Online Piracy: Potential economic impact and setting parameters

Advertising and subscription-based OTT platforms are facing between 25% to 30% of loss of revenue, as they lose views and subscribers to illegal platforms which pirate content.
Anil Lale
Anil Lale

“Piracy” is the most dreaded word which shakes the creative economy to its core.

For a film producer who has invested millions in creating a film, everyday till the release of the film is a day living under fear of the film leaking and finding its way to online illegal streaming services or torrent sites before it is released.

It would be nothing less than sheer luck if a watchable pirated version of a film does not surface till at least two weeks from its official release.

Similarly, any television show which is broadcasted on any popular television channel is uploaded by pirates on illegal streaming sites almost in real time.

According to a recent KPMG projection, the digital and over-the-top (OTT) content industry in India is estimated to grow at 17% over FY21 to touch a revenue of ₹33,800 crore by FY22. This includes OTT platforms that make available a variety of content including television shows, films and even original OTT content.

However, advertising and subscription-based OTT platforms are facing between 25% to 30% of loss of revenue, as they lose views and subscribers to illegal platforms which pirate content and make it available for free to viewers.

Curiously, the definition of piracy is not something we can find under the Copyright Act, 1957 (as amended to date) since the laws in India only deal with infringement of copyright.

Sec. 51 of the Copyright Act defines infringement as doing anything the owner has the exclusive right to do as per the Copyright Act without an express license from the owner of copyright.

It is also infringement to permit for profit any place to be used for the communication of the work to the public where such communication constitutes as infringement of the copyright in the work, unless the person so allowing the place being used for such purpose is not aware and had no reasonable ground for believing that such communication to the public would be an infringement of the copyright.

The offence of infringement carries a minimum imprisonment of six months with a maximum of three years and fine not less than ₹50,000, which can extend up to ₹2,00,000.

However, the word "piracy" is generally not used in connection with mere infringement and is used more in the context of “business of infringement." For example, if lyrics or musical compositions are used without the permission of an owner or if one song is played without obtaining prior license on a television channel or even a single or few instances of such usage of content where copyright exists without consent from the owner, can come under the scope of infringement as the punitive repercussions available under the Copyright Act are commensurate to such infringements.

However, when a person intentionally indulges in large scale infringement of copyrighted works and treats it as a business by operating websites or apps which provide infringing content or facilitate distribution of infringing content, the provisions dealing with infringement under the Copyright Act falls short as a deterrent. Websites and apps that predominantly pedal infringed content is what bleeds the creative economy today.

This form of piracy is the bane of creative economy and has its tentacles spread across the world. What a viewer of pirated content fails to understand is that downloading such illegal apps or downloading torrent files poses some real danger not only to the creative economy, but also to the viewers and the safety of the country itself.

What a normal person perceives as a mere download or stream of an illegal content has multipronged impacts.

Firstly, it takes away revenue and jobs from the creator community, which includes the people who work in the creative industry and the platforms which invest in creating and making available such content.

Secondly, such downloads and streams also install malware and cookies which mine personal information about the viewers and sometimes even access their systems for illegal purposes.

Thirdly, the revenue that is generated from such illegal activities may also end up funding other illegal activities including organised crime. So it is important for viewers to be educated about these imminent dangers, since reduction in demand is the best way to fight piracy.

With technological advancements, the means of piracy are also becoming extremely complex. As consumption of content has shifted onto mobile devices, even the downloading of content using torrent websites are now becoming passe, as pirates have started circumventing Digital Rights Management (DRM) and are illegally aggregating and making available content from almost all OTT platforms on illegal streaming platforms.

These pirates have no face and no territorial boundaries while our laws and enforcement mechanisms are restricted by state and international boundaries. It is a mammoth job to identify and bring a pirate who sits outside India before the law today, and the prohibitive costs associated with this sometimes dissuades a copyright owner from taking action.

Presently, the only recourse to create a dent to piracy is to approach courts seeking injunctions directing ISPs to block pirated content online. While courts have also been innovating and has passed orders like John Doe orders (injunction against unknown/unnamed persons) and dynamic injunctions (injunction orders which allow addition of respondents through administrative process thereby giving more flexibility and speed), it is still akin to treating the symptom and not the disease itself.

The moment a link is taken down, another link just pops up and continues streaming the same content. At the same time, presently, there are no effective mechanisms to shut down and/or bring the pirate before the law, because that person is sitting in a foreign jurisdiction.

While technological measures like DRMs and blockchain can be deployed to control and track piracy, it still will continue to be a very serious issue till some effective steps are taken by the government to give teeth to the fight against piracy. Some such steps maybe to:

1. Introduce new provisions under the Copyright Act for dealing with piracy by distinguishing it from infringement and providing for much more stringent punishments and making such offences non-bailable.

2. Introducing a new provision under the Information Technology Act setting out the process for issuing blocking orders by the relevant authority against websites and apps that make infringing content available.

3. Creation of a nodal agency to act as relevant authority which has the powers to maintain Pirate Website List (PWL) and issue directions to ISPs and other intermediaries including app stores to block such websites and applications.

4. Administrative cooperation between countries to shut down pirate operations and act against other forms of online piracy that originate from other countries.

The bottom line is that the fight against piracy has to be in real time and cross-border alliances are required for this. We need to get over the problem of law not matching the speed and agility of such illegal operators.

Ideally, the aforesaid nodal agency should be established under the Central government so that it has multi-state jurisdiction and also can coordinate with other similar agencies across the world.

This kind of an agency can very well be set up under the Department for Promotion of Industry and Internal Trade (DPIIT), which already handles matters related to protection of Intellectual Property Rights (IPR), acts as the nodal agency for administering copyright laws of the country and even works with the World Intellectual Property Organisation (WIPO). DPIIT also has five territorial divisions for international cooperation and industrial promotion.

Also, if this agency adopts a private-public partnership model, it can even lead to private players providing their expertise on the technology front and also in the maintenance of a central pirate website list (PWL), which can be updated from time to time.

This central agency can also issue directions to ISPs to block websites which are included in the PWL and this will help in reducing the burden on courts and the reaction time in dealing with piracy to a great extent.

Further, establishment of such nodal agency can really help in formulating the right policies for enforcement of IPR and also enable the fight against piracy on a real-time basis.

Anil Lale is General Counsel for Viacom18.

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