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Lahari cuts price to beat pirates

In May, Lahari stunned pirates with a price cut. A Lahari original now costs just Rs 20.
"We want to thwart piracy and capture our full market," says Velu Tulasiram Naidu, Managing Director.

Tulasiram Naidu
Velu's brother, Manoharan Naidu, founded Lahari 20 years ago. He began by recording favourites from a record player to a tape recorder (yes, it was 'piracy' but he could hardly have heard the word then).

The demand for his cassettes was good, and Manoharan Naidu realised how profitable the recording business was. Within a couple of years he grew rich enough to set up his own label. Lahari today has on its catalogues a staggering 4,800 titles. It is south India's biggest label.

Soon piracy began to erode Lahari's profits. Like other companies, Lahari had priced its film cassettes at Rs 32. Pirates simply made multiple copies after buying an original, reprinted the inlay card with the logo, and sold at the same Rs 32. This meant Lahari got no money from its products, and buyers were deceived into believing they were buying originals.

Another method was to leave out the logo and sell at a discounted Rs 20. The quality of such pirated tapes was poor. Shops pushed them because the margins were better. Sometimes pirates bribed or threatened shopkeepers into selling their ware. "The pirates are strong, and they can get violent. Their clout is frightening," says Velu.

He is confident his new strategy will help change things. "Distributors find no temptation to sell pirated versions when the better original is available at Rs 20," he says. "And no worries about the police raiding them either."

Clearly, Lahari is taking a leaf out of Gulshan Kumar's book. The late T Series tycoon had attempted to fight piracy with a similar price slash some years ago.

Lahari pioneered outright purchase of film-music rights in the south. "Earlier, there was a royalty system, and film producers got very little from the recording companies," he recalls. "We paid a sensational Rs 70 lakh for the rights of Dalapathi."

A Hindi film with an all-India market, Henna, sold for Rs 54 lakh around that time. Dalapathi, a Maniratnam film starring Rajnikanth and Mammooty, didn't do as well as expected, but it launched Velu's recording company into the big league. Lahari later bought Roja and Kadalan, which sold wildly.

Lahari is based in Bangalore. It regulary bids and buys film titles in Kannada, Telugu, Tamil and Malayalam. Non-film cassettes cost less and have a big rural market. Especially the devotionals and folk songs.

But is it cost-effective to sell at Rs 20? "We barely have a margin, but we are determined to attack piracy," says Velu.

Worries of piracy apart, Lahari is coming out with an 18-album collection featuring Karnataka's rare and dying music forms. These include the theatre songs of Subhadra Mansoor and the Kannada and Urdu ghazals of the talented but neglected Ghazal Gundamma.

That will be a rare treat.

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