The OTT industry has thrived and has the advantage of zero intrusion into creative liberty, a smooth market for streaming, and unimaginable varied contents for consumers.

Picture showing a hand in front of TV holding a remoteRepresentative image
news Law Thursday, June 25, 2020 - 12:39

The pandemic necessitating a ‘lock down’ has collapsed the global economy, having dire consequences on cinema exhibition in theaters. The circumstances have propelled the substitution of brick and mortar with e-commerce. 

The most notable seizure of economic opportunity during such an adversity is the gaining prominence of online streaming platforms or the ‘Over The Top’ (OTT) platforms. With the indefinite closure of cinema theatres, as many as 35 OTT platforms have catered to the appetite of such a significant population.  

One such indication is where one of the leading multiplex operators in the country expressed its displeasure over movie producers opting to release movies on the OTT platform, which was countered by statements released by the Producers Guild of India. As the media and entertainment industry undergoes an involuntary paradigm shift from theatres to private viewing, it is imperative to analyze the legal framework governing these online streaming platforms.

Pre-censorship under the Cinematograph Act, 1952

Multimedia content exhibited on the OTT Platforms have ‘minimal restrictions or limitations’ in their content. On the other hand, a film or a motion picture, which is viewed in a cinema, undergoes a rigorous procedure of ‘pre-censorship’ codified under the Cinematograph Act, 1952 (hereinafter referred to as the Act or the CG Act). 

The object and purpose of the said legislation is for ‘certification of cinematograph films’ for ‘exhibition’ and for ‘regulating exhibitions by means of cinematographs’. An analysis of the provisions of the Act is imperative to understand its boundaries.

Under Section 2(c) of the Act, “cinematograph” has been defined as including "any apparatus for the representation of moving pictures or series of pictures." Section 2(dd) of the Act defines a “film” to mean "a cinematograph film.” 

Under Section 3 of the Act, the Central Government constitutes the Central Board of Film Certification (CBFC) for the purposes of "sanctioning films for public exhibition.” The CBFC determines whether a film should be certified for public viewing and constitutes the sole repository of that power. The kinds of certificates that can be issued after the CBFC has examined a film under Section 4, are set out under Section 5-A. Since the expression “public exhibition” is found in Sections 3, 4 and 5-A of the Act, it was generally presumed that the applicability of the Act applies only to theatre viewing and not to streaming platforms. 

The ‘Public Exhibition’ debate 

Though it is plausible to state that the requirement of censorship of films is not meant for private viewing, such as through the Online Streaming Platforms, the courts have time and again expanded the scope of “Public Exhibition.” 

The conundrum arose as “Public exhibition” has not been defined under the Act. One of the first discussions pertaining to the ambit of “Public Exhibition” under the Act was in the case of Garware Plastics and Polyesters Ltd, where the court dealt with the issue of whether the showing of video films over a cable TV network amounted to communication of such film to the public. 

The court held that the viewers of a cable TV network who receive a broadcast through a dish antenna to which TV sets are connected, may be watching it in the privacy of their homes, but would still be considered as a section of the public. Subsequently, in the case of Super Cassettes Industries, the Delhi High Court dealt with the issue of whether audio-visual recordings on DVDs and VCDs meant only for private viewing requires certification by the CBFC under Section 5-A of the Act. 

Interestingly, the court observed that Section 5-A of the Act is no longer confined to exhibition in a cinema hall. It was further observed, “Even if there is no audience gathered to watch a film in a cinema hall but there are individuals or families watching a film in the confines of their homes, such viewers would still do it as members of the public and at the point at which they view the film that would be an ‘exhibition’ of such film.” 

Could it mean that even online streaming platforms used privately may fall within the scope of ‘Public Exhibition’? 

Multimedia content on the internet is not a ‘Cinematograph’

The direct issue on whether the Act would apply to transmission or broadcast of any films, cinemas or serials and other multimedia content through the internet was resolved by the High Court of Karnataka in the case of Padmanabh Shankar. 

