I am pleased to bring to you our next guest interview with Mr. Blaise Fernandes, President & CEO of Indian Music Industry (IMI). For those from the media and entertainment sector, Mr. Blaise Fernandes needs no introduction. I had the opportunity of recently meeting Mr. Blaise and discussing key issues concerning the music industry with him. Since there are so many important issues to be dealt with, we thought it would be best to do a topic wise interview to do justice to each issue. In this interview, Mr. Blaise deals with one of the primary problems being faced by the music industry which he compares it to cancer i.e. piracy.
IMI has been doing various activities to create awareness on the menace of piracy. Recently IMI organized a seminar on Digital Piracy in association with the Federation of Indian Chambers of Commerce and Industry (FICCI) and the International Federation of the Phonographic Industry (IFPI). The press release can be viewed here.
1. Could you tell us a bit about yourself and your journey from being the Managing Director of Warner Bros (India) to the President & CEO of the IMI?
23 years at Warner Bros. Two pit stops in between as CEO Gateway House a foreign policy think tank and Edelweiss an NBFC and now at IMI. I still continue to be a member of the Board at Gateway House.
2. The IMI has been fighting the menace of piracy in the music industry since a long time. Could you throw some light on the issues involved and what efforts are being taken by the IMI?
As per the IFPI-IMI Digital Music Study, 2019, the piracy rate has declined from 76% in 2018 to 67% in 2019. This is still high despite content being made available online for free through the ad-supported tier of digital music services. The study highlights that stream ripping at 58% is a major threat among other forms of piracy such as Cyberlockers and P2P apps.
There are many music related infringing apps and websites available. This provides alternative services to internet users to pirate content despite site blocking orders. Unlicensed websites such as jiomix.in, bigmusic.in and songspk.cc on an average have more than 350,000 (Source: Cutestat.com) daily page visits while unlicensed apps such as Free Music – Unlimited Offline Music Download Free (5M+ downloads) and Raaga Hindi Tamil Telugu Songs and Podcasts (1M+ downloads) have over a million downloads on the Google Play Store. In addition, site blocking doesn’t ensure permanent stay-down of websites as they often re-emerge through mirrored websites.
Video streaming platforms, especially those which have a user-generated content model, host copyrighted material on their websites/apps to monetize content generated by creators. Such platforms argue that they should be insulated from liability for the infringing material, owing to the predominantly user-generated nature; by virtue of being mere facilitators of user-upload activities and claiming that there are major challenges in identifying the nature of the material being posted. At the same time, these platforms point users to the posted content and monetize it by selling advertisements and/or harvesting user data. There seems to be a lack of support from tech companies in terms of IPR protection as the onus is on copyright holders to provide evidence of infringement which occurs as a result of the facilities provided by the tech companies, clearly suggesting that copyright holders are burdened by a problem created by tech companies. The Safe Harbour provision needs to be applied to its original purpose of protecting those services whose activities are passive in nature, given that they have exercised all due diligence to ensure that infringing content is not made available on their platform.
According to the IFPI-IMI Digital Music Study, 2019, INR 833 Cr. or 78% of revenues in India come from digital services. However, apps that have large traffic on their services and mis-use provisions like Safe Harbour as well as infringing websites lead to huge losses in the revenues earned by the recorded music industry in India. Piracy leads to annual losses of INR 1500 cr. to the recorded music industry in India.
Efforts undertaken by IMI to address the issue of piracy
We have always maintained that there is no silver bullet to this menace, it’s comparable to cancer in many ways. Hence our approach has been through chemotherapy and palliative care as highlighted in the narrative below.
In terms of chemotherapy, IMI has:
- Partnered with an enforcement agency – MCDCU, an arm of the government to help tackle the issue of piracy through site blocking and working towards building automated capabilities to track social media infringement on short-form video/audio content apps that rely on recorded music repertoire.
- Conducted a dialogue with advertisers’ association on “follow the money” approach in 2018.
- Lobbied with the government for administrative blocking measures through representations made to the Ministry of Electronics and Information Technology (“MeITY”) with respect to the proposed Draft Information Technology [Intermediaries Guidelines (Amendment) Rules] 2018 and to the Department of Promotion of the Industry and Internal Trade (“DPIIT”)which addressed and proposed solutions to the issue of Safe Harbour misuse and piracy respectively.
