Rs 8,000 cr online streaming industry stares at regulatory challenges

The first part of a series looks at streaming video as a regulatory regime for online content is being put in place

A kiss, a love story, meat on the table? It's not clear what can offend people's sensibilities. They are all over social media, filing public interest litigation (PILs) and are issuing calls to ban, maim or kill a film, show, or a celebrity every other day.

Will a content code stop them? Should we be afraid that the regulation their clamour pushes through will inhibit the wonderfully different programming on offer by streaming brands such as Netflix, Amazon Prime Video or Voot? Why aren’t Google, Facebook, YouTube et al a part of this regulatory sweep? As the government and industry frantically put together a regulatory architecture around digital (entertainment) content, these are the three main questions that arise.

Code Red

Take the first. In September this year, after two years of jostling, 18 streaming players signed a Universal Self-Regulation Code for Online Curated Content Providers; not a day too soon. In October, the Supreme Court issued a notice to the central government and the Internet and Mobile Association of India (IAMAI) in a petition to regulate over-the-top platforms, or OTTs, by an autonomous body. On November 9, the Cabinet Secretariat issued a notification that brings digital and online media within the jurisdiction of the Ministry of Information and Broadcasting.

“We are working with the government and feel confident (the code) will stand the test of time in upholding the law as well as maintaining artistic freedom,” says Karan Bedi, CEO of the Times Group-owned MX Player. Like most content codes across the world, this one offers age and content ratings, guidelines on access control, and a grievance redressal mechanism. The ministry has issues with the last, which is being worked on, says Tarun Katial, chairman of the digital entertainment committee at the IAMAI. “A lot of PILs are filed (against a show or OTT) and very often the government is also party to them. It needs to be comfortable saying the self-regulation code is good enough. This is the best solution if you want to balance freedom of expression and consumer protection,” says Katial.

“The self-regulation code is... the best solution if you want to balance freedom of expression and consumer protection," says Tarun Katial, chairman, Digital Entertainment Committee, IAMAI

It is a sentiment many across the Rs 8,000 crore streaming industry echo. “Section 19 (1)(a) of the Constitution that guarantees freedom of speech is limited by seven sub-items, including morality and law and order,” points out Deepak Jacob, chief regional counsel, direct to consumer and international, India Middle East and South East Asia, The Walt Disney Company. 

“The government can constitutionally impose reasonable restrictions,” he adds.

“Self-regulation when it complements existing regulation goes a long way. Take the Advertising Standards Council of India,” says Abhinav Shrivastava, counsel, LawNK, a Bengaluru-based law firm.

Since 1985 the Council’s code has kept advertising honest and fair. It handles about 120 complaints a month. In 2006 it got statutory recognition; various courts have upheld it too. That is the model the Broadcasting Complaints Council of India, which implements the self-regulatory code for TV, operates on -- the one the government apparently is keen for digital to follow.

There is much questioning (none on record) and some apprehension too. Many insiders question the logic of pushing a government-mandated self-regulatory code. Others wonder what is the need for bringing a new technology under old rules – instead why not liberate TV, films and the others. “If the rule of censorship is applied to OTTs, it will hamper their creativity,” says Shrivastava.

Primal fear

“The effect of regulation on creative expression (in TV) has been pathetic,” says Nikhil Pahwa, founder, Medianama. The Cable Act (1995), the Broadcasting Content Complaints Council, a part of the Indian Broadcasting Foundation, and The Telecom Regulatory Authority of India, along with myriad other laws, regulate television broadcasting. The result: TV is hemmed in by regulatory snarls around both distribution and pricing, making it abjectly dependent on advertising. This has meant a deluge of mass, one-size-fits-all programming. Since streaming video has no such constraints, it offers storytellers phenomenal creative freedom. It shows. Within four years of streaming taking off, India won its first International Emmy for Delhi Crime, a Netflix series, last month.

So, is the fear of regulation justified? Will the 400-odd million people who watch streaming video end up having to watch the same shows that 836 million TV viewers do? (many people watch both).

Jacob points out that the difference is between curated content and non-curated content, and between private and public viewing. “On internet-based platforms there is curated (pay or subscription-driven) and non-curated content (free and user generated). The curated content that you access after making an informed choice, using your credit card, putting in parental controls, et al is not public exhibition. So the exception to the right to freedom of expression in 19 1 (a) doesn’t apply. You are exercising a private, individual right.”

Pahwa points to the ban on 857 pornography sites in 2015. Arguing on behalf of the government, Mukul Rohatgi (then attorney general) had said, “We cannot become a totalitarian state. If two adults want to watch something they feel is entertainment, what is the role of the state in this?” But the (then) ban was on child pornography online, which is morally and legally wrong. Just like porn, the content on OTTs is pull, you sign up to it and watch it privately. “Just because it offends people is no reason to ban it. As long as the content is not illegal, you can’t do anything. This has been established in many cases,” says Pahwa.

Jacob reckons that things change with free content, which can be deemed to be public exhibition. So the exceptions would apply. “The challenge is with user- generated content,” says he.

The outsider

That is where Google’s YouTube is king. Going by Comscore data, it reaches 388 million unique visitors, making it the single-largest streaming video brand in India. At over Rs 3,000 crore in revenue, it is a medium-scale broadcaster just below Sun TV.

Then there is Facebook (328 million users a month) and its sister brands WhatsApp (400 million) and Instagram (estimated 120 million). Put Google and Facebook together and they take away 70 per cent of the Rs 22,100 crore digital advertising pie. Why then are they along with Twitter and other firms not signatories to the IAMAI code or being discussed when it comes to regulating news online? Both Google and Facebook declined to comment for this story.

While news will be covered by the next piece, in entertainment, the IAMAI code is meant for curated content, say industry insiders. That still doesn’t explain why the big tech-media firms aren’t there. According one lawyer, about 40 per cent of the content on YouTube, Facebook et al is curated. “Just because you are not entering into a live production agreement doesn’t mean it is not curated. When you upload after signing on, you can’t claim safe harbour. That was meant for telcos which were mere pipes or conduits with no knowledge,” says Jacob.

Those are arguments being used in the US and Europe too as regulators try to rein in tech-media. This one, then, will go on for a long time.