OTT Compliance Requirements and Regulations: A Guide for Broadcasters

The numbers are in, and they clearly show that regular TV programming is out, and streaming on OTT platforms is set to replace it. By 2029, the number of global viewers actively using OTT services will likely reach and exceed 4.9 billion. 

The popularity of OTT platforms is obvious. Why wait to watch an episode a day of a rerun of your favorite show when you can watch every season at once, whenever you want? Then, there is the sheer variety and quantity of content available online.

As the OTT user base grows, however, so do general concerns about privacy protection and compliance with legal regulations. Services with OTT platforms operate online and stream millions of bytes of content, drawing in international audiences who entrust them with their personal information to use their service. How do they ensure that every consumer’s data is protected and each piece of content is properly licensed?

Dacast has one of the leading OTT platforms on the market, so we know all about video streaming regulations and data privacy in streaming services. We’ll break down the key aspects of OTT compliance, explain the importance of protecting user data, and highlight best practices to avoid common legal issues in OTT streaming.

OTT Compliance: What Is It and Why It Matters?

OTT is short for over-the-top, a service that delivers content from the provider straight to the consumer using the Internet. It removes the middleman, aka cable companies, and gives unlimited access to video, music, and live streams.

While most providers allow users to watch this content on their own time, some services still provide linear broadcasting online. Thus, IPTV allows users to enjoy the classic TV experience. 

Even though OTT technology distributes content exclusively online, they don’t have free reign over the Internet. These companies must comply with regional and international laws protecting providers, users, and content creators. In that sense, OTT compliance is:

• Data Privacy and Security: Adhering to privacy laws and implementing data protection measures.
• Content licensing for OTT platforms: Securing content distribution rights across regions.
• Respecting Regional Regulations: Following local laws for content, advertising, and consumer protection.

Why Do OTT Platforms Collect Consumer Data

It doesn’t matter which streaming platform with OTT services consumers use – they all collect and store personal data. From your location and age to your favorite type of content, this is all information they collect daily. But why? Well, there are several justified reasons:

• Content Personalization: The service can recommend content that suits the consumer’s tastes by analyzing what they watch, how often they watch it, and for how long. The algorithm analyzes shows and movies based on previously watched content and gives suggestions in the same or related genres.
• Targeted Advertising: Many of these services are free to use but rely on AVOD before other monetization models. They use consumer data to offer targeted advertising. Analyzing demographics, interests, and viewing behavior helps them show more relevant ads to users.
• Constantly Improving User Experience: The collected data helps refine UI and overall user experience constantly. For example, tracking how users navigate the app or website can improve content discovery and optimize streaming quality.
• Easy Subscription Management: Instead of manually renewing their subscription each month or manually entering card details to buy a pay-per-view event, most platforms remember the user’s payment information. This automates the payment process and saves them time.

The Need for OTT Platforms To Have Strong Data Protection

This is where the trouble starts. Sort of. The more data a platforms collect, the better service it can provide. On the other hand, the need to protect it also rises. A recent study suggests that 95% of all cyber-attacks are financially motivated. Personal and payment information are high-value targets for cybercriminals, and any data breach will have severe consequences for the platform and the users. Data privacy in video streaming services is more important than ever, so the efforts to protect it must also be great.

OTT Privacy Laws: Protecting Your Users Data

While the Internet (metaphorically) opens up borders and allows viewers worldwide to use your OTT services, it also raises the question of compliance with the law. Providers must follow specific privacy laws set in place to protect users’ personal data from unauthorized access and misuse.

