystem is outside India. Indian has no jurisdiction on it. ‘John Doe’ orders by the courts have a long turnaround time and are easy to circumvent,” said Markscan’s Dhoreliya.

One of the primary reasons India struggles with controlling piracy is that almost the whole supply ecosystem of pirated content is outside India, giving the country limited options to legally book and dissuade the pirates.

“The judiciary has stepped in with ‘John Doe’ orders. The need of the hour is for legislation to step in. In India, no one gets punished for pirating content. There are civil remedies also available but the damages granted are not much,” said Geetanjali Visvanathan, Attorney at Ira Law. She specialises in intellectual property rights.