The Indian over-the-top (OTT) services industry is highly competitive with over 40 online content and video streaming platforms. While a large number of local players are trying to establish their audience, major platforms from the US have also entered the Indian market. According to a recent report by PwC, the Indian OTT market is the fastest growing globally, with a CAGR of 28.6 per cent during 2020-24. At this rate, it is set to overtake South Korea, Germany and Australia to become the sixth largest market worldwide by 2024. Meanwhile, a report by KPMG estimates that the number of subscription-based video-on-demand (VoD) users in India paying for online video content is estimated to touch 40 million by 2025.

OTT players, that started off as providers of content hosting platforms, are now introducing new and innovative services. Exclusive and original content is one of the biggest drivers and a key differentiator in the space. Amazon Prime, Netflix, Hotstar and Voot are competing against each other with their original shows and movies. In order to strengthen its end-user experience, Netflix is planning to invest Rs 5 billion-Rs 6 billion per year in original content. Meanwhile, Amazon will invest about Rs 20 billion in developing original content.

Regulating the OTT space

Owing to the rapid growth of OTT platforms, the subject of content management has gained attention. Of late, the censorship of OTT content, or rather the absence of it, has been in discussion. While some stakeholders believe it is best to leave the space totally unregulated, many feel the need for an appropriate oversight framework. The point of discussion is whether makers are misusing the freedom of content creation.

At present, there is no autonomous body governing digital content or to lay down any programming code for OTT platforms in India. Interestingly, even films released on these platforms do not need a certification by the Central Board of Film Certification.

However, in September 2020, the Internet and Mobile Association of India (IAMAI), a representative body of the OTT space in the country, 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 (MIB) refused to support the code suggested by the IAMAI.

OTTs under MIB

In the past, OTTs have received criticism for the excessive use of abusive language and violence in their content. Some believe that with the significant shift in viewership from traditional media platforms to digital media, it is vital to have an appropriate oversight framework for online content. Besides, lately, the ministry has received several complaints from the public, underlining the concerns of unregulated content. Following the IAMAI’s move to formulate a self-governing body, in October 2020, a public interest litigation was filed in the Supreme Court, questioning the governance of these platforms. In this regard, the apex court issued a notice to the centre and the IAMAI.

Meanwhile, to strengthen its hold over online content offered by OTT providers, in November 2020, the central government issued a notification, bringing digital media platforms under the ambit of the MIB. With this, the policy and regulation of OTT platforms such as Disney+ Hotstar, Netflix, and Amazon Prime Video was taken away from the Ministry of Electronics and Information Technology (MeitY) and handed over to the MIB.

According to the amendment, the MIB will now regulate the online audiovisual 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 audiovisual programmes made available by online content providers; and news and current affairs on online platforms. In addition, the notification 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.

Revision of the Information Technology Act, 2000

Following the move to regulate OTT platforms, the centre is reportedly planning to revise the Information Technology Act, 2000. According to industry reports, introducing new provisions in the IT Act, 2000, will help regulate technology aspects of these platforms. These include the collection of users’ metadata on OTT platforms. The metadata can include users’ personal data such as age, educational qualification, choice of content and time spent viewing or reading it. While the technological aspects of OTT platforms will be under the purview of the IT Act, the content on these platforms will be governed by the MIB.

In a separate development, the IAMAI is planning to come up with an implementation code for streaming services. This code is being positioned as a supplementary resource for streaming services. However, there is still very little clarity on how it would satisfy the government’s central concerns. These concerns revolve around the lack of prohibited content.

Global learning

As India mulls its own approach for OTT regulation, it is useful to look at how other countries around the world are regulating OTT content. Countries worldwide follow a light-touch regulatory approach in order to promote industry competition and growth. OTT platforms in countries like the UK and Singapore come under the purview of regulatory bodies. For instance, Singapore’s media regulatory body, the Infocomm Media Development Authority (IMDA) issued a code of practices for OTT and VoD services. This code has been in practice since March 2018. As per the code, service providers are required to display elements such as, drugs, nudity and violence in the content. However, in the UK, OTT platforms face the same scrutiny as any public service broadcaster. In Australia, there is a principal legislation, the Broadcasting Services Act, 1992, which governs the OTT sector. It is regulated through a complaints-based mechanism and an online content co-regulatory scheme, introduced in January 2000.

The Radio and Television Supreme Council of Turkey is the primary body that regulates on-demand media services in the country. The country has a licensing regime, under which OTT platforms are given a licence for 10 years. It mandates the sharing of the programme catalogue, corporate structure and contact information of representatives of the licence holder. Meanwhile, countries like Saudi Arabia, Kenya and Indonesia look to regulate the space and enforce a strict censorship regime to increase government control.

Conclusion

With regard to OTT regulation, India is weighing both schools of thought. While some support the move to regulate OTTs, many industry experts fear that the change in administrative authority could make the space more restricted and bring in a list of prohibited content and no-go areas. This will stifle creative freedom, and hurt consumer interest and choice. Going forward, it would be interesting to see whether OTT regulation is over-prescriptive or allows room for creativity and imagination.

By Shikha Swaroop