Pirates of Bollywood have producers running for cover

Time of India

7 hours ago

Hindi film producers are increasingly seeking insurance against piracy-related losses, especially for big-budget films, due to significant financial setbacks. Insurers are hesitant to underwrite this risk because quantifying piracy losses is challenging. While some advocate for stricter anti-piracy laws, others believe insurance could make producers complacent, adding to existing funding challenges within the industry.
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Hindi film producers are increasingly seeking insurance protection against piracy-related losses, particularly for big-budget films, amid reports of significant piracy losses. However, insurers are hesitant to underwrite the risk, industry insiders said.The issue of piracy has come into focus following reports that producer Sajid Nadiadwala suffered estimated losses of ₹91 crore due to a leak of Salman Khan-starrer Sikandar, which was released in March.The film is insured for standard production and liability risks with New India Assurance , people aware of the matter said. However, losses due to unauthorised copying and distribution are not standard inclusions, they noted."Studios working on high-budget releases have approached us for piracy cover, particularly during the final edit and digital transfer stages," said Sumant Salian, business head of media and entertainment at Alliance Insurance Brokers. "The fear of content leaks before release is growing."According to a recent Media Partners Asia report, if piracy remains unchecked, revenue losses of the digital video industry in India are likely to double to $2.4 billion, or about ₹20,565.5 crore, by 2029 from $1.2 billion in 2024."Piracy continues to impact revenues. It is crucial that producers put in an explicit clause covering anti-piracy losses and enforcement costs while opting for film distribution insurance ," said Suniel Wadhwa, a veteran film distributor. "There are discussions going on between producers and insurance companies to obtain cover for film piracy," he said.However, while the demand for piracy cover is both legitimate and increasingly urgent, insurers face significant hurdles in addressing it. For one, it is difficult to quantify losses due to piracy, they said."There is demand for piracy cover, especially after the piracy of Hindi films such as Double Dhamaal (2011) and Udta Punjab (2016). But insurers are reluctant to underwrite first-party piracy risk, as it is difficult to quantify and prove losses," a senior executive at an insurance broker said, requesting anonymity. "Unless a policy is explicitly structured to protect a producer from film piracy and associated losses, an insurance company would not respond," the executive added.Some producers believe that they should combat piracy through systemic changes rather than relying on piracy insurance coverage."I think we need to fight piracy by bringing in stringent laws instead of recovering losses from piracy cover. Piracy is deeply entrenched... I think a piracy cover will make producers complacent," producer Rajesh R Nair said. "Also, a piracy cover is an additional cost to producers at a time when there are funding challenges. Granting the industry 'industry' status can eradicate these problems," he added."Pirates typically target big films," Nair said.In India, the film industry typically relies on two main types of insurance - for production and distribution. Film production insurance typically covers delays, cast or crew illness, equipment damage, and liability under errors and omissions (E&O) policies. Film distribution insurance, on the other hand, protects against damage or loss of film prints or digital masters, delays in theatrical releases, business interruptions, and losses arising from leaks or piracy before release or during the early stages of digital roll-out.