New Delhi / Netflix, Hotstar, Amazon Prime Can Be Banned From Streaming Original Content

A new loophole has been discovered in the new ecommerce policy of India, and the results of this loophole can be disastrous.

World’s largest streaming platforms such as Netflix and Amazon Prime can be asked to stop streaming their original content in India.

Why this is a possibility? How will Netflix and Amazon Prime deal with this situation now?

The Loophole in the New Ecommerce Policy

Last year in the month of July, Indian Govt. shared the draft for the new ecommerce policy of India, which came into force from February 1st, 2019.

As per the guidelines issued in the new e-commerce policy, FDI powered ecommerce companies and digital companies cannot exercise ownership and control over the inventory sold inside India.

This was the reason that both Amazon and Flipkart had to stop selling via vendors whom they owned and completely changed their business model. This, despite their claims that they are essentially a market place.

But when this rule applies to digital companies such as Netflix and Amazon Prime, then the whole picture changes. 

Netflix, Hotstar, Amazon Prime Cannot Stream Their Own Content?

Inventory of Netflix and Amazon Prime is basically the content which they own, that is the content which is produced by them, inside their own studios.

The other type of content is the one which is licensed by them from other production houses such as movie, TV series etc, but the main form of content right now is produced by Netflix and Amazon themselves.

This content, also known as original content can face legal issues in India now.

Business Standard says that under the new ecommerce policy, Govt. can ask Netflix and Amazon Prime to stream only that content which is licensed from others, and not stream the content which is produced by them, inhouse.

And since both Netflix and Amazon Prime are located out of India, they will come under the FDI regulations as well, thereby being unable to stream original content on their own platforms inside India.

Even Hotstar, which is the #1 OTT in India can save this issue, as they are now owned by Disney.

But Will Netflix, Hotstar, Amazon Come Under New Ecommerce Policy?

Now, this is yet another ambiguity, which no one has any answer to.

If we read the ecommerce draft, we will find that the Govt. officials have used e-commerce, electronic communications and digital economy with the same meaning, all across the document.

Information and Broadcasting Ministry, the Ministry of Electronics and Information Technology, and the Telecom Regulatory Authority of India are still not clear about the difference between ecommerce and a digital company like Netflix and Amazon Prime.

Infact, if we apply the same rule then even Oyo, Ola and other such services can be banned from selling their own inventory.