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Regulator- Collector:  Over-the-top Media Service

The only alternative is to match the compatibility of the content controller and tax collector with those of the big technology companies. — Alok Singh


An over-the-top (OTP) media service is an internet-based media streaming service that is offered directly to the viewers. The viewers have the option to watch the media product offered by paying only the utility charge of the internet connection. It offers customers a lot of choices as well as flexibility. It can be watched anytime and anywhere by the consumer. The control of the tax collectors and the content regulators is tough to implement in this format of media viewing. OTT platform only needs hardware that has a screen and can support the internet. Such hardware can be as small as a four-inch (or lesser) size mobile phone or as big as the screen of a movie theater. There are no suppliers or distributors or anyone else between the end-user consumer and the OTT service provider. It’s one-stop shopping. But, it’s not a one-stop-shop for the regulators and the taxmen. These are contradictory situations. The level of convenience to one creates the level of inconvenience to the other. It seems to be a zero-sum game. It means the advantage of one player at the cost of a disadvantage to the other player. The source is the start of the complexity.

The source of the origin of the media, as well as the source of the consumption of the media, creates a lot of permutations and combinations for the tax collectors as well as for the content regulators. The question is whether the source of origin should be made accountable or the source of consumption should be made accountable for regulating the content. What to be done, if the source of the origin and the source of the consumption fall in the domain of two different regulators. What to do if the regulators at the source of the origin approve the content but the regulators at the source of the consumption disapprove the content. The complexity increases if the source of origin and source of consumption falls in two different cultures or two different civilizations. It can give birth to the conflict in the interpretation of the content. It happens in real life that certain things or behaviors that are accepted in one civilization are not accepted in the other civilization. The life of content regulators and tax collectors were not so complex during the days of predecessors of OTT media services.

The noticeable predecessors of the OTT media services are cable television, broadcast television, and satellite television. In the case of cable television, the content and the supply could be controlled by the company and could be regulated by the authorities and the tax theft could be avoided to a great extent by the tax authorities. In the case of an internet-based OTT platform, all the services are consumed as data and the end-user pays only the data charge to its internet or communication service provider company. It means that OTT media services are just other data, irrespective of the content, whether it’s sports or education or movie, or anything else. 

What is next to OTT? There is no immediate visible successor of the OTT media streaming service. But the big technology companies might have something in the pipeline to offer in near future or sometimes later. The question arises: Do such companies follow themselves what they offer to their customers.

The companies follow gender-sensitive, religion-sensitive, culture-sensitive practices for its employees who are from different civilizations. The office place of big multinational companies where people from different civilizations share the same space makes sure that the culture of each employee is respected. In the physical world, if the corporate and companies make sure that there be mutual respect for each other’s culture, then it should be applicable to the virtual world and to its consumers also. There have been many occasions when protests have happened outside the movie theater halls if the civilization is perceived to be under attack and perception is an important constituent of a healthy society. Content-control through boycotts and protests is relatively easily possible in the case when the content is delivered at a movie theater i.e. the place of display of the content is in the public domain. But, in the case of OTT media service, the tools of boycott and protests are not effective immediately because an individual as per their convenience can consume the content anytime-anywhere. In such situations, content delivery can’t be stopped, spontaneously or as soon as it is realized that it should be stopped. Once the content outspread on OTT, it is difficult to stop. The damage is difficult to repair.

The way the traditional media services could be regulated is not sufficient to regulate the OTT platforms. Newer technology brings with itself newer challenges and demands newer ways and systems to regulate it. 

The control over big technology companies is a tough job for everyone. OTT media service is an example of the emerging challenge offered by big technology companies. The spread of internet connectivity across the nation has caught unprepared content regulators and tax collectors. The newer technology demands compatible regulators and compatible taxation laws. Newer technology can’t be controlled using the older framework of content regulators. Newer technology can’t be taxed rationally by engaging older format of tax collection. 

The spread of technology is not to be stopped. The only alternative is to match the compatibility of the content controller and tax collector with those of the big technology companies. The compatibility matching should be fast. Before a technology hits the market or before a technology offers a product to the audience, the content controllers and the tax collectors should be ready with the matching tools. It seems that the content regulators and the tax collectors are beaten consistently by the big technology.  By the time the authorities realize that they need to do something, the big technology companies start working on other superior technology. In such a dynamic and permanent racing system, the content regulators and the tax collectors should be ahead of the big technology companies. To be ahead, they should be ready with the newer tools. This can happen if they are able to guess the next big technology idea. Guess is a risk so they should have multiple tools ready in their quiver to use it whenever the situation arises.  It should not be the chicken-egg problem. Whosoever leads will win. 

Alok Singh is fellow of Indian Institute of Management Indore and currently is  faculty of general management at NICMAR.

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