- Reached out to Indian missions in countries like US, UK, Malaysia and Singapore to seek domestic help in their countries to tackle issues related to piracy as reported by members of IMI, 50-60% of infringing sites were hosted by the US.
IMI has also undertaken palliative measures to address the issue of piracy through digital civics and the involvement of academia. In January, IMI curated and moderated a panel on copyright infringement, a conference organised with Department for Promotion of Industry and Internal Trade (“DPIIT”) and Maharashtra Cyber Digital Crime Unit (“MCDCU”) in Mumbai on IPR enforcement. IMI also held a roundtable in September, at the National Law School of India University (NLSIU), Bangalore which had a session dedicated on efforts to curb piracy with key takeaways revolving around administrative blocking and evangelizing the consumers about the negative impact of piracy on the recorded music industry. The IMI-FICCI-IFPI Digital Piracy Roundtable was held last month in November, solely to address the issues of Digital Piracy. Further, IMI has actively participated in IPR training programs conducted by the Cell for Intellectual Property Rights Promotion and Management (“CIPAM”) for law enforcement agencies.
3. With the rapid growth in the number of music streaming platforms and legitimate modes of accessing music, one would have expected a decline in piracy. Why is it still one of the leading problems being faced by the industry?
A leading problem in the music industry is the demand and supply of pirated musical content. From a consumer’s perspective, lack of awareness about the potential cyber security threats to themselves and the implications of piracy on artists and copyright holders has contributed to unhinged content piracy. The larger effect is that of perception, as piracy creates an image that music is a free commodity, which further affects music sales. This is a huge concern in India which has a wide music fandom base, as according to a study by IMI-IFPI, Digital Music Study 2019, 80% of surveyed respondents recognize themselves as music fanatics or lovers and an average internet user spends 19.1 hours per week listening to music. Therefore, it is important to sensitize consumers about the negative impact of piracy. Illegal downloads are also driven by consumers who are unwilling to pay for subscription services. In India, less than 1% of music subscribers are paid users as they prefer having offline access to their music content such that they can access music when, where and however they want it at a free or low cost (Source: Audio OTT Economy in India, IMI Report ).
The supply side of pirated music content is driven by ad-supported infringing sites that have minimal to no infrastructure costs. These ad-revenues enable the operations of such infringing platforms – sites or apps to dominate the results of search engines. Sensitizing advertisement agencies on the automated placements of ads on such platforms and the detrimental impact on content creators and owners is the need of the hour. Regulations proposed by the draft e-commerce policy in this regard are a welcome development.
Further, most of these infringing platforms operate outside the borders of India, for instance IFPI had issued notices to 467 infringing foreign sites offering content to the Indian Market. However, only 37% (Source: Vision 2022 Unlocking Fair Value to Stakeholders to Propel the Recorded Music Industry in India to the Top 10 Music Markets in the World) of these sites were taken down. It is a tedious process as these foreign sites fall under the jurisdiction of their respective country. This allows foreign infringing services to thrive in the Indian market for musical content.
Although, IMI is facilitating partnerships between the recorded music industry, stakeholders in the M&E ecosystem, law enforcement agencies and the government to tackle the issue of piracy, ineffective enforcement measures in India impede the recorded music industry from reaching the Vision 2022 goal of reaching the top 10 markets.
4. Have any other jurisdictions been successful in combating piracy? What are the global best practices you think India should adopt?
China is a good example of a case study of success of combatting piracy which contributed in part to China reaching the top 10 music markets at rank 7 in 2018 from rank 19 in 2014. This was a result of administrative measures introduced by the Chinese government. In particular, the implementation of the SWORD Net Action which was introduced by the National Copyright Administration of China (NCAC) receives 200-500 complaints annually from music copyright holders. In 2018, 214 cases were filed with 90% of these cases settled through takedown of content, shutdown, fines or confiscation of assets (Source: Vision 2022: Unlocking FairValue to Stakeholders to Propel the Recorded Music Industry in India to the Top 10 Markets in the World). These strict measures undertaken by the Chinese government have led to a takedown rate of 97% and a takedown time of 2 hours in 2019 (Source: Vision 2022: Unlocking FairValue to Stakeholders to Propel the Recorded Music Industry in India to the Top 10 Markets in the World.). In 2017, regulatory site blocking orders by the government body IGAC (Inspeção Geral das Atividades Culturais- part of the Ministry of Culture) which is responsible for media regulation in Portugal have successfully reduced piracy rates by 69.7%. Other examples of countries that have successfully carried out administrative blocking are Denmark, Italy, and Lithuania (Source: https://www.wipo.int/edocs/mdocs/enforcement/en/wipo_ace_14/wipo_ace_14_7-annex1.pdf ).