“Public Exhibition” was not the cornerstone of the legal dispute but the discussion was whether such content exhibited by the online streaming platforms come under the definition of 'cinematograph'. Ultimately, the Court held that such contents do not fall under the definition of the Act. The relevant portion of the judgment is below:-

 “… In this petition, we are dealing with what is available on the internet. There may be various films or serials transmitted via internet. If we take into consideration the concept of internet and how the internet operates, it is impossible to accept the submission that the films or serials which are transmitted or exhibited through internet will constitute films within the meaning of Clause (dd) of Section 2 of the said Act of 1952. In fact, if we consider the concept of internet, it is very difficult to accept the contention that through the internet there is an exhibition of films or serials. The internet contemplates transfer of files in response to the requests made by the users.”

The issue of regulation of these online platforms was once again brought before the Delhi High Court in the case of Justice for Rights Foundation in 2018. While dismissing the prayer of mandamus seeking the Court to frame guidelines, the court held that the provisions of the Information Technology Act provides for deterrent action which can be invoked in the event of any contravention. The Ministry of Electronics and Information Technology has also gone on record to admit that they are not empowered under law to regulate the content on the internet and there is no provision for regulating or licensing for an organization or establishment for putting up content on the internet. 

It was also stated that the provisions of the Information and Technology Act, 2000 are applicable and the concerned statutory authority exercising jurisdiction under the said Act can take action by virtue of the powers available to them. The Karnataka High Court and the Delhi High Court have identically concluded the online streaming platforms cannot be regulated under the Act. The issue is now pending before the Supreme Court on appeal. 

From pre-censorship to self-censorship 

The visual media and entertainment industry has traversed a long way and has entered into a completely different sphere through the advent of internet viewing. In terms of the Indian context, the said transformation of the media and entertainment industry is definitely measurable through the burst of OTT providers, the consumer appetite, its accessibility and economic viability for producers, as well as the watchers. 

The courts have held that the Act that presupposes a censorship is not applicable to online streaming platforms. For a filmmaker, censorship would be seen as a curtailment of his expression of art, an ordeal or a test. Fortunately, now a filmmaker can bypass the stage of ‘pre-censorship’ to direct exhibition via online streaming platforms. 

The question now arises is whether such content through such a platform would not be governed by law at all. The answer is an obvious negative. The Information Technology Act, 2000 can be invoked in the event of any contravention of law. In other words an illegal or unlawful content cannot be immune to law. 

In January 2019, notable streaming platforms entered into a self regulation code or the ‘Code of Best Practises for Online Curated Content Providers,’ intending to self-regulate its contents voluntarily.  Now, a revised code envisages the creation of a Tier-II grievance redressal mechanism, called the ‘Digital Content Complaints Council’. 

The externality of the ‘Digital Content Complaints Council’ has evoked a controversy. On one hand, it is argued that only upon such a structure, regulation in reality would occur. Whilst, detractors argue that it will destroy the balance between ‘creative art’ and “consumer choice.” The revised code was signed by only four OTT players. Be that as it may, the teething and practicality of self-regulation is in the test of time. 

The OTT industry is here to stay while the theatre-going experience may be withering away. There may also be a possibility that through the journey of growth, both the platforms will learn to co-exist and live with each other as time goes on. The OTT industry is slated to be a $5 billion dollar opportunity by 2023. The COVID-19 pandemic has definitely filliped and exponentially supported this incredible opportunity of business, having a growth in subscription and viewership at astronomical levels.

To service obligations, the producers have utilized the internet streaming platforms to facilitate their release and recoup their investments. What could be an emergent action today may become the custom tomorrow. 

The growth of the OTT Industry is attributable to self-regulation and the decision of the state to refuse intervention. Due to such measures, the OTT industry has thrived and has the advantage of zero intrusion into creative liberty; a smooth market for streaming and unimaginable varied contents for consumers. Any change in the model of regulation may be counterproductive. The emancipation of cinema from the pre-censorship legal framework to the OTT platform is a celebration of the “freedom of art and expression.”

Views expressed here are personal. 

Pawan Jhabakh and Salai Varun are both advocates practising in the Madras High Court.

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