However, the privacy laws in China differ from those in North America, for example, so which ones does the provider follow? They can choose to comply with the privacy requirements in their own region, but this regional OTT compliance may cut off an entire section of the international market. In general, there are three major privacy regulations OTT platforms must adhere to:

• General Data Protection Regulation: The GDPR controls the collection, processing, and storage of personal data for all EU citizens. It’s a strict regulation that imposes very specific data protection requirements on businesses, like asking for explicit consent before collecting data and reporting any security breaches within 72 hours. The penalty for failing to comply with GDPR is €20 million, or 4% of what you generate in a year.
• California Consumer Privacy Act: The CCPA offers data privacy protections for California residents. This law gives consumers the explicit right to know what personal data a service collects and to choose not to sell their data to third parties. Consumers can also demand the deletion of their collected data.
• Asia-Pacific Region’s Data Privacy Laws: This region includes privacy and data protection laws like China’s Cybersecurity Law and Japan’s PIPA. Other notable countries with such regulations include India, South Korea, and Australia. These laws focus on consent, data storage, and breach notification, though they may have differing requirements and penalties.

Data Sovereignty

Another issue that providers of OTT platform solutions can face is data sovereignty. This is the requirement that they store and process data within the borders of a specific country. Many countries enforce these laws so local governments can control data within their jurisdictions.

The Challenges OTT Faces When Managing User Privacy

As we said before, to give their users the best possible viewing experience, OTT platforms need their data. One of the strategies OTT services use to reach new audiences also involves user data. Data is the best currency, and the more you have, the better services you can offer.

However, you also have more to lose and are at greater risk of data breaches and breaches of international privacy laws. No one wants to suffer the loss of reputation and trust if one of these cyber attacks succeeds.

Providers are always trying to find the balance between collecting the necessary information from their users and following the legal requirements for OTT platforms to keep that information safe and secure.

The Best Security Practices for Data Protection

When choosing where to watch their streams and broadcasts, most consumers have a list of the OTT features the platform must have. If they fall in the 85% of adults worldwide who want to protect their online privacy, they must also carefully consider the security features of that service. The few essential cyber safety features all OTT platforms must have include:

• Encryption: To prevent unauthorized access, the provider must encrypt sensitive data while it is at rest and in transit.
• Secure Payment Processing: It must use secure payment gateways that comply with the Payment Card Industry Data Security Standard (PCI DSS).
• Access Control: To improve security, the service must restrict access to sensitive data to authorized personnel only and implement multi-factor authentication.
• Global Compliance Standards: It should adopt globally recognized security frameworks and certifications, such as ISO/IEC 27001 for information security management systems and SOC 2 compliance for user data privacy and security best practices.

At Dacast, we take data protection very seriously. We implement end-to-end encryption for all video content streamed on our OTT platform, protecting users’ content and personal information.

Our payment systems are fully PCI-compliant, and we follow stringent security protocols to safeguard financial transactions.

We also comply with global privacy regulations, such as the GDPR and CCPA, and continuously update our security measures to stay ahead of evolving threats.

OTT Platform Legal Considerations for Content

Some of the biggest trends in the OTT industry all focus on novel and engaging content. We’ve got cloud-based content and interactive content coming from all sides. So, as the offer continues to grow and diversify, so do the legal requirements surrounding content licensing and distribution.

The differing global audiences have differing tastes in content, so providers must secure the intellectual property and distribution rights to and from other countries.

Content Licensing for OTT Services

Quality and varied content are at the heart of every good OTT service. Whether that content is movies, TV shows, documentaries, or live streams, as long as it has gig production and entertainment value, your viewers will watch it, regardless of their country of origin.

The services must procure all legal permissions to stream material to avoid copyright issues in OTT streaming. This is called licensing, and it involves:

• Acquiring Rights: This typically means negotiating with content creators, studios, or distributors to obtain the rights to stream their content for a specific duration and select territories.
• Revenue Sharing: OTT services often share revenue with content owners, particularly when the business model involves AVOD or TVOD pay-per-view monetization.
• Exclusivity: Exclusive streaming rights give services a competitive edge. However, these agreements are more expensive and come with additional restrictions.

