Here’s Why PEMRA’s Proposed Regulations for Web TV and OTT are Problematic

When PEMRA published a proposal to regulate Web TV and Over the Top TV proposal to regulate Web TV and Over the Top TV content services in Pakistan, I’m sure it didn’t expect quite the reaction it’s been getting over the few days.

Most of the negative press and sheer misinformation being spread comes from an article published on a little-known site called “News Desk”. They published a piece about how Youtube content creators would need a license that would cost between Rs. 50 lakhs and Rs. 1 crore.

Let’s start with a timeline:

  • 8th January: PEMRA launches a consultation paper on regulating Web TV and Over the Top TV content services in Pakistan.
  • 23rd January: PEMRA holds a meeting in Islamabad with key stakeholders and the industry to get feedback on the document.
  • 31st January: A site no one should trust publishes a hyper-sensationalized piece and chaos ensues.

There’s no need to panic (right now) so with mild reassurances aside, let’s move on to PEMRA’s paper itself.

First, I’m not really sure why PEMRA is taking the lead on these regulations in the first place. The agency with the mandate to regulate digital media is the PTA. And they already police online content in accordance with the Prevention of Electronic Crimes Act (PECA) 2016. PEMRA can’t enact any Web TV or OTT regulations, let alone implement them. While PEMRA says it will liaise closely with PTA on compliance, why are two agencies doing the same work? Don’t we have enough bureaucracy and red tape as it is?

Secondly, this is a working document. That means the final draft will look very different from the current iteration. These are proposed regulations that also explain what other countries have in place so people can make informed suggestions as to what model Pakistan needs to follow and later, implement. So any judgment on what the government is and isn’t doing is premature. They’ve asked for feedback so let’s provide that instead of criticism.

You Can’t Regulate What You Can’t Define:

While PEMRA provides guidelines for determining what is and isn’t Web TV or Over the Top TV, the scope definition for these terms is vague.

Take Web TV for instance, “The Web TV will refer to broadcast of content either live or recorded made available for viewing of the public through internet either free of cost or on payment of a subscription fee.”

This could mean anything from platforms like Hum TV and its latest dramas to a desi mum’s cooking video channel with 14 subscribers.

Moreover, while PEMRA wants different licenses for Web TV and OTT, the definitions really don’t do much to actually define them.

OTT’s definition says that “the term Over-the-Top (OTT) TV refers to content services which are accessible over the internet and can be accessed from any place at any time on private or public internet by users using a variety of devices either free of cost or by paying a subscription fee to the service providers.”

The definitions have a lot of overlap and are ambiguous. PEMRA needs to make a clear case for why they are separating them in the first place and if they do so, they should make the definitions concrete. Vague definitions can be used to bring literally everything under the ambit of regulations and they would set a remarkably poor precedent.

What Happens to Individual Content Creators and Startups?

How it should work is that only platforms would need to obtain a Web TV or Over the Top TV license and individual content creators should remain unaffected. For example, Youtube gets a license (we’re not even opening that can of worms right now) and the content creators like Irfan Junejo and others keep on creating content just like they do now.

That’s not what the document proposes though.

There’s a lack of clarity on the status of content creators on YouTube and other platforms. The guidelines for judging what falls under Web TV and OTT are insufficient to determine whether PEMRA will require them to get a license or not.

For instance, PEMRA thinks anything competing with linear TV could fall under the ambit of Web TV and OTT. Does that mean Junaid Akram’s vlogs now require a license because they are causing a decline in viewers of any of the idiotic game shows on TV? How would PEMRA even determine that?

According to the document, non-commercial or non-economic services won’t need a license. But who defines non-commercial or non-economic? If I have an informational channel but work with a brand for Rs. 5000 to promote a product I like (which would also benefit viewers), does that suddenly make me liable to get a Rs. 5 million license?

There’s simply too much gray area in the proposed regulations for the most vulnerable section of online content creators in Pakistan: individuals, startups and small businesses.

How Many Millions?!?

The ambiguity in definitions exacerbates what was merely a problematic policy suggestion to a full-blown existential crisis for individual content creators, startups and small businesses.

Since we can’t determine who needs to get a license, the most draconian interpretation would indeed require YouTube creators and others to get licenses. That’s a problem because here’s how much they cost:

License Upfront Fee (Rs.) Annual Fee (Rs.)
OTT Service 5 million Fixed fee @ 20% of license fee

Variable fee @2% of Gross Annual Revenue (GAR) (which includes revenue earned from subscription, advertisement etc.)

Web TV Service (non-news e.g entertainment, education, travel, sports etc.) 5 million Fixed fee @ 20% of license fee

Variable fee @2% of Gross Annual Revenue (GAR) (which includes revenue earned from subscription, advertisement etc.)

Web TV Service (news & current affairs) 10 million Fixed fee @ 20% of license fee

Variable fee @2% of Gross Annual Revenue (GAR) (which includes revenue earned from subscription, advertisement etc.)

I’m a bit baffled at the decision to charge license fees in the first place since even the international practices cited in the proposed document state that the likes of Singapore, Australia, and the UK do not charge a license see.

It’s a new industry that has the potential to grow into a significant one and it does not make sense to implement such a high barrier to entry. If PEMRA wants to make sure that this industry contributes its fair tax share, it needs to ensure it keeps on growing first. For that, it is far more beneficial to make the licenses as unrestrictive as possible (if they are required at all), and tax the revenues when the startups and content creators start earning enough to warrant taxation.

Eligibility Criteria and Documentation or The (Un)ease of Doing Business:

Honestly, I could have written about the section which details eligibility criteria and documentation needed to get a license but I’m just going to one-word-summarize it as a headache. If the government likes to highlight how it has improved the ease of business doing in Pakistan, it should actually do so too.

Wrapping Up: What’s the Way Forward?

While my tone has been decidedly critical, I’m actually in favor of oversight. The qualifier is that regulations for such a nascent industry will only work if they make the business environment for online content creators more conducive.

PEMRA needs to take a step back, think about what it wants to achieve and whether the proposed regulations actually manage to do that. In my opinion, what the agency needs to do going forward is:

  • Talk to PTA and ensure that two agencies don’t end up doing the same job.
  • Make definitions for Web TV and OTT clearer and whether there needs to be a distinction between the two.
  • Consider taking a more open approach by eliminating the need for a license and only monitor for content violating the laws of Pakistan since the industry is in a nascent stage.
  • Reconsider the proposed outrageous Rs. 50 lac to Rs. 1 crore fee structure which would be a death knell for startups, individual content creators and small businesses alike.

  • Looking at the parent UN/ITU supported local/domestic entity which is PTA which has successfully accomplished/achieved the desired goals in Pakistan.
    The related organisations should first evaluate their own ability to the guidelines of the PTA and Pakistan multi media subscribers content.

  • what about people doing this outside PK? How are you regulate them?

    **** 101 of governance….. Don’t make the laws you can’t implement****

  • These people at PEMRA are so farigh they make useless laws that harm the people PEMRA is supposed to serve. All this just so they can make a buck.

    PEMRA, you’re supposed to work for us. Not leech money out of us.

  • It is just plain stupid! These bureaucrats and freebooters have nothing better to do and are shooting themselves in the foot. I would like to know, what exactly (and how) is the government facilitating or underwriting people who create Content??

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