Organization Espresso

If you have lived or live in India, the street vendors who sell the pirated movie CDs or DVDs or the MP3 CDs would be a part of your everyday landscape. This holds true even more for the vendors in the tier 1 cities. There are couple of things which I really admire about this industry despite it being completely illegal.

Firstly the Piracy industry in India brought an absolute change in the Music & Entertainment industry. Calling it a perfect example of marketing myopia would be stretching it too far but then it would be close. It is interesting to observe how this particular Piracy Industry had far fetched effects on the Pop Albums, Old Age Cinema and Music as a whole. On a direct competition Piracy industry almost ruined the music sellers (the companies selling tapes and CDs like Sony, Venus, Tips, T Series, HMV etc.), though the concept of MP3 is not Indian but the credit of taking it to the masses goes to Napster in US and the Piracy industry in India. I don’t think the authentic or original Music industry has been able to tap even the tip of the 1.1 billion individual market of India.

Coming to the indirect effects of the Piracy industry, pop music industry has almost gone out of bread & butter. The industry which was a rage in years 1997-2000, when almost everyone including Tom, Dick & Harry seem to have released a pop album. The fact that the pop music industry depended on the sales of the CDs and tapes for their revenue and profits, it took a minuscule amount of time for the Pirates to release the albums on the pirated CD along with 100 other songs. So the erstwhile Pop Albums have lost their way and you don’t see too many of them too often these days, interestingly the killing of pop albums also generated a new genre of entertainment in India, The Reality Shows. It would be unfair to say that the concept was born at this time, Sa Re Ga Ma & Meri Awaz Suno are old singing based reality shows. But the decline of pop music industry brought a huge wave of talent to the television reality show and today almost every channel national or regional has a singing, dancing based reality show.

Now coming to the other quality of the Piracy industry which I find admirable; and also relates to my area of expertise supply Chain. If you would check most of the pirated discs available in India the source would be tagged as a website. What amazes me about this industry is the agility in the entire supply chain; the moment a major movie’s music gets released the next day or the day after you would be able to buy the MP3 for that movie from the street side vendor.

I admit that I have not been able to have a direct visit or first experience of this supply chain. But from the information available about the market, the creation of a CD/DVD has to be a central activity with may be regional hubs, as the high speed recording instruments are the most expensive and bottleneck parts of the supply chain. Imagine what all activities would have happened during this time.

Procurement of the blank CDs and Polyurethane covers (I believe they would be keeping a stock inventory)

Planning what titles to be a part of what compilations (this when they don’t have any official control or information on release dates)

Printing of Labels which would display all the movies which are the part of the compilation

Actual Burning of the CDs.

Packaging the labels, burnt CDs into the Zip Lock Polyurethane bags.

Distributing the CDs throughout the chain, to the last link of the retail vendor which sells it to the customer on the street.

Almost all of this activity generally happens in a little span of time after the music release, and I have never seen a blackout when asked for a new song’s MP3, it is easily available and at all points of time. To add the flavor, this whole operation is supposedly under cover with utmost secrecy.

If you look at the coverage of the distribution network, I really think these pirated CD folks are close to HLL and P&G of the world. One can travel to the length and breadth of the country and the pirated discs of all kinds are available by the highway sides, in the small towns and villages. Interestingly this efficient and robust distribution system is officially unorganized. There are no ERPs & IT for the good’s tracking, no high flying MRP & demand planning systems for forecasting. The disruptions like police raids etc are far more frequent and far more disruptive as what a normal manufacturing or distribution firm would face. The efficiency of the entire value chain despite the odds against it is simply commendable.

Do you think the highly sophisticated distribution & manufacturing systems have a thing or two to learn from this Piracy Industry, especially from a process perspective?

Disclaimer: I do not support any kind of Piracy, this post is written with an objective to identify the positives and best practices followed in a business which is not legal by nature.

by Prats | on Thursday, March 10th, 2011 at 10:15 am | General Management, Supply Chain . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.