OTT should have a liberal regulatory framework
MUMBAI: While television has regulation the same is not the case with OTT in the country. Many OTT platforms like Hotstar practice self-regulation. In India, the OTT regulation should be pro-consumer and at the same time progressive.
One challenge in India is that the government does not know when to start when it comes to regulating OTT platforms. At the same time regulation does not mean censorship. On OTT you don’t know who the regulator is. From a statutory perspective, there is no definition of OTT.
In terms of competition OTT’s biggest competition is not with the TV but with time. OTT is also competing with other digital platforms like gaming, social media and digital news.
These points were made in a morning session on the second day of FICCI Frames 2018.
The session ‘Rise in Platforms: Digital Revolution In India and Impact on m&e Industry’ had Media Partners Asia executive director Vivek Couto, Frost And Sullivan director Vidya Nath, Eros Now COO Ali Hussain, Z5 Business executive VP, digital head Archana Anand, Verizon Digital Media VP strategic alliances, channel management Michael Sturm and PLRLaw partner Suhaan Mukherji as speakers.
It was Anand who made the point about the importance of regulation in the OTT space looking out for consumers. “One the one hand regulation and I believe that is the reason it was put in is that it has to look out for the consumer. At the same time if it isn’t progressive, futuristic in some sense it will be regressive. If we balance these two out we will be very well sorted. OTT has to have a more liberal framework than traditional TV as you have the youth coming there. You need to be edgier, cheekier and braver otherwise where is the excitement? you will create the same thing. Having said that the starting point is agreeing on certain fundamentals like not having child porn on platforms. There are basics we can agree to and regulation should be in place for this. The question is that it is subjective. It can get to a debate but thought leaders should get into a room, debate on it and come to a consensus.”
Ali noted that the OTT industry can look at the IT Act. They can decide if that gives a very liberal framework and adequate safeguards for consumers. One challenge is who will you hold responsible for in appropriate content given that content can be streamed from anywhere. He noted that people who run legitimate businesses and are in it for the long haul will generally respond to and think about consumers. He noted that regulation shouldn’t happen for the entire industry that is only keeping it in mind the exceptions which are the extreme search engines. He noted that the National telecom policy will be extremely important. Department of IT, DoT and I&b ministry are having conversations.
Nath noted that when one looks at regulation in other markets India is one of the more progressive countries. “The government does not want to regulate digital because it does not know where to start. Companies like Hotstar have strong standards and practices. I also think that the fear is that when you use the word regulation it means censorship. It is not necessary that it has to be like this”.
Anand noted the importance of self-regulation and noted that it is needed to pre-empt much harder regulation coming in. Couto said that the likes of Zee, Star and other players across the Asia Pacific in the SVod business are really good at self-regulation. It was more about YouTube in some markets last year where ads appeared near inappropriate content like terrorism. He noted that Thailand and Indonesia have had YouTube issues. YouTube was made to comply with issues like content censorship. They can’t do anything that hurts the sovereignty of the state. They also have to adhere to content guidelines. The other issue for him is if regulators have gone into regulating other parts of the ecosystem. In India, SVod is a new baby and one shouldn’t regulate on things like pricing. In Taiwan, the government regulates TV prices but not OTT.
One point made in the session was about the importance of geo-targeting. This can help reduce content being displayed in the wrong environment.
In terms of competition Anand noted that digital platforms eat into time that consumers would spend on other things. it does not eat onto TV. Netflix considers sleep to be competition. One watches OTT content while one travels or waits. It is not about competition between different forms of media. One needs to look at how effectively OTT can increase the time that people spend on media not on whether cord cutting isn’t happening or not. She noted that the opportunity her company saw is that the regional language market is hugely underserved when it comes to OTT offerings. English remains niche. Her aim was for her platform to richly serve content in regional languages. The freemium model is important given the reluctance to pay. Free is how one gets to consumers initially. However, she added that there are discerning consumers who will be willing to pay but a change of mindset is needed. After all these consumers are happy paying Rs. 150 for a movie ticket. they need to see that it is alright to also pay for an OTT service. She noted that the advantage her company has is that original content created for OTT can at a later date be monetised on TV as well. She noted that it is fantastic that OTT platforms are partnering with telcos are there is no better distribution mechanism to get to the consumer. “It is a no-brainer to partner with them.” She also noted that the issue of payment is easier with telco partnerships. Taking away a share of the telco wallet is something that people are comfortable with.
Sturm noted that his company did a deep evaluation of the Indian market. A copy-paste model will not work in the country. After all, the country has many languages and so the company tied up with a local platform. It sits on top of Verizon’s platform. He noted that now content producers launch their own apps to monetise content. This is an additional stream in addition to selling content to third parties. In terms of online ads, he noted that one should not just replicate traditional broadcast ads for the digital medium. One should look at other forms of product placement which can give advertisers more value.
Ali noted that doing SVod is tougher than Avod as with the former you are trying to insulate yourself from the realities of the market. He cautioned that making huge investments is not the secret sauce for creating great content. What it does though is give content creators the responsibility to create great content. Nath noted that India is an Avod market and if Svod can become 15-20 percent of the market in 2020 then it would have made progress.
Couto noted that India has similarities with Southeast Asia. Both saw telco infrastructure slow to take off. India has a strong online ad video market. But it is a subset of TV. He noted that with the advent of digital platforms television has been affected in Australia. In Japan, on the other hand, television has held its own with Nippon TV. China is a huge online video market. Players there offer examples of what an OTT platform should aspire to be.