Scope For Further Promoting A Budding Relationship between the Film Industries in the United States and India By Uday Singh

According to the Motion Picture Dist. Association (India) Pvt. Ltd. (MPDA), the local representative office of the Motion Picture Association, India is already the fifth largest international box office market in the world after China, Japan, France and the United Kingdom. See, MPAA 2014 Theatrical Market Statistics. (The Motion Picture Association is a trade association representing six major international producers and distributors of films, home entertainment and television programmers: Paramount Pictures Corporation, Sony Pictures Entertainment Inc., Twentieth Century Fox Film Corporation, Universal City Studios LLLP, The Walt Disney Studios and Warner Bros. Entertainment Inc.)  This growth needs to be fueled by policies which create a favorable legal and business environment for the development of Intellectual Property Rights in copyright industries while facilitating sharing of global best practices and engagement with the International copyright community. The India-US joint statement in early 2015, “Shared Effort, Progress For All” (in Hindi “Saanjha Prayaas Sabka Vikas”) reinforces the need for continued dialogue and cooperation between copyright industries and the Government of India to build an Intellectual Property Rights regime that encourages development and innovation in the Indian media and entertainment industry.

The MPDA applauds the Government of India (Department of Industrial Policy and Promotion, Ministry of Commerce and Industry) for pushing forward the much-needed National IPR Policy that envisages IP as an integral part of India’s overall development policy. However, for protection and development of IPRs in the film and television industry, sector specific IPR/Copyright issues and focus areas that facilitate ease of doing business need to be addressed as highlighted below:

Recognizing Industry Potential

India’s creative industries, which include the film and television sectors, have demonstrated their positive contribution to the nation’s economy. In 2013, the total (direct and indirect) contribution of the film and television industry to the country’s economy was estimated at ₹50,000 Crores (₹500 trillion, or $8.1 billion), equating to 0.5% of India’s GDP.  See, Economic Contribution of the Indian Motion Picture and Television Industry, 2014, MPDA, India, Deloitte. This included the economic contribution of a wide range of sectors that make up the industry value chain, including film production and distribution, film exhibition, non-theatrical revenues (including Cable and Satellite rights, Digital /Online rights, music and home video rights), television production, broadcasting and distribution, and the fast-growing new media sector. The sector also supports a significant 1.8 million jobs.

This industry has the potential to contribute on a much larger scale, however the lack of a robust legal framework and uniform enforcement measures to curb piracy in this sector continue to undermine the growth of India’s creative industries. Copyright industries need to be addressed with equal importance with respect to other sectors, while building a robust legal and enforcement framework to ensure that India’s creative industries can enforce their IP rights and achieve their full potential in a rapidly changing marketplace.

Controlling Piracy / Content Theft

Content theft negatively impacts profitability, thereby resulting in less investment capital. Lesser capital pegs down the number of films that can be financed, thereby creating fewer jobs. Over 90% of new release titles  originate from cinemas. Infringing copies appear online within few hours of a film release. Online content theft via illegal or “Rogue websites” contribute to, facilitate, and/or induce the illegal distribution of copyrighted works, such as movies and television programming. This affects the performance of the film, the distribution cycle and jobs.

Moreover, according to the Cisco Visuals Networking Index (VNI) forecast, in the next two years, India will have the fastest internet traffic growth (348 million internet users) and become the second largest internet market in the world, surpassing China. As the Digital India campaign and cable TV digitization in the country progresses, there is a growing need for adequate legal protection and enforcement measures to combat piracy through cyberlocker, BitTorrent, web-based file hosting, wireless access control (WAP), blogs etc. which continue to stunt India’s creative industries.

The implementation of a strong IPR Regime needs to consider specific amendments and improvements in the legal framework to address both source and online copyright infringement and streamlining of enforcement and copyright administering systems, in addition to running sector specific campaigns to promote copyright industries.

Promoting “Make In India”

In 2014, the media and entertainment industry was recognized as one of the top 25 sectors in the Make in India national program to drive growth and innovation. We applaud the recent steps taken by the Government to establish a Single Window Clearance Mechanism for film shooting. This will not only help attract international film and television productions to shoot in India, but will greatly benefit the entire production ecosystem for all screen content creation. The MPDA has worked since 2012 through the Los Angeles India Film Council (LAIFC), to support the single window clearance system, which is a stepping-stone in building a film incentive regime in India.

The LAIFC aims to facilitate and strengthen motion picture production, distribution, technology and commercial cooperation and encourage international collaborations between film communities in the U.S. and India. India needs to consider immediately establishing Film Commissions to act as one-stop-shops, coordinating with local government and filmmakers to provide all the necessary services for film shoots. Across the globe, Film Commissions or similar agencies play a pivotal role in attracting foreign productions into a country, cutting through the red tape, facilitating film shoots, and where possible, extending various production and tax incentives. Through the LAIFC, MPDA will continue to encourage initiatives that will help India to develop as a leading international filming destination.

Encouraging Ease of Doing Business: Rollout of GST

One of the basic objectives of the Goods and Services Tax (GST) is to usher in a simple, efficient and equitable tax structure. This objective would be best achieved if entertainment tax is subsumed in the GST. The continuation of entertainment tax in any form outside GST would be a hurdle in attaining the simplicity that the GST seeks to achieve. The existing entertainment tax structure is seriously flawed. It is a patchwork of many taxes, and entertainment rates are abnormally high. The impact of cascading taxes on the industry is significant. The rollout of the GST will definitely make it easy for companies in the U.S. and India to do business – generate higher output and create more employment opportunities.

Uday Singh is the Managing Director of the Motion Picture Dist. Association (India) Pvt. Ltd, the local representative office in India of the Motion Picture Association, a trade association representing six major international producers and distributors of films, home entertainment and television programs: Paramount Pictures Corporation, Sony Pictures Entertainment Inc., Twentieth Century Fox Film Corporation, Universal City Studios LLC, Walt Disney Studios Motion Pictures and Warner Bros. Entertainment Inc. For more information, please visit: www.mpaa-india.org

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