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A life in film –
Bollywood and beyond

GC takes a look at the thriving – and evolving – Indian entertainment industry, and the lawyers
working behind the scenes.

Entertainment in India

Everyone wants to work in the movies, right? In India, plenty of people do. Figures quoted in Deloitte’s 2016 Indywood report put India as the world’s largest film producer, churning out between 1500 and 2000 a year, and driving a $2.1bn industry – which is expected to reach $3.7bn by 2020.

‘Bollywood’ – the centre of the Hindi film industry, and a play on Bombay, as Mumbai was once known, and Hollywood – is the main feather in the Indywood cap, although films made in India’s other regional languages, particularly South Indian languages Telugu and Tamil, are also abundant.

Famed for escapist musicals and epic love stories, though the industry offers much more besides, the colour, exuberance and creativity of the Indian film scene has meant that in recent years, its appeal has spread far beyond India – across Asia (Chinese audiences are hooked) and into the West, to markets like the UK and US.

Behind the scenes is an army of creative minds, not least a canny band of in-house lawyers, directing the studios and production houses in the legal and commercial side of the movie business.

Historically governed by trust and relationships, this dynamic and increasingly global industry has redoubled efforts to protect every aspect of IP, putting the role of in-house counsel at the centre of commercial life. And in addition to ‘dissecting’ (as Phantom Films’ senior legal manager Persis Hodiwalla terms it) and monetising the intellectual property rights (such as music, satellite, or digital rights) of content, the typically lean in-house teams are required to do much more. As creative and financial partnerships thrive, and with consolidation on the rise, counsel could be called upon to structure and draft deals such as joint ventures with other production houses or directors, licensing agreements, or to ensure that (often hugely high-profile) talent is successfully engaged.

‘On average, each film takes approximately one year to complete, with 150 to 200 agreements. Mainly I am involved in drafting and negotiating actors’, directors’, writers’, heads’ of department agreements, and the below-the-line cast and crew are handled by my team on a daily basis,’ explains Hodiwalla.

‘At times, if we have to quickly turn around a document for hiring a big talent on the film, then it becomes a high-pressure job, as we have to draft and execute the agreements with the respective talents within stipulated timelines, safeguarding our company’s and the talent’s rights and interest in the deal. An actor agreement on average takes six or seven hours to draft, then negotiate, and finally execute.’

In an industry dominated by big names, whose legendary status can be fundamental to box office success, the stakes can be high for general counsel.

Regulation

Lightly regulated compared to other sectors, the lack of standard operating procedures can be a challenge in itself for in-house counsel. But there have been regulatory adjustments in recent years: a 2012 amendment to the Copyright Act redrew, among other things, the boundaries of IP rights in artistic works, while changes to India’s Goods and Service Tax in 2017, which removes the previous tax exemption on the transfer of IP rights – including those relating to film production – placed an additional compliance burden on in-house teams. Incoming policy frameworks for e-commerce and data privacy could also impact entertainment companies, while those operating in the broadcast arena play on a more heavily regulated field to begin with.

One of the biggest headaches for counsel working in India’s content space is censorship.

‘Setting up channels to get them up and running, get all their permissions in place, to make sure that a broadcasting business is set up, is an achievement,’ says Aamod Gupte, group general counsel of Eros International, a major Indian film producer and distributor.

‘You look back and see a channel successfully running today, which has gone through regulatory clearances, security clearances, the actual transmission is cleared, to getting into multiple international deals across satellite providers. It’s a huge responsibility to get that thing done.’

Another pair of eyes

One of the biggest headaches for counsel working in India’s content space is censorship. Under the 1952 Cinematograph Act, all films must pass the eyes – and the guidelines – of the Central Board of Film Certification (CBFC) before screening in India. But in-house counsel charged with getting their studio’s content past the censors uncut often find themselves confronted with shades of grey when it comes to making the right calls. The political, cultural and social overtones of a film are all scrutinised, with different subjects falling out of favour as the climate changes. Religion, and depictions of women and children appear to be sensitive areas at present.

But speculation is now rife that the Act could be in for an overhaul – and so in-house counsel wait to hear whether the whispering will remain just that, or if seismic changes are afoot.

