Over the top (OTT) platforms, particularly the ones that have foreign ownership like Disney+ Hotstar and SonyLIV, are planning to discontinue their live news service due to the intermediary guidelines and the foreign direct investment (FDI) cap of 26% in digital news.
While live news is an important offering, the OTT players feel that the lack of clarity arising due to the roll-out of intermediary guidelines and FDI in digital media make it less lucrative considering the implications involved. SonyLIV has removed live news from its platform while other platforms are expected to follow suit.
Disney+ Hotstar, ZEE5, SonyLIV, Voot, Jio TV, MX Player and YuppTV have aggregated a lot of live news channels in order to take advantage of the growth in digital viewership of news. YouTube, Facebook and Twitter, which are classified as intermediaries, drive a significant amount of consumption for print and TV news players.
"With the introduction of intermediary guidelines, there are complications regarding whether the platforms have the power to take down that content. For example, if some content is shown by some news channel that is defamatory, will a platform like Disney+ Hotstar or SonyLIV will be able to take down that content? The answer is no. We have sought clarification from the ministry but they are silent. The MIB has not issued any clarification. With the 26% FDI rules and the introduction of new intermediary guidelines, it becomes a grey area. OTT platforms don't want to take any chances," said the senior executive of a leading media company.
The executive also stated that news content cannot be removed at one go as there are contracts that need to be honoured. "We cannot remove news content in one go. We have to give notices to news guys before taking down their channels. Roughly, after June, none of the players will carry news channels on their platform," the executive stated.
TMT Law Practice Managing Partner Abhishek Malhotra said that OTT players that engage in live streaming of news channels operate only as intermediaries.
Malhotra also said that the OTT platforms need not worry about the FDI guidelines since those are targeted at platforms like Dailyhunt. "While the OTT platforms, many of whom are foreign-owned, may be concerned that carrying the feed of news channels may render them open to be considered as news aggregators and hence be impacted by the 26% FDI restrictions, however, the focus of the FDI policy was meant to be to address entities such as Dailyhunt which aggregate snippets of content from different publishers of news to obviate the need for users to visit those individual news portals is completely different. A close reading of the FDI guidelines clarifies that they mainly apply to pure-play digital news platforms and aggregators."
According to him, as per OTT platforms' interpretation, the FDI guidelines should also apply to tech companies like YouTube, Facebook, and Twitter, but it is not the case.
LawNK Partner Abhinav Shrivastava said that the OTT platforms have been defined in the guidelines as curators of online content whereas live news cannot be categorised as curated content. He also noted that the parent companies of the live news channels carried by OTT platforms already adhere to the Programme Code under the CTN Act and the Uplinking and Downlinking guidelines. That same content is travelling to the digital platforms. Therefore, there is no ambiguity in the intermediary guidelines, he added.
"The OTT platforms are being cautious since it also depends on how important news content is for them from a commercial standpoint. Hosting or not hosting news channels depends on the risk appetite. Also, if the investment is big enough, like in the case of original show, there is bound to be self-censorship since the risk involved is huge," Shrivastava pointed out.
Kurate Digital Consulting Senior Partner Uday Sodhi said that the combination of FDI restrictions and intermediary guidelines have created confusion among OTT players. He also said that the dependence of OTT platforms on news is diminishing.
However, a senior executive from an OTT platform said that the move will impact the strategy of platforms that have made big investments in news. "We have invested significantly in news. If we remove it, we will suffer loss because we also have third-party channels apart from our own news channels," the executive said.
The executive also said that live news is different from curated content, adding that the contribution of news for OTT is in high single-digits.
"In the case of live news, we are just the carriers without any role in the content whatsoever. We are focused more on live news and less on curated news. Our business dependency on both is very less but live news is a much better proposition. I don't think live news should have any issues. How can live content be regulated?" the executive averred.
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