Market Watch

Indian Anti-Piracy Board Suggests Price Cutting


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An anti-piracy committee set up by the Indian central government has recommended lowering the price of legitimate DVDs and the closure of the theatrical-to-DVD window to combat video piracy in the region. Further recommendations include the conversion of traditional cinemas to digital projection, a unified DVD release strategy for larger Indian cities and the enactment of legislation to provide 'preventive detention' of video pirates, already active in some Indian states. The committee also indicated that cinema licensing agreements should make the prevention of camcording the responsibility of cinema operators. Support was also given for amendments in the Cable Television Networks Act, replacing the existing system of registration for cable operators with a licensing system, and the establishment of a French-style 'three strikes' system to be enforced by Internet Service Providers. The proposals have been passed to India's Ministry of Information and Broadcasting for review.

Analysis
Piracy remains the principle barrier to the development of a substantial home video industry in India in spite of a number of moves in recent years to combat it. Despite initiatives by some local distributors, led by optical disc manufacturer Moser Baer, to offer legitimate DVDs at cheap prices, the price of legitimate studio content remains too high for many consumers. Measures such as those suggested by the committee, which increase the risk of prosecution and lower the profitability for criminal organisations, initally proved successful in combating piracy in Russia, although the resulting upturn in spending was subsequently reversed by the global recession. The closure of the theatrical-to-DVD window would remove the window for pirate product (but not necessarily affect pirates' ability to undercut on price), whilst improved internet legislation would in theory help stem the flow of high quality pirated material. The risk for video distributors is that lower prices might simply reduce revenues from consumers who already buy legitimate product without generating sufficient new business to compensate.
 
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