In a way, the music companies have suffered due to the rapid pace of technology. The gray market operators require minimal infrastructure to undertake the duplicating operations. The formats of storing and selling music have also become more sophisticated. A single CD store more than 100 songs. Saregama's Shveta Jain adds : "An ordinary CD cost Rs 40 and has content (recorded songs) that had cost the music industry millions in terms of acquisition of music rights. Saregama had lost a huge proportion of their entire archives of old Hindi film songs to the grey market."

The IMI officials claim that the laws are woefully adequate to combat the menace of piracy. "There were 3650 cases registered over the last four years. The law provides for a fine of Rs 50,000 and imprisonment for upto six-months. But the catch is that the cases are first heard by the first magistrate who is not empowered to give a ruling that includes the above mentioned fines. Only 191 cases have ended in conviction and just 30 percent have been awarded long prison terms or heavy fines," laments D'Souza.

With a negative growth of 11 percent in 2002 and the unorganised sector growing to 50 percent (Rs 6 billion) of the total pie; the IMI is considering hard options to milk all the existing and future revenue streams such as FM radio, TV channels and Internet. The IMI estimates that the legitimate industry has shrunk by 27 percent in volume and 38 percent in value. The industry is believed to have had a cash loss of Rs 2 billion.

D'Souza also adds: "Another issue is related to the discriminatory excise duties of 6-8 percent on music CDs and none for computers CDs. The moot point is that the manufacturing process for both types of CDs is similar. Due to this anomaly, the illegally available CDs' prices decrease by nearly 20 percent. This goes against the music companies who can't compete at much low price levels."

The music industry is in doldrums due to the impact of piracy and lack of planning during the past decade when the industry bigwigs gave away too much for too little. The impact of the lack of foresight is being witnessed now.

"During the early nineties, the music companies didn't pay much heed to the protection of intellectual rights. They also did not drive a hard bargain with the producers and the TV channels, neglecting the fact that these channels could contribute substantially to the revenue streams in the future when margins got depressed. Currently, piracy has gained gigantic proportions and the member companies are not getting their dues from the existing revenue streams," says IMI's newly appointed secretary general Savio D'Souza, who has joined the association recently after a diverse experience in space selling, television marketing and distribution.

Film and music industry sources say that the music companies, already suffering from having to pay huge music selling rights to film production houses, were getting hit very badly. They say the fall is marked at the lower end of the market, as customers with lower purchasing power have cut down on CD and cassette purchases finding FM channels a welcome alternative.

Sale Price and Margins - CDs (Source IMI)

Piracy - Impact on sales and volumes (Source IMI)

Figs in Rs millions

IMI will rope in several prominent personalities and educate the youth and other focus groups to start buying legally available music.

Well, when the going gets tough, the tough get going! The Indian music companies have realised that they need to act tough now rather than repent later.

IPRS CISAC-Asia Pacific Committee meet on copyright
The controversial 52 1 (j) clause of Copyright Act, 1957 Chapter XI: Infringement of Copyright