The production and sales of music and movies are one of the largest industries in the world. Bollywood alone is one of the largest producers of media content in the world. India is ranked fourth when it comes to illegal downloads behind USA, UK and Canada. The online piracy of film, music and television content is through peer to peer networks like BitTorrent, or web-based file hosts such as rapidshare and megaupload.This causes huge revenue losses to producers. And this is not including the offline piracy through theatre prints of DVDs and CDs. According to an Ernst and Young report on “The Effects of Counterfeiting and Piracy on India’s Entertainment Industry”, the Indian film industry lost $959 million and 571,896 jobs due to piracy. The nature of the online piracy and anonymity makes it increasingly difficult to track down the perpetrators. With great advancements in technology, online piracy which falls under intellectual property crimes is one of the biggest businesses in the world.
Granting IPRs to producers of music and films enables producers to charge really high prices for their produces. This monopoly pricing and also the fact that online material is ubiquitous gives incentive to the customers to download the media files at a very low cost rather than spend money on the original material. This results in huge losses to the media industry.
The Competition Act can be used to regulate the pricing of media content so that consumers are not overcharged for the desired products. In developing countries, most of the time, a perfect substitute for a given media product is not available which gives further incentive to the consumer to resort to illegal methods. Even though the Competition Act and IPRs aim at improving welfare and promote innovation, their basic objectives contradict each other. While IPR gives supreme authority to the inventor for the use of his invention, the Competition Act tries to diffuse and disseminate that knowledge to the public. A healthy balance between producers’ profit margin and the consumers’ satisfaction is possible only if the IPRs and the Competition Act are not allowed to interfere with each other. Hence a proper framework for the working of both should be devised.
If the Competition Act can bring the price of media content to a reasonable level, the number of cases of illegal downloads can be brought down drastically.