The T-Series Story

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T-Series & Music Piracy Contd...

In the late 1970s, cassette players flooded the country, many of them being Japanese 'two-in-ones' (radio and cassette player) brought in large numbers by workers returning from the Gulf states. In 1978, with the Indian government liberalizing the import and export trade, new kinds of luxury consumer goods appeared in the market. These goods were popular with the rapidly growing middle class population. Cassette players (and consequently, cassettes) were one such new item that quickly became popular in the country.

Compared to the LP records, cassettes were incredibly cheap to produce and reproduce and could be easily distributed and transported. Gradually, a large number of outfits began setting up illegal copying operations. Most copyright violators chose old Hindi film songs from the GCI catalog. All that was required to run a copying outfit were two cassette players and a supply of tape, spools and cases. Since the bootleggers paid no royalties and no excise and used cheap cassettes, they were able to sell their products at half of GCI's prices. By the mid 1980s, cassettes reproduced in this fashion accounted for a significant portion of the music sold in India. A major part of this piracy industry was reportedly owned and operated by T-Series. In the late 1970s and early 1980s, audio cassette production was defined as a small-scale industry (SSI). Thus, Gulshan was able to take advantage of the subsidies, loans and all the other incentives accruing to the SSIs. The only capital expense the company had was the cost of the cassette - Rs 7 - and the cost of duplicating.

This cassette was retailed at about Rs 25. On the other hand, GCI and MIL cassettes retailed for Rs 36-45, as the companies had to pay, in addition to royalties, an excise duty of 15 % on every cassette. As T-Series did not pay any excise duty, the entire 15% benefit was passed on to the customer. Gulshan also kept his dealers/retailers as happy as possible - if a T-Series cassette was found to be defective, it was instantly replaced. Super Cassettes never became a member of the IMI⁵, and therefore, was under no obligation to follow the organization's guidelines. The company quickly emerged as the biggest competitor to GCI, which even came close to winding up its operations.

By the mid 1980s, T-Series had reportedly stopped the pirated recording business and 'shifted' completely to the legitimate businesses. However, controversies continued to dog the company, with Gulshan coming out with the idea of 'cover versions.' Cover versions were albums that used the musical compositions as well as the lyrics of original well-known Hindi film soundtracks. Fresh recordings were made using the same compositions and lyrics, but with a different orchestra and singers, from the ones used in the original.

These recordings were then sold in the same market in which the original soundtrack albums were sold, in most cases with the same title. While some parties took permission before making the recording, others merely sent notices, as required by Rule 21 of the Copyright Rules Act 1958, along with a cheque for a paltry sum towards royalty for the literary and musical works. Cover versions were considered to be legal as long as the makers had acquired permission from the original music companies. The Supreme Court had passed a directive that cover versions done after a period of three years from the release of the original music score were legal.

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.

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5] The Indian Music Industry (IMI), originally formed in 1936 as the Indian Phonographic Industry, was the recognized trade association of the sound recording industry in India. The association comprised over 50 music companies including both Indian companies and Indian licencees or subsidiaries of international companies. One of IMI's main functions was protecting the rights of producers and fighting the piracy menace.