T-SERIES & MUSIC PIRACY

Initially, Gulshan's cover versions featured only old Hindi film songs. Gulshan got unknown
singers to sing these as their rates were low and Gulshan was able to make good margins on the
overall deal. Soon, he began making cover versions of new movies as well. Though the cassettes
always made it clear in small print that these were not the original recordings, the consumers
were not always savvy enough to read the small print.

During the early 1990s, Gulshan released a number of albums featuring religious songs. These were
fairly successful. He even acted in, sang for and directed a few of the videos of such songs. These were
run on the state-owned television channel Doordarshan. T-Series also began producing Hindi films. One
of the company's first ventures, the musical 'Aashiqui,' was a huge success. This was followed by many
more movies, a majority of which flopped. However, the music of these movies was a success in almost
all the cases. The success of 'Bewafa Sanam,' one of the many mediocre T-Series movies starring
Gulshan's actor-brother Kishen Kumar, took the whole industry by surprise. Gulshan even invented the
concept of the 'music bank' where tunes were stored till a movie or a record was identified to 'fit' them
into.

Things were going on rather smoothly - till Gulshan released a cover version of what was reportedly one
of India's biggest blockbuster movie, 'Hum Aapke Hain Kaun' in 1997, violating the three-year waiting
period stipulated by the Supreme Court. This time around, the attack on GCI's profits was too strong to
be ignored and the company filed a suit against T-Series. In the same year, a few music industry players
approached the former finance minister V P Singh, demanding that Gulshan be punished for violating
copyright laws and pirating music. However, V P Singh reportedly6 dismissed them saying, "Don't come
to me with your hard luck stories. You've no marketing strategies so you haven't discovered the
marketplace. Gulshan has. And you want me to punish him for his entrepreneurial ability?"

As the 'Hum Aapke Hain Kaun' case went to the courts, Gulshan was murdered. With Gulshan's death
began a period of uncertainty for the T-Series group. The music company was not doing very well as
Gulshan had stopped buying music rights from outside7 and the T-Series' films had failed. The other
businesses were all relatively new and not yet well established. There were reports of infighting in the
family regarding the control of the various businesses. Saregama, Tips and Venus, who had emerged as
the leading players in the Hindi film music segment, had also ventured into film production. Though
Saregama's movies did not do well, quite a few Venus and Tips movies were huge successes.

The December 1998 Delhi High Court ruling in the 'Hum Aapke Hain Kaun' case, which put an end to the
cover version recordings, was the biggest blow to T-Series. The High Court order said that the makers of
version recordings relied upon a special provision of the Indian Copyright Act [S 52(1)(j)]. Taking
advantage of this provision, the pirates claimed that copyright owners of the compositions and lyrics
were only entitled to a statutory license fee. They also said that once the owners received the license
fee, they had to allow the fee payers to make sound recordings.
The Delhi High Court held that there was no provision for such automatic licensing and the sound
recordings could be made by third parties only after they had obtained permission from the copyright
owners. The Court held that under the Copyright Act, assignments and licenses could only be made in
writing. They had to be signed by the assignor/licensee. As GCI had categorically refused to grant a
license/assignment in favor of T-Series and had also returned the cheque for the royalty amount sent by
T-Series, it was able to win the case.

THE UNSOLVED PROBLEM

Though GCI had won this case against T-Series, the problem of music piracy still plagued the
industry. The music companies were handicapped by the legal definition of copyright violation
wherein piracy was not a cognizable offence. The companies had to prove that cassettes were
being pirated before getting a warrant of arrest. According to certain reports, music pirates were
always tipped off about police raids in advance.

The nexus between the film/music industry and the Dubai/Mumbai underworld was another
problem. The mafia controlled a large portion of the Mumbai music piracy business. This nexus
was so strong that after an IMI raid in the early 1990s in Mumbai, IMI officers were beaten up
and its Mumbai office was destroyed. After this, all the markets in that area were closed for 15
days in protest against the raid. According to IMI estimates, almost 95% of the distributors and
dealers were involved in piracy and on an average, only 40% of the stock was genuine. Analysts
claimed that except for giving leads to the police and initiating raids on pirated music vendors,
even the music companies had done precious little to curb music piracy.

The problems associated with the distribution network in the music business also substantially
helped the pirates. Market observers claimed that around 50 distributors had an absolute control
on the music industry's distribution network.

Distribution was the most profitable part of the music business. The average cost of a cassette for
the distributors was Rs 19. The selling price ranged from Rs 38 (large retailers) to Rs 44 (small
retailers) for a cassette. The retailers added their own margins to the price. The price for the
customer thus ranged between Rs 50 and 60. The problem was compounded by the fact that in
the case of film music, if supplies were not made available immediately, the demand shifted
either to pirated cassettes or to some other album that was easily available. Thus, it was
imperative for the music companies to sell in bulk to the distributors.

