Piracy continues to hit streaming platforms’ revenues, subscriber growth

Video streaming platforms in India are losing between 25-30% of their overall revenues to piracy, as addressable audiences continue to get access to content without credentials, say companies and media industry experts. Shows like Scam 1992, Rocket Boys and Aashram, among others, have recently been found circulating on platforms like Telegram, torrent sites and rogue websites that look like OTT platforms themselves, within hours of launch. Challenges of piracy have worsened since the digital medium has gained ground and while services are taking steps to watermark and encrypt content, many see piracy as an inevitable ordeal.

According to a report by data research and analytics firm Ampere, movie and TV piracy in India resulted in revenue loss of $2.3 billion over the past year.

“There is no denying the fact that piracy has always been a challenge and all OTT platforms bleed heavily because of it. We can try as much as we want but there will always be someone who will be able to crack a code, and it impacts a large chunk of the business especially for original shows,” said Saugata Mukherjee, head of content at SonyLIV. Mukherjee said it is possible for web originals to be pirated within an hour of launch and shows like Scam 1992 and Rocket Boys have probably been watched more on illegal platforms than their own service.

Soumya Mukherjee, chief operating officer at Bengali streaming service hoichoi said OTTs or any video-on-demand service primarily depends on direct subscriptions as its source of revenue, and with piracy on the rise, direct subscriptions tend to take a direct hit affecting revenue. The platform’s titles like Mohanagar, Karagar and Srikanto have been circulated across pirated services. “Another layer of setback happens when audiences opt for pirated sources, as our teams are unable to understand the pattern of content consumption that is taking place. A certain title might have performed better or a certain genre might actually be popular, but if non-subscribers or even existing consumers tend to go for pirated viewing options, it tampers the data that helps us understand and decide what kind of content works on the platform and hence affects decision making in terms of content production and acquisition,” Mukherjee said. Digital piracy has been on the rise following the OTT boom since 2020 and while 2020 and 2021 saw a substantial amount of digital piracy, it has spiked in 2022 as people become more aware and technically sound and users on these piracy websites and platforms increase, he added.

Piracy takes away all opportunities for revenue, be it on AVoD, SVoD or TVoD, said Gautam Talwar, chief content officer at MX Player. “If the viewer is not watching content on its original platform, all revenue is lost. Once a show is watched, it has very little residual value or monetization opportunity left. If, as a viewer, you are used to watching pirated content, then you will never visit the platform which has the original show, as consumers chase shows, not platforms,” Talwar said. He added that the platform’s original Aashram has been pirated despite being available to watch for free on MX Player. “Now that we have a subscription model, MX Gold, we can see how it impacts revenues and potential growth opportunities for the platform,” Talwar added.

While the larger urban population may not be consuming pirated content, the phenomenon is quite rampant in tier-two and tier-three towns. “The lower end of the audience may find pirated content easy to access and view and that is why a lot of OTT platforms haven’t been able to scale up in India and ARPUs have grown beyond a point,” Karan Taurani, senior vice-president at Elara Capital Ltd said.

Chandrashekhar Mantha, partner, Deloitte India who agrees OTT platforms lose almost 25 to 30% of their revenues to piracy said content can be leaked anytime from completion of final master edited copy to the upload of content by OTT on its servers. “This hurts platforms badly as pirated content may become available before its release date. OTT platforms can utilize technology for Watermarking, Digital Rights Management, Secure hosting, Encryption and improve controls over the content journey prior to final upload for release,” Mantha added.