‘We have to read and legally scrutinise the script, and raise a red flag on the scenes/dialogues/products that would require permissions or No Objection Certificates before usage. Then we brief the production team accordingly,’ explains Hodiwalla.

‘On shoot completion, the legal team will watch the entire film once again and mark up the portions that would need permissions before usage, and inform the production team accordingly. Then the production team will get the same resolved before the film is being sent to the censor board for certification.

‘Since each and every film before theatrical release goes through the CBFC, we as in-house lawyers do prepare the paper work as required by them in case of any suggested modifications in the film and ensure smooth processing of the film before the theatrical release.’

A technological twist

Perhaps the major plotline in the Indian entertainment industry, as elsewhere in the world, is technological disruption. For in-house counsel at the cutting edge of technological change, these are exciting times, professionally. In 2011, Hodiwalla was working for Scrabble Entertainment, just when India made the cinematic transition from 35mm film projection to digital.

‘The Digital Cinema Initiative (DCI) is a format which specifies the security and quality standards of digital cinemas to be followed worldwide. DCI norms were established and laid down by the six major Hollywood studios – Sony, Paramount, Warner, Universal, Fox, Disney. Scrabble was the only conduit for the deployment of the required servers and projectors in the theatres that were DCI-compliant in India, the Middle East and Latin America,’ says Hodiwalla.

‘In order to procure content from Hollywood, and exhibit it on the DCI Platform (2K format), Scrabble entered into “Digital Cinema Deployment Agreements” with the six Hollywood studios, and I was the key person involved in drafting and negotiating these contracts.’

Digitalisation has made substantial cost savings for producers and distributors, replacing the need to make 35mm negative prints for each individual cinema screen. Now, a master drive containing the film is cloned, and each screen operator has only to copy, upload and play. One hard drive can cater to multiple screens at a theatre, with only a virtual print fee for the content and transportation due.

But digitalisation comes at a cost to box offices and other channels, as OTT [over-the-top] or SVOD [subscription-video-on-demand] rights are being pre-sold to online platforms 60 days after theatrical release, and to satellite platforms after 90 days.

‘Sometimes the audiences prefer to wait for a film to come out on these platforms rather than going to the theatres with their families, which is expensive for an average middle-class family. This has been a reason of concern for most of the major multiplex owners in India,’ Hodiwalla says.

Eros International is focused on the opportunity afforded by digital platforms, however. The company has an online digital platform (ODP) of over 11,000 films and is engaged in producing a range of original content specifically for a digital audience.

‘The fact is that we can’t run away from technology – it’s going to catch us sooner rather than later. The more one accepts it, the more one embraces it, you’re actually ready for the future, rather than keeping lamenting about things. It’s something which we are excited about, actually,’ says Gupte.

‘The ODP platforms are the drivers today. The falling price of mobile data and access to good, high-speed broadband and wifi makes them easier to access. So the trend we find is people actually moving subscriptions straight to the ODP platform. It’s much more convenient and what this generation loves is: it’s on demand.’

For those living outside India’s metropolises, who might not have access to a multiplex, mobile data-streaming has opened up huge new markets for entertainment content.

Piracy

The digital space can be full of risk, not least the damaging impact of film piracy. In India, the theatrical window is short, raising the stakes for a film’s opening weekend. Competition from a huge range of platforms means that the days where studios could luxuriate in a lengthy and profitable run as the only source of entertainment for a family are over.

‘There is a huge amount of money that one has invested for production, marketing and promotion, and all of that gets affected when pirated copy leaks onto the net within hours of the first theatrical release,’ says Aamod Gupte, group general counsel of Eros International.

‘Illegitimate platforms are the worst, because they are the ones where we add no value. It makes content available for free, and it’s not the best quality of content but, unfortunately, because it’s a price-sensitive market, people do log into freebies.’

Unsurprisingly, the whole industry is scrambling to devise ways to combat piracy. And while digital devices have made it easier than ever for copyright infringers to make high-quality recordings in theatres, technology is also providing solutions. Equipment providers such as Scrabble, for example, are building security measures into their software, including ‘watermarking’ or tracing of pirated copies.

‘The DCI Platform was designed to meet US military specifications. The contact is a two-way password – twice as secure as an ATM banking transaction. The content designated for one particular screen in essence will not play out in another screen even within the same location,’ says Persis Hodiwalla, senior legal manager at Phantom Films.

