The Need for Regulation of the OTT Industry in India

    The pandemic has brought in some harsh repercussions ranging from fiscal crises, complex mental health problems to uncalculated deaths. The worst of all was the unexpected lockdown which one was compelled to adhere to in the interest of those around us and one’s own health. Thus, being confined to one’s house, one resorted to modes of entertainment which has since then grown manifold. The OTT or the ‘Over-the-top’ streaming industry is one of the fastest-growing industries, not only in India, but globally. Streaming platforms such as Netflix have existed for years prior to the pandemic, but their spread over many countries was dormant until the COVID-19 pandemic forced one to explore the option of online streaming.

    India soon came up with streaming platforms of its own to compete with the two dominant platforms of Netflix and Amazon Prime Video; platforms such as Hotstar, Voot, AltBalaji and many others. However, with the industry’s widespread reach, the content provided is required to be brought under supervision with the help of a several pronged approach: a financial, content regulatory and demographic-related approach. This article will explain the reasons for such regulation, their recommendatory extent, as well as information surrounding the OTT industry in India.

    The Growth of the OTT Industry

    There are various OTT platforms in different categories which are used today by billions of users all around the world, from social media such as Instagram and Facebook to communications such as WhatsApp and iMessage, almost everyone might now use OTT platforms for their convenience. The growth of the OTT industry has been deeply graded with a massive surge in subscribers of streaming platforms such as Netflix, Amazon Prime Video, Hotstar, Hulu, Voot and many other such platforms that enable a user to select from an array of shows and videos to watch for entertainment, informational and educational purposes and many of these platforms can be subscribed at an affordable cost. What entices its users is that each platform has a wide selection from several dialects and languages in various genres and thus contains something for everyone to watch and to be interested in. Algorithms also sharply tailor shows that one might like and project them to be picked by the viewer thus keeping its audience hooked to the screen. This trend is the reason for the colossal surge in its subscribers.

    During the Pandemic

    The COVID-19 pandemic rolled out a plethora of advantages and disadvantages. The discovery of the vast and diverse collection that a streaming platform enables its users to choose from has only been one of the several reasons for its growth. As soon as the lockdown hit, with nowhere to go and nothing to do for several people in the country, the most viable form of entertainment was through social media and streaming platforms leading to multiple subscriptions. Along with offers and discounts which were provided at the time of initial subscription, several internet service providers such as Jio & Airtel also started rewarding customers with free subscriptions, albeit for a specific period. The use of this reward then lures a customer to subscribe to the platform once the reward period is over. The pandemic has resulted in a shift of viewers to online viewing, the surge at about 46% and with cinema halls being closed and new content being added to streaming platforms almost every day, the increase in subscribers has been predicted to grow further [1].

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    The uniqueness of ease and variety makes streaming platforms special. It is the fact that such platforms provide for people from several states speaking and versed with different languages, with subtitles, shows from around the world that the respective audiences are attracted to such platforms. During the lockdown, these platforms provided exclusive content meaning that some companies had shows solely airing on their own platforms, advertising the exclusivity of these shows on various media to attract a bigger subscriber base. Films and movies which had already been made and produced but could not be released into cinema halls due to their closure owing to the COVID-19 lockdown, these movies and shows had to be released on streaming platforms which combined platform exclusivity brought audiences to switch from going to cinema halls to subscribe to OTTs and profited film-makers who were anticipating bigger losses [2]. In this way, OTT platforms became a respite from losses in the pandemic for the television industry as well.

    Besides the above-mentioned characteristics, the shows, videos and films that are streamed are preferred by audiences due to the choice of watching what they want whenever they want – a form of instant gratification. The reality portrayed in shows made and streamed on OTT platforms is much different from those airing on cable-TV and regulated programmes. These shows are “fresher” in their outlook and tailored to ever-changing societies’ tastes. The redundancy of streaming can also be controlled, meaning that audiences can choose to watch the shows that they want and can rewatch the same shows at their own will, unlike shows on cable television.

    Need for Regulation

    Since the OTT industry has recently grown, questions regarding what can be, and how the same vast industry can be regulated. The industry has several advantages over its previous competitors such as television operators wherein shows and videos were regulated, monitored and sometimes even censored to ensure that a standard of viewing was maintained and unbroken. Another advantage is remote viewing, i.e. the availability of streaming on mobile phones and tablets which enables customers to view their favorite programmes from wherever they want. The new age upload and download of online content, on private media companies such as Amazon and Netflix, it is difficult to monitor and regulate in each and every part of the world, what is being watched by different age groups. Moreover, the number of growing subscribers makes it tougher for regulatory authorities to monitor what is being watched and by which demographics. Thus arises the existing question about (governmental) regulation.

