Is technology a bane or boon for entertainment industry?

Mr PS Saminathan, CMD of Pyramid Saimira Groups's report at TiECON East meet, Boston.

BOSTON: Technology has legitimized piracy. Today piracy in music is accepted all over the world. There may be some respect for Intellectual Property Rights or at least people do talk about IP rights and its violations in the US, said Mr. P. S. Saminathan, chairman and managing director of Pyramid Saimira Group.

Addressing a panel on the media & entertainment industry at the TiECON East 2008 in Boston, he said the situation is unfortunately true. "Sometimes I see my own films in pirated DVDs and that's the sorry state of affairs. And I do produce awful lot of films and sometimes pirated DVDs are better than official DVDs and they are very cheap."

A brand new pirated DVD will cost only 20 cents in China and Malaysia and whereas if one could buy in bulk, the trader could negotiate the deal for 15 cents a piece and sell for 30 cents all across the world. Every single Hollywood movie is pirated in China and sent overseas. The day of the release and even earlier to the official release, pirated DVDs will be released in China and Malaysia. Technology has not killed the concept of piracy on the other hand it had legitimized piracy.

The Indus Entrepreneurs-Boston (TiE-Boston), the second largest chapter of the world's largest network of entrepreneurs and professionals held its 10th annual flagship conference at the Westin in Waltham. The theme of TiECON East 2008 was "Harnessing the Networks, Communication, Collaboration and Convergence, the 3 new C's in success". The conference offered more than 50 leading thinkers on various panels debating and dissecting the power of networks in a convergent economy. TiECON East helped attendees to interact with some of the best minds in the industry.

Analyzing the trends, he said these changes have a major impact primarily on one important thing - money. But from where I come from and where I operate especially China and other places where I operate, the concept of Intellectual Property has no relevance at all. "If you see the trends in the entertainment industry, it is very clear that the technology will be more disruptive. The concept of digital rights management and the question of controlling who will watch what will change the scenario completely upside down. Also, US industry is finicky about all these and more besides how many times a customer watched the contents," Mr. Saminathan added.

In the US, it's common to see commercials that talked about how you can download a movie and watch it only once, or four times, a week or even lifelong depending on the price you pay. It's not a moralistic comment one can make about piracy. "We should accept that technology will change the way the content will get distributed in future. We should accept that we can't wish away the changes. Any company, any organization or any society wishing away changes will wish itself away." Technology has completely overtaken business models and also normal people's ability to understand the film industry. In future, not many would pay for renting a video of a movie, and there will be no copyrights at all.

Some other business model may emerge. Once upon a time, broadcasting was completed funded by advertisement model and when US moved away from the advertisement model to subscription- oriented model, along with it brought down the quality of programs. There is no social pressure on programming because the advertising guys too much of pressure for RP ratings. The rating points guided the advertisers and they monitored it so effectively that the programs used to be sliced and targeted. Subscription revenues are driven by a single content and one important event like a super bowl and rest of the contents was tagged on to the main content. Quality dropped down after the broadcasting industry has moved away from advertisement model to subscription based revenue model. Time has come and the industry has to take a second look at the business model.

The next paradigm shift in entertainment is happening in China. Many think that US is the shakers and movers of the entertainment industry and that probably could be true in terms of numbers. Walt Disney's turnover is around $35 billion. Hollywood industry has animation, gaming and content production totaling around $80 billion to 90 $billion all across the world. It operates at 187 countries. It releases normal prints around 1200 places. Hollywood has 87 different distribution channels available at any given point of time.

But this is hiding one very important thing that is happening in India. Indian industry has two major currents that have happened in the last 12 years. The first is in terms of technology. Technology has become completely disruptive and most of the companies are relatively low to reacting to technology changes with digital cinema and internet contents being two best examples.

Music industry has been extremely slow to react to disruptive technology that has happened. Probably, because the US has lower technology in terms of communication and entertainment industry. The adaptability of technology is also lower in the US. There is also resistance in the entertainment industry to adopt higher and emerging technological standards. So far Hollywood had set the way in which entertainment industry is moving and the technology adopted by the Hollywood has so far been followed by rest of the world. But things have changed in the last four years from the start of the new revolution called e- cinema.

The second major change that has happened is that people have moved away from mass produced professional content to self produced individualized contents. That's the change lots of people have not anticipated. People thought that the success of You-Tube may be a short lived phenomenon. The success of user generated videos will be marginal but it is proving beyond doubt that they are huge success all across the world.

Even in India, a large number of websites are coming up and are created by entertainment companies. Adlabs has a very dedicated site for user generated contents. "We have also done a beta launch of a very dedicated site. Huge changes are happening with people moving away from professionalized contents to user generated contents. That's the second major change to take place."

This is concurrent to one major change what everyone predicted. Media and entertainment will move away from being a push to a pull industry. For the last 70 years media and entertainment always have been pushed to the consumers. Interactivity has opened the way so that the consumers need not be passive but he can pull and posses ability to derive what content he want to see and enjoy.

Because media conglomerates are no longer creative that they could not produce enough creativity people like and have become formula oriented. Be it Hollywood or Bollywood or Korea or Greek, all have become formula oriented. Hence they have huge problem in terms of creativity. These companies should move away to platform-oriented for survival.

Entertainment companies should create a platform for people to express creatively and allow customers to choose the creativity they prefer to watch. And have a business model which need not be subscription-based or pay per view based. If it did not move in this direction in the next 10 years, some others will move in and will make elephants dance.

Other panelists include Movie director Manish Goyal, Ad Labs North America Business Head Udaya Kumar, Animation Studio President Srini Vasan and TiE panel convener Amit Baid. The session was moderated by Dr. Tuli Banerjee, head of India Center at Massachusetts Institute of Technology and who teaches a course on Indian Cinema at MIT.