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Draft e-commerce policy: Will it benefit homegrown OTT platforms?

The e-commerce policy, if implemented in its present form, may prove to be a threat to Originals from global OTT platforms like Netflix and Amazon Prime, say experts

The draft e-commerce policy, if implemented in its current form, is most likely to act as a boon for homegrown OTT platforms with respect to Originals. 

According to the Department for Promotion of Industry and Internal Trade (DPIIT)’s draft national e-commerce policy, an e-commerce platform with foreign investment cannot exercise ownership or control over the inventory sold on its platform. Thus, the e-commerce policy may prove to be a threat to Originals coming from global OTT platforms like Netflix, Amazon Prime and Hotstar. In the absence of Originals from these platforms, homegrown OTT players like Zee5, Voot, Alt Balaji and Hoichoi could turn out to be the direct beneficiaries of the draft policy, say experts.  

As per DPIIT’s policy, the terms ‘e-commerce’, ‘electronic-commerce’ and ‘digital economy’ can be used interchangeably as per the context. It says e-commerce includes buying, selling, marketing or distribution of goods, including digital products and services, through an electronic network. The draft also covers delivery of goods, including digital products, and services either online or through physical means.

“Going by the definition in the draft e-commerce policy, OTT falls under e-commerce on the virtue of being a digital product in the e-commerce marketplace,” said Atul Pandey, Partner at Khaitan & Co, a law firm.

Most OTT platforms have been betting high on the Indian market and have been working towards capturing the Indian audience. Earlier this year, Hotstar announced setting aside a budget of Rs 120 crore for production of Original content, just for the Indian market. It has even tied up with big names like Salman Khan for these projects. While Netflix has already released five Originals for the Indian market and have eight more planned for this year, Amazon Prime too is going big with Originals and have an upcoming action thriller series with Akshay Kumar.

“During liberalization there were fears about Indian industries losing out to companies from the developed world. But the Indian manufacturing and services sector has actually grown in leaps and bounds after the end of the Licence Raj. The OTT industry is facing a similar scenario. E-commerce policies should not stop foreign players from running originals. There should be level playing field so that consumers are able to get the best of content and the players thrive in a clear competitive environment. Only then will the Indian OTT platforms be forced to become world-class if they want to survive,” said an insider.

Vishnu Mohta, Co-founder of regional OTT platform Hoichoi, agreed competition, in any form, was good for the industry. “There might be a slight advantage if global players do not show Originals.” 

“We are in a nascent stage and the OTT eco-system needs to grow in many folds. People should have more options to get hooked on to this platform,” Mohta added.

Meanwhile, Atul Pandey shed some light on how global OTT players could still co-exist in the Indian market. “If at all the draft e-commerce policy is implemented there can be ways by which Originals by global players can still exist on their platforms. These platforms can work with producers and become mere broadcasters of the shows,” Pandey added.