    There have been previous approaches to regulate online content but the recent approach focuses more on how to regulate than what to regulate [3], since the online streaming industry is one where thousands of minutes worth of content is uploaded almost every hour. The current situation of competition between television companies and OTT businesses as well as internet service providers is of an unfair advantage. In order to change that, very different regulatory steps would have to be taken. Since OTT businesses are mostly private, and often even form part of huge MNCs operable in several different countries, financial regulations such as taxation become imperative and India is no exception to that. Financial tariffs would help enable better services within the industry itself. For instance, many OTT providers create a huge amount of data traffic which impedes the networks for cable and mobile operators compelling them to constantly work on better infrastructure; meanwhile these OTT operators are not subjected to the same taxation and regulation that is imposed on cable and mobile operators [4]. The latter are also subjected to geographical restrictions along with other safety regulations with regards to data protection while OTT providers are not [5].

    Pricing options can vary depending on the company’s whims when it comes to OTT services as there is a highly unregulated, competitive market for such companies. However, telco-broadcasting companies cannot subject their customers to such varied pricing fluctuations as they once again, are bound by regulatory authorities. In fact, the telco-industry is facing losses as customers switch from metered network services to OTT services such as WhatsApp, Snapchat, and Line. Occupational switches for people working in this industry is also not often an option as they have partial knowledge and little skill in working with OTT services and their ways of operation. This creates a small amount of disadvantage for such workers and even leads to unemployment. Apart from occupational problems, several TV networks are switching to OTT networks and changing their operational structures altogether. A great example of this would be news networks such as NDTV and Times now, as well as video streaming apps for SonyLiv and more.

    India lacks an Act to regulate OTT services and service providers. The Cable Television Networks (Regulation) Act of 1995 provides provisions and rules for what can be transmitted and aired on television, via which networks and who can operate/provide such networks [6]. There is a need for a similar act with regards to the OTT industry, however, the vastness in variety and types of OTTs (for example, communication, streaming and more), pose a challenge in implementing a new act. Thus, the amalgamation of provisions within the Cable Television Networks Act and a set of new regulations as a result of a study of the OTT industry and its operations can form a regulatory basis for this industry. Media trends also suggest that even though OTT operators do not require licenses to stream and upload content on the public internet as of now [7], there might be a time in the near future where these platform operators would require licenses.

    Conclusion

    With the advent of technological advances, a global change in viewing trends was bound to occur inevitably. However, it is only a matter of time before this new content, as well as the way in which it is facilitated to viewers, becomes regulated. With several advantages that come with the OTT service industry to its customers and the profits that it accumulates, trends show a paradigm shift in audiences from cable and network operators to OTT services such as Whatsapp, Instagram and Hotstar among several others. This creates a need for regulation for the content provided by such platforms due to fiscal requirements, occupational and employment problems and diversions as well as for business and governmental purposes. By the time things return to normal, with cinema halls opening up, the OTT industry will still have earned a huge client base, putting other competitive industries at a disadvantage creating a lag and depreciation in its client base. To keep such discrepancies in check, there is a requirement for regulation, and also for the purposes of data protection.

    REFERENCES

    [1] Nandini Parikh, The Emergence of OTT Platforms During the Pandemic and its Future Scope (2020) (Unpublished BA Journalism & Mass Communication dissertation, Navrachna University).

    [2] ibid.

    [3] Ebru Tekin Bilbil, “Methodology for the Regulation of Over-the-top (OTT) Services: The Need of A Multi-dimensional Perspective”, 8 International Journal of Economics and Financial Issues 101-110 (2018).

    [4] Sujata Joshi, Sohag Sarkar, et al., “Impact of the Over the Top (OTT) Services on Telecom Service Providers ”, 8 Indian Journal of Science and Technology 155-156 (2015).

    [5] ibid.

    [6] The Cable Television Networks (Regulation) Act, 1995.

    [7] Scott Fitzgerald, Over-the-Top Video Services in India: Media Imperialism after Globalization (2019) (Curtin University).


    BY MRINALINI MUKHERJEE | O.P. JINDAL GLOBAL UNIVERSITY

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