And of course, when protecting the huge investment that goes into new cinematic releases, there’s the good old-fashioned legal route, as in-house teams work to try and stem the flow of illegal leaks at source – anti-piracy clauses in distribution agreements, for example.

‘We make sure that all of that is trickled down to the grassroots, because the piracy does seem to have origins in the grassroots: it could happen from a theatre, it could be from a lab, it could be from a source who is making a camcording of the actual print,’ explains Gupte.

Inevitably, however, copies do make it to potentially large audiences and, when they do, court orders can be another tool in the arsenal of production houses and their legal teams.

‘The first thing I do, I always go and get a John Doe order, which is an injunction against piracy – it’s something which helps the telecom operators, the ISPs, in the country to quickly bar any illegitimate copies,’ says Gupte.

‘The law is a little unfavourable to producers because it does not give the ability for ISPs to quickly strike down content without a court order. So if you go to the court and get your injunction in place first, then it’s much simpler for the ISP, which doesn’t feel that it’s going to do something that might later be taken up as a contravention on its part.’

Another form of action is to use specialist monitoring agencies to identify offending URLs, which can then be taken down.

‘A John Doe order is of no consequence if I don’t actually follow it up with an action. So we have takedowns instantaneously, on a 24/7 basis, for the theatrical window,’ says Gupte.

The future of entertainment in India, as with elsewhere, appears to be online although it’s important not to forget that the cinema is as beloved as ever in the country. And consumers of entertainment in India continue to be spoilt for choice.

As platforms proliferate, innovative and original content springs up to populate them, and the regulatory frameworks evolve to both protect and police them, the entertainment industry looks set to remain an exciting place for its in-house lawyers.

‘Tier two and tier three towns have a humongous amount of data which is consumed. The smartphone, for me, is the equaliser. It’s brought your cities, your tier two towns, your tier three towns all at par,’ says Gupte.

‘Devices are really improved in terms of their pixels, intensities, their colours, and it’s a really nice experience for somebody who’s not in a big city to sit and watch content across the genres and the platforms that he likes, in a language he is comfortable with. So at Eros, we have multiple-language productions, plus we have dubbing and subtitling in multiple languages.’

At Eros, Gupte sees a demographic difference between theatrical and digital audiences, and content made for a younger, online-only audience opening up the industry creatively, as short films and other experimental content disrupt the traditional model of the full-length, multiplex-screened feature film.

‘You are able to experiment a lot more in the ODP space – you can try new stories and experiment with newer actors. The themes can be different, stories can be told in different, interesting ways, you can try out new directors with a new vision. You can actually take a chance,’ he explains.

‘There are many directors out there wanting to tell their stories, but everybody does not get the break on the silver screen. Now the small screen is their area, and today you don’t need high-end, fancy equipment, as long as you tell the story in an interesting, engaging way. You have a lot of content that otherwise would not have seen the light of day because a film studio or a big movie might not have been the most suitable platform. Something which is a little bit off the regular track, which is not in the regular mode, can give a break to multiple talented people across multiple languages and multiple cities.’

From risk to risqué?

The potential for pushing boundaries in online content is enhanced by the relative freedom enjoyed by digital-only entertainment compared to films, which fall under the yoke of the CBFC. Sitting behind a paywall, with the potential for in-built levels of control such as parental locks, on-demand content is inherently more secure than live media.

‘It is not something that is out there in the open. The customer or viewer chooses to come to your platform for the kind of content which you carry – he or she can choose to walk out or opt out,’ explains Gupte.

‘With the freedom of watching it within the four walls of your own house, that’s a private viewing, so legally you are far more in control of the content than in a situation like broadcast, which is available to anybody who’s opening up their television set and watching.’

But the industry is not leaving it to chance – or to government intervention. Broadcast industry bodies are working to come up with self-regulation guidelines.

‘We will decide that these are the boundaries within which we will operate, and these are the parameters which we will follow, so that the customers, the viewers and the platform subscribers are protected – they feel less threatened,’ says Gupte.

‘It’s best to let your viewers know that they are likely to encounter certain types of content and it’s their choice. You can choose to continue, you can go ahead and watch it. If you don’t want to watch it, you can always opt out. There’s no compulsion.’

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