INR224 billion lost annually to piracy majority call for stricter enforcement: EY-IAMAI Report

• 51% Indian consumers access content from pirated sources
• Streaming is the largest source of pirated content at 63% followed by mobile apps
• Potential GST losses of up to INR43 billion were estimated to have been incurred

New Delhi, 23 October 2024: The Indian entertainment industry has been afflicted with piracy for several years. However, 62% of pirated content consumers believe that stricter enforcement is what is required to tackle this menace. According to “The Rob Report” released by EY and the Internet and Mobile Association of India (IAMAI), the size of India’s piracy economy was INR224 billion in 2023, ranking fourth against the segment wise revenue generated by India’s Media and Entertainment industry. Of this, INR137 billion was generated from pirated content from movie theaters while INR87 billion was generated from OTT platforms’ content. The potential GST losses of up to INR43 billion were estimated to have been incurred.

Despite a 150% rise in subscription revenue since the pandemic, “The Rob Report” reveals that 51% media consumers in India access content from pirated sources. Streaming emerged as the largest source of pirated content at 63%, followed by mobile apps at 16%, other avenues such as social media and torrent contributed 21%. Managing multiple subscriptions, unavailability of desired content online and steep subscription fees emerged as the top three reasons for viewers to indulge in pirated content.

Rohit Jain, Chairman of the Digital Entertainment Committee at IAMAI, stated, “The rapid growth of digital entertainment in India is undeniable, with filmed entertainment expected to reach INR146 billion by 2026. However, this potential is severely threatened by rampant piracy. It is imperative for all stakeholders—government bodies, industry players, and consumers—to unite in combating this issue. Only through collective action can we ensure a thriving future for our creative industries.”

However, 64% pirated content consumers conceded they would opt for authorized channels despite ad interruptions, if it was provided without a charge. 84%  pirated content consumers said they do not like to purchase tickets to watch movies. Further highlighting the Indian mindset of wanting good quality free content, 70% pirated content consumers claimed that they did not wish to purchase any OTT subscriptions.

Mukul Shrivastava, Partner and Forensic M&E Leader, EY Forensic and Integrity Services said, “The Media & Entertainment industry has been losing a significant portion of its revenue to piracy over the years. Several measures taken to combat this issue remain insufficient and fragmented and have not had a meaningful impact. It is crucial that different segments of the industry collaborate to mitigate piracy risk and push for stronger regulations and enforcement. Simultaneously, leveraging technology to combat the creation and distribution of pirated content will also be critical. This will ensure that original creators are able to protect their intellectual property and monetize what is rightfully theirs.”

Piracy has a preference

The EY-IAMAI report revealed that 76% of those who accessed pirated content belonged to the 19-to-34-year age group. Among those viewing pirated content, women preferred to watch OTT shows while men watched old, pirated films and renowned classics. 40% of pirated content is sought out in Hindi, closely followed by English content at 31%. On an average, Indians spend nine hours weekly, consuming pirated content out of which 38% of the time is spent watching OTT content and 22% is spent watching films.

Piracy is more prevalent in Tier II cities compared to Tier I cities. Limited means of watching authorized content, easy access to pirated content, a lack of awareness about the perils of piracy, income disparity and inaccessible theaters are some of the reasons for this contrast. Tier I users typically access pirated content to watch old films while those from Tier II cities watch illegitimate versions of recently launched films, once again showcasing the unwillingness to pay for tickets.

Can consumers be deterred?

Supporting the entertainment industry ranked lowest when it came to reasons to avoid watching pirated content. More individualistic concerns like ethical considerations, legal consequences and fear of malware emerged as deterrents for people to engage in piracy.

For India’s entertainment ecosystem to improve, it is imperative for the government and private players to take a unified stand against piracy. Policies need to evolve as swiftly as the piracy landscape. Stricter enforcement mechanisms must be set in place by both the government as well as private organisations. Large-scale awareness programs, watermarking premium content, innovations around pricing and bundling, forging international alliances all need to be done simultaneously to curb India’s growing piracy menace. An immediate regulatory overhaul and judicious enforcement action on a global scale will go a long way in taming this evil.

About Internet and Mobile Association of India

The Internet and Mobile Association of India (IAMAI) is a not-for-profit industry body with 580 members, including Indian and multinational corporations, as well as start-ups. IAMAI has been instrumental in shaping India’s digital economy. IAMAI advocates free and fair competition, and progressive and enabling laws for businesses as well as for consumers. The overarching objective of IAMAI is to ensure the progress of the internet and the digital economy. Its major areas of activities are public policy and advocacy, business-to-business conferences, research, promotion of start-ups and promotion of consumer trust and safety.

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