Indian Government Regulates OTT Platforms

The latest Media and Entertainment Outlook 2020 report by PwC states India is currently the world’s fastest growing OTT market, and is positioned to become the world’s sixth-largest by 2024. This means India is likely to overtake South Korea, Germany, and Australia in OTT revenue. Sizable investments by Netflix, Amazon, Disney+ Hotstar and other players in both originals and licensed content is expected to make up 93% of total OTT revenue.

This is good news in terms of consumer choices. It also means that with the increased flow of content, the supply chain starting from content production to content release needs to be robust enough to keep pace in the country. Therefore, the recent move by the Indian Government to regulate OTT platforms under the Information & Broadcasting (I&B) ministry may create some roadblocks in India’s OTT landscape.

India has resisted regulation of the OTT space and no laws or rules exist regulating OTT platforms. It is a relatively new medium of entertainment, classified as digital media. Unlike traditional media such as television, films, print or radio, which follow government guidelines under the direction of various regulatory bodies, OTT enjoys a free run. However, there have been frequent calls for censorship of online content by various political groups and social organizations. Shows like Netflix’s “Leila” and “Sacred Games” have invited the ire of certain groups leading to court cases asking for bans or regulation of streaming content. As a pre-emptive measure, in January 2019, nine streaming services in India announced a self-regulation code under the aegis of the Internet and Mobile Association of India (IAMAI). The code settled on some “best practices” to avoid government-led censorship. However, the government indicated that this might not be enough and started holding consultations on the subject.

Consequently, in February 2020, the IAMAI drafted a new code. At the Government’s insistence, a Digital Content Complaints Committee was created to serve as an appeals body that can penalize OTT players. This did not sit well with some of the OTT services indicating lack of consensus and adequate consultation within the IAMAI. In September 2020, the organization prepared a third version of the self-regulatory code. Signatories include 15 international and local platforms on board viz. Netflix, Amazon Prime Video, Disney+ Hotstar, ALTBalaji, ZEE5, Arre, Discovery+, Eros Now, Flickstree, Hoichoi, Hungama, MX Player, Shemaroo, VOOT, Jio Cinema, SonyLIV and Lionsgate Play.

The ministry of information and broadcasting asked IAMAI to consider other self-regulatory models since the government does not support the current one. The letter stated “The proposed self-regulatory mechanism lacks independent third-party monitoring, does not have a well-defined Code of Ethics, does not clearly enunciate prohibited content, and at the second and third-tier level there is an issue of conflict of interest.”

In a far-reaching move, a gazette notification issued Nov. 11 and signed by the president of India, online films, digital news, and current affairs content were brought under the purview of the Government’s I&B Ministry. With the government’s decision to regulate online content providers, the challenge for the OTT platforms would be keeping a check on their content. It is also likely that they would have to apply for certification and approval of the content before streaming. This could give rise to many conflicts as most OTT platforms showcase content that would otherwise be censored by the certification boards in India.

No specific guidelines have been announced as yet, but it is known that the Programme Code governing TV content and which found an outlet in the Cable Television Network Regulation Act, 1995, may serve as a template to frame rules for online content. So, while the industry waits for more regulatory guidelines from the I&B ministry, OTT platforms are likely to resist any plans to censor content being streamed in India citing infringement of creative freedom.