5. In 2012, IMI had been victorious in obtaining an injunction order against 104 music piracy websites. However, the rise in the number of piracy websites still continued post that order. What are your views on dynamic injunction orders?
Dynamic Injunctions, crafted as a remedy for the first time in India by the Delhi High Court in UTV Software Communications Ltd vs1337TX.TO & Ors, obtaining permanent and country-wide blocks of 10 major piracy websites, is a step in the right direction. However, there are certain practical difficulties which exist with the dynamic injunctions remedy. One of the primary issues with obtaining such dynamic blocking orders is that one still needs to submit domain names to the court to submit an “impleadment application” to add domains resolving to the same sites. This makes obtaining dynamic injunctions a cumbersome and time-consuming process. Another issue is that websites, against which dynamic blocking injunctions have been obtained and are hosted outside India, can still be accessed through VPN- Masking devices such as Cloudflare, which encrypts “domain name system” connections wherein the websites hosting illegal content, when accessed, are not visible.
6. What is your expectation from the Government in this fight against piracy?
- Administrative Blocking
Under s.69A of the Information Technology Act, 2000 and the corresponding Information Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules, 2009, intermediaries, including internet access providers, can be ordered to block public access to websites for a variety of national security and public order-related reasons. The procedure is efficient, but is not expressly available to the law enforcement authorities for the purpose of combating IPR or copyright infringement.
The express inclusion of intellectual property infringement as a ground for website blocking under s.69A of the IT Act or under the regulations would represent a major improvement in the IPR enforcement system. It would also increase the effectiveness of the current system in which some website blocking orders have been issued, e.g. by the Delhi High Court (but have not been implemented by all ISPs) and would complement the work of law enforcement agencies in the area of domain name suspensions where Indian authorities have made progress.
2. More concentrated efforts by CIPAM
The palliative care to the cancer that is piracy is via digital civics where it is important that the public at large needs to be educated about the potential financial threat of accessing content illegally. As per RAND reports, entertainment piracy operations have close links to terror organisations and crime syndicates. Cell for IPR Promotion and Management (“CIPAM”), an initiative of the Ministry of Commerce, has made a good start to spreading digital civics but efforts need to be ramped up – both monetarily and professionally. Additionally, the training carried out by CIPAM would prove to be more effective if an assessment of impact after a period of time that training is conducted, is carried out by CIPAM.
3. Need for more dedicated units to fight online copyright piracy
The state of copyright enforcement is not uniform across the country. There have been notable positive efforts in the form of enforcement action against online copyright piracy by the Telangana Intellectual Property Crime Unit (TIPCU) and the Maharashtra Cyber Digital Crime Unit, but there are no similar dedicated units in other states yet. Initiatives such as the MCDCU project and TIPCU projects in Maharashtra and Telangana, which are B2G (business to government) partnerships, where industry has made monetary and technical collaborations with a State initiative, are much needed. The Maharashtra B2G initiative should be rolled out initially to other high potential creative States such as Karnataka, Kerala, West Bengal, Andhra Pradesh, Tamil Nadu with immediate effect — and in Phase 2 to the rest of the country. For the Calendar year 2019, 68 music related sites out of a total list of 152 sites were suspended (as of August 2019) by MCDCU.
Capacity and training of police personnel needs to be strengthened to identify and effectively tackle online copyright piracy. This would help in creating a conducive IP environment and would help support the innovation that contributes to economic growth in India.
5. MoUs with Government
Given the boundary-less nature of the internet, in order to effectively fight against online piracy, global cooperation between different jurisdictions becomes imperative. Memorandum of Understanding (“MoUs”), executed between different countries, can be effective in increasing international legal cooperation, which authorise judges to recognise and enforce foreign judgments, especially passed to tackle online piracy.
The soft power of India should be able to help drive the growth of music exports and eventually, the growth of the recorded music industry. As a case study, Latin American music which has revenues worth US$ 704 mn was driven by the export revenue earned from the US in 2018 by way of music exports which amounted to approximately US$ 415 mn. Infringing websites hosted abroad inhibit music exports from India to reach similar heights.