Saturday, June 25, 2005

The futile fight against piracy

I was under the impression that only legitimate stuff has an open and quantified market value until I read this [Thanks to Indiauncut for the link]. According to this article, the piracy market is worth Rs 100 crore in India. If anything, that could only be an understatement because there are simply too many pirated movies around.

Just why do these piracy markets exist? I guess it’s because of the reason that original CDs and DVDs are unaffordable even to relatively well-off movie buffs. What do you expect when an original CD costs Rs. 300 or 200 depending on whether the movie fits in 3 or 2 CDs? DVD rates are worse. The prices hover around Rs. 500 for a single movie. But take the manufacturing cost price. The CDs in itself wouldn’t cost more than 10 a piece, and packaging etc would cost peanuts. Even if the price of making, packaging and distributing a 3 CD movie pack is 50 Rs, what justifies 300 bucks to the customer? Agreed that it has to be priced a little above the theatre prices, and agreed that the distributors have to pay the movie producers and all, but what is the justification behind such a huge difference? And when such a thing exists, is it a surprise that piracy market is flourishing?

There have been several clamp downs on the piracy operators. Everyone who’s a bit into computers and related stuff would know that you get such pirated version at prominent places – like Ritchie Street in Chennai and Palika Bazaar in Delhi. I love movies, and when I look at the options before me, an original movie CD packet costs me 300 bucks, and a pirated DVD containing 4 or even 5 movies, with very good prints, costs me just around 100 bucks. The equation is pretty much like: 1 movie if you want to be honest, truthful [and all positive attributes] vs. 15 movies if you think its ok to buy pirated stuff. Honestly, it’s very tempting to go for the second option, considering that movie is entertainment stuff and one really doesn’t want to spend a fortune on it. I’m not saying its right to go for pirated stuff, but it’s very, very tempting.

But then, it is not that people won’t buy original CDs or DVDs unless the price falls to the levels of their pirated counterparts. There are a lot of inherent advantages in going for original versions. I bought the Patton VCD despite the fact that it dented 300 bucks in my pocket, only because of the fact that I found it difficult to find. Yes, I really had to convince myself, and even had to wait for an ‘occasion’ - ending of summer project - to make up my mind. In another instance, I didn’t even wink twice before picking up All quiet on the western front, another rare one, after noting that it costed just 100 bucks. In simple terms, original CDs provide much more variety. That’s the advantage-point. I really don’t mind shelling upto say 150 bucks – the cost of a multiplex movie experience – for a CD packet. But anything more just seals my chances of buying it. It’s exactly the same case with a lot of my friends, most of them either B-school students or software engineers, whom I would call potential customers.

Net-net, I’d say there’s a chance to atleast partly eradicate piracy by pricing the CDs and DVDs close to the theatre rates. I think profits can definitely be reaped due to the increased scale of operations - the increase in volumes. But just placing a clamp, conducting an occasional raid-drive etc doesn’t help anything. Infact, as long as the pricing is not going to be brought down, the situation can only escalate, what with the increase in network bandwith, compression technology improvements, and increase in storage capacity.

10 Comments:

At Sunday, June 26, 2005 11:10:00 AM, Blogger thennavan said...

OT: Have blogrolled you :-)

 
At Sunday, June 26, 2005 12:16:00 PM, Blogger Kaps said...

Warner Brothers wanted to enter China and they looked at the pricing of the Pirated products. Warner Bros. priced their original VCD's and DVD's marginally higher than the pirated ones people start buying the genuine stuff.
This model has worked well for them.

I think Nokia India also dropped the prices to compete with the Nokia parallel imports from Middle East and South East Asia. The VCD and DVD firms can learn from them and start dropping the artificially high retail prices.

 
At Sunday, June 26, 2005 12:43:00 PM, Blogger Govar said...

@Thennavan: Thanks a lot!

@kaps: Exactly! btw, thanks for the info abt China.

 
At Sunday, June 26, 2005 5:40:00 PM, Anonymous anil said...

And what abt Music piracy ? ;-)

 
At Sunday, June 26, 2005 5:51:00 PM, Blogger Govar said...

Couldn't think of anything... will post if I get sth in mind... :)

 
At Sunday, June 26, 2005 9:55:00 PM, Blogger ~Nsn said...

Vices are always glamorous and pay big time, Guess you would be aware of Prostitution being legal and termed as an 'entertainment industry' in a few countries, similarly porn on net is a gold mine, may be ppl find it easier to tread the path of Eve.

 
At Sunday, June 26, 2005 11:21:00 PM, Blogger Govar said...

Treading the path of Eve is fine as long as they don't hit others' tummies. If they do, we got to stop them from treading, coz we simply dont have an option.

 
At Monday, June 27, 2005 11:18:00 AM, Blogger Chez said...

Its true tht pirated versions are too good to resist.

If only those companies tackle that 'indulgence' part and price their products in a agreeable way...

 
At Monday, June 27, 2005 6:57:00 PM, Blogger Rahul said...

Agreed, its very tempting to buy pirated CDs.

Its even more tempting to RIP the classics you rent out and watch over the weekend:-)

Anyways, piracy is something which can't be eradicated, maybe controlled to some extent.

 
At Friday, December 30, 2005 10:54:00 AM, Anonymous Anonymous said...

I recently spend 1800 Rs buying 6 DVD's and have been cursing myself since then.I new DVD's are cheap from palika and have bought dozens still. One reason was that quite a few DVD's gave me trouble, were freezing and I had to spend fuel to and fro CP to exchange them getting a few more which troubled me again. But each time I enter the showrooms I curse them for not lowering the official DVD prices + there are no discounts and schemes that you get on CD's.

Any idea how low these people are quoting for DVD's at palika today ? I am still paying 100 bucks.

 

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