The companies realized that they had a lot to gain by bypassing this network. The logical
solution, though time consuming and costly, was to set up their own music stores. The biggest
initiative in this direction had come from Saregama, whose owners, the RPG group had
successfully established the Music World chain of music retailing outlets all over the country.
The emergence of organized music retailing outfits like Planet M and Internet based stores such
as fabmart.com was expected to help the companies improve their performance.
GULSHAN - PIRATE OR MESSIAH?
Indian film music lovers have always regarded the decades prior to the 1980s as the 'golden era'
of Hindi film music. During the 1980s, there was blatant and sub-standard copying of
international music. In the late 1980s, videocassettes became extremely popular among India's
upper class and upper middle-class families. As these people began watching the latest films in
their homes, video piracy became rampant.
 

Now it were the lower classes that could not

afford to buy color television sets and video
players or recorders, that went to the theatres.
Hence, films were made to cater to their tastes.
These films were invariably medicore and the
music was of very low quality.T-Series was
given credit for bringing the music industry out
of this decline. Many critics praised Gulshan's
unerring instinct in picking up saleable music.
Some of the films for which Gulshan procured
the music rights in the early 1980s went on to
become huge successes. Almost all these
movies featured melodious music, bringing back
the sounds of the pre-1980s era.

Gulshan's supporters held that till he came

along, GCI and MIL had been virtually looting
the consumer by charging absurdly high prices
for music cassettes. Gulshan had done the
customers a great service by making cheaper
cassettes, and retailing them through small
shops all over the country, thus making cassettes
affordable and easily available even to the
common man.

T-Series even took back unsold cassettes (to re-use the shells as well as tapes) so that these small
retailers would not suffer losses. Gulshan was also lauded for promoting fresh talent8 through
the cover versions. (Interestingly enough, after Gulshan's death, the prices of audiocassettes
increased in the late 1990s.)

Noted media personality Pritish Nandy said, "He may have made some money through cover
versions and piracy. But what is more important is that he benefited listeners, expanded the
market and created a galaxy of new stars. He broke, in that sense, the existing monopolies and
drove hard and fiercely a sloth, decadent, exploitative market to make it boom. But, like all
swashbuckling pioneers, Gulshan Kumar got a bad name for doing it first."

The fact remains that while the music pirates made huge profits for themselves, they
inadvertently ended up benefiting the music industry as well. Since their entry in the 1970s, the
industry had more than quadrupled in size. Not surprising therefore, that some say the Indian
music industry 'owes its growth to the pirates.'

QUESTIONS FOR DISCUSSION:

1. Why do you think Super Cassettes became so successful in the early 1980s? Do you agree that
the inaction of the then market leaders contributed to the growth of music piracy?

2. Though piracy and cover versions were ethically and/or legally unacceptable,they aided the
growth of the music industry and promoted fresh talent.Critically evaluate this statement, with
particular reference to the T-Series story.

3. Analyze the problems being faced by the Indian music industry. As the manager of a music
company in the organized sector, what strategies can you adopt to curb piracy?

ADDITIONAL READINGS & REFERENCES

1.Satish M M, I made raids newsworthy, TV & Video World, May 1996.
2.Rush Susan, The War Against Piracy, www.tapediscbusiness.com,October 1996.
3.Gulshan!, www.rediff.com, July 12, 1997.
4.'Piracy?... Ji, hamare business mein to yeh sab chalta hain,'www.rediff.com, July 12,1997.
5. Pall descends over Super Cassette, Business Standard, August 13,1997.
6.Life in the twilight zone, www.rediff.com, September 2, 1997.
7.Gulshan Kumar:Analysis, www.studio-systems.com, September 1997.
8.Gulshan Kumar just couldn't help himself. He had to steal,'www.rediff.com, September 2,
1997.
9.Schalit Joel & Sterne Jonathan, Sample My Privates,www.eserver.org, December 1998.
10. Joshi Pankaj, New melodies, but still tuneful, The Financial Express,December 13, 1999.
11. Lall M Chander, INDIA spruces up its IP regime and
enforcement,www.indiaip.com,1999.
12. Nandy Pritish, Is Taurani guilty? www.rediff.com, September 14, 2000.
13. Indian film music has worldwide market but... www.screeindia.com, May 18, 2001.
14. Krishna Sanjay, Music piracy in India - Music companies to blame,www.boloji.com,June
21, 2001.
15. www.dotexplaza.com, July 31, 2001.
16. Vijaykar Rajeev, The Eighties - The Good, The Bad And The Ugly,www.indiatimes.com.
17. www.t-series.com
18. www.screenindia.com
19. www.indianmi.org
20. www.indiainfoline.com

[8] Analysts claim that the real reason for bringing in fresh talent was the fact that they were
cheaper and
easier to access. The Hindi film music industry was considered to be a monopoly of a few
singers, notably the Mangeshkar sisters, Lata and Asha. Gulshan reportedly brought in new
singers in order to break this monopoly.