The over-the-top (OTT) sector in India has witnessed unprecedented growth in recent times. The outbreak of the Covid-19 pandemic and the consequent lockdowns nationwide have provided a further impetus to this growth. The pandemic was a game changer as most OTT platforms witnessed an extraordinary increase in the subscriber base with people being forced to stay at home for months. As a result, video streaming platforms such as Netflix, Amazon, Hotstar, Voot and SonyLIV gained immense popularity in India. Furthermore, the lockdown norms made it impossible for movies to be physically released in theatres. Thus, big production houses moved to OTT platforms for their new releases, further driving viewership.

Given that the OTT industry is growing at a rapid rate, various telecom operators have also been making positive strides in launching new initiatives or forging key partnerships in this space.

While the industry is seeing impressive growth, there have been discussions around regulation. Until recently, no strict OTT regulating rules or norms were present in India. However, this is set to change as the government has announced the implementation of new IT Rules for OTT players. Since the announcement, there has been a lot of discussion and debate

around the likely implications of the new rules for the OTT sector.

A look at some of the recent developments in the OTT space, the key regulatory moves and the way forward…

Telcos up their OTT game

The OTT segment is fast emerging as a lucrative avenue for telecom operators. As such, telcos have been aggressively forging partnerships and taking initiatives in this space. For instance, in February 2021, Bharat Sanchar Nigam Limited (BSNL)

launched a single subscription video streaming platform, YuppTV Scope, in partnership with YuppTV. Under the partnership, BSNL will offer bundled OTT services to broadband and fibre-to-the-home subscribers as a triple-play offering. The video streaming platform will also cater to cable TV users. With this, BSNL subscribers will be able to access premium OTT apps such as ZEE5, SonyLiv, Voot and YuppTV through YuppTV Scope on their PCs, smartphones and smart TVs.

Meanwhile, in April 2021, Airtel partnered with Firework to expand its short videos initiative. As part of the deal, Airtel’s flagship app Airtel Thanks will showcase 30-second vertical videos from Firework on its app. Prior to this, in January 2021, Airtel had collaborated with Amazon Prime Video to launch Prime Video Mobile Edition, a mobile-only plan, at an introductory price of Rs 89. Prime Video Mobile Edition is a single-user mobile-only plan, providing SD quality streaming to customers. It has been introduced for a mobile-first country like India.

On its part, Vodafone Idea (Vi) announced a partnership with OTT content player Hungama to launch a premium video-on-demand (PVOD) service on the Vi Movies and TV app in February 2021. This partnership is aimed at expanding the digital ecosystem in India. It will allow Vi customers to watch more than 380 movies in four languages – Hindi, English, Tamil and Telugu. Like Airtel, Vi has partnered with Firework. The collaboration was announced in December 2020 and the partnership allows Vi to leverage Firework’s massive content repository from global content studios and get access to unique occupational generated content creators who are expert storytellers across a wide range of subjects.

Reliance Jio too has been actively engaging in the OTT space. In March 2021, the telco partnered with Firework to offer vertical video stories to its over 100 million KaiOS users in India. With this, Jio has made Firework’s vertical video stories available to KaiOS users under the Jio Developers Growth pad. This will make Firework native in all Jio KaiOS phones. Moreover, Firework has been integrated in the Jio Browser and users will be able to experience the app through the Discover tab. Earlier, in June 2020, Jio had partnered with ZEE5 to offer bundled services to its JioFiber customer base. As part of this partnership, JioFiber has been providing complimentary access to ZEE5’s library of over 4,500 movies and 120 originals to its customers.

Evolving regulatory scenario

Given the growing OTT viewership and usage, the government has been looking to set norms and regulations for OTT platforms. To this end, in February 2021, the Ministry of Electronics and Information Technology notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 to govern the digital media industry, comprising social media digital news and OTT platforms. The rules have been framed under the Information Technology Act, 2000, and will supersede the 2011 guidelines for internet intermediaries.

For OTT and online news platforms, the rules lay down an ethics code that will be administered by the Ministry of Information and Broadcasting. OTT players will now be subjected to a three-tier grievance redressal process. This will include a government oversight mechanism. As per the guidelines, OTT platforms will be required to self-classify their content into five age-based categories – U (Universal), A (Adult), U/A 7+, U/A 13+ and U/A 16+. Besides, for content classified as U/A 13+ and above, there should be a parental lock mechanism.

Following the enactment of the new rules, in May 2021, the Ministry of Information and Broadcasting had written to the OTT and digital media platforms, asking them to furnish all their details and compliance status as per the new IT Rules within 15 days.

Prior to this, there was also discussion around the censorship of OTT content. At present, there is no autonomous body governing digital content or any programming code for OTT platforms in India. Interestingly, even films released on these platforms do not need certification from the Central Board of Film Certification.

Industry response to the new IT Rules

The recent release of the new IT Rules to govern the digital media industry, including social media platforms, OTT platforms and digital news portals, has sparked an industry-wide debate on whether these rules would be beneficial for the country’s social media ecosystem or restrict access to the internet in the country. While some industry experts are of the view that these rules violate the fundamental rights of speech, expression and access to information, others believe that the new IT Rules address the lack of a data protection law in India and, in doing so, provide users with a complaint mechanism.

Other key developments

Earlier, in September 2020, the Internet and Mobile Association of India (IAMAI), a representative body of the OTT space in the country, had suggested a self-regulatory model for these platforms. The IAMAI suggested a two-tier structure as part of the self-regulatory regime, the second tier being the Digital Curated Content Complaints Council, along with the enumeration of prohibited content. The code was supported by 15 OTT players including Netflix, Amazon Prime Video, Disney+ Hotstar, ALTBalaji and ZEE5. According to the IAMAI, the regulatory code would give more choice and control to consumers as it includes access control tools and a framework for age classification and content descriptions for titles. However, the Ministry of Information and Broadcasting has not lent its weight to the suggested code.

Meanwhile, to strengthen its hold over online content offered by OTT providers, the central government in November 2020 had issued a notification, bringing digital media platforms within the ambit of the MIB. According to the notification, the MIB is the regulator for online audio-visual programmes and current affairs content. As per the notification, the government amended the Allocation of Business Rules, 1961, by inserting two new entries, 22A and 22B, to the second schedule of the rules. The second schedule of the rules has a total of nine categories, which deal with broadcasting policy and administration. The two new entries are films and audio-visual programmes made available by online content providers; and news and current affairs on online platforms. The notification also includes a new subcategory, VA, under the category of films. The government is yet to shed light on what the move entails for OTTs and news content curators.

The way forward

According to a report by RBSA Advisors, the Indian video OTT market will grow from $1.5 billion in 2021 to $4 billion in 2025 and $12.5 billion in 2030. The audio OTT market is also expected to grow by $2.5 billion by 2030 from $0.6 billion in 2021. As per the report, the next wave of growth in the OTT landscape will come from Tier II, III and IV cities. Further, better networks, digital connectivity and smartphones will continue to support the OTT growth in India.

By Diksha Sharma