Global Content Distribution Rights and the Challenges of Acquiring and Managing Licenses

OTT services operate in a global marketplace, but content rights are typically territorial. Depending on the region, a single piece of content might have different distribution rights and follow different OTT broadcasting regulations. Some of the OTT compliance challenges services face most often are:

• Multiple Licenses for Different Regions: OTT services need different licenses to comply with broadcasting regulations in different regions. This includes negotiating multiple agreements with studios or content owners.
• Changing Terms: The terms of these licenses can change over time. So, to stay compliant, services must renegotiate rights or even remove content if they fail to renew a license.
• Geoblocking: In some cases, content is restricted to certain regions, requiring OTT services to use geo-blocking technology to prevent users in unauthorized locations from watching.

Standard OTT Compliance Requirements For Broadcasting

Staying compliant with regional and international broadcasting rules and regulations is a complicated dance. In addition to procuring the appropriate licensing, here is what most of the biggest providers of OTT streaming and broadcasting solutions are doing to stay compliant:

1. Adhere to content classification systems in different jurisdictions (e.g., age ratings, content warning). In some countries, content may need to be censored or restricted based on cultural or legal norms.
2. Ensure that a certain percentage of their catalog contains local content (e.g., 30% of content should be European in the EU).
3. Follow specific rules about collecting data from children. In the U.S., COPPA regulates the collection of personal data by services aimed at children under 13 years old.
4. Respect the copyrights, trademarks, and patents of their content. They must protect against the distribution of illegal pirated content and respond to IP owners’ takedown requests.
5. Offer resolution and bitrate optimized for various devices, as well as support for high-definition, 4K, and HDR formats where applicable. Maintain consistent streaming quality even under varying network conditions.

Navigating Copyright Laws for Content Streaming on OTT Platforms

Today, anyone can stream anything with a phone and an Internet connection. But just because they can, it doesn’t mean they have the legal right to. The same applies to OTT services, which have a legal obligation to protect the intellectual property of content creators, including producers, writers, musicians, and actors.

OTT services sometimes use DRM technology on their platforms to overcome the legal challenges of streaming and stay compliant with regulations and agreements. DRM prevents the unauthorized distribution or copying of content and protects copyrighted material during transmission and streaming. They also maintain clear records of all content licenses and rights agreements to prove they have a right to stream the content and avoid infringement claims.

The Consequences of Copyright Infringement on OTT Streaming Services

While this may seem like a lot of legal and technical work, every bit of it is necessary because failure to comply has serious legal and financial consequences for OTT streaming services, and those who violate copyright laws risk facing lawsuits, fines, and reputational damage. This will damage their long-term viability and ability to be profitable. Some of the consequences include:

• Financial penalties and fines: Copyright holders can ask for substantial damages for unauthorized use of their content.
• Loss of content: DMCA strike downs can stop you from streaming content and force you to remove it entirely.
• Damage to reputation and audience trust: Accusations of piracy will affect the platform’s reputation and potentially drive audiences away.
• Service interruptions: Courts can issue injunctions, requiring a platform to temporarily or permanently stop streaming certain content.

Overcoming The Challenges of OTT Compliance

Offering OTT services and maintaining OTT platforms isn’t a walk in the park. Plenty of regional and international laws and policies regulate content and the gathering of user information. Most of them are different because OTT caters to global audiences, so OTT providers must comply with most, if not all.

To stay compliant, providers must secure region-specific licenses for every piece of content they offer. This often involves negotiating with studios, distributors, and content owners to obtain the rights to stream and broadcast content. Providers must also monitor any changes or updates in regional rules and policies.

Advertising compliance is another area where OTT providers must tread carefully. Some countries have strict rules regarding the advertising of alcohol or gambling, while others limit the frequency of ads during broadcasts.

How AI Can Help With Compliance

Staying on top of so many rules and regulations isn’t easy. Luckily, AI tools can automatically monitor content for potential violations. They can help identify illegal or inappropriate material and alert you when content needs to be geo-blocked.

AI solutions can streamline data privacy protocols by helping providers better manage personal information and detect potential security breaches. These tools can also facilitate the storing and processing of private data according to regional laws.

OTT Compliance: Keeping Your Favorite Platforms Streaming

There are a lot of rules put in place to protect media consumers and creators. And if they don’t follow these rules, providers won’t be able to stream and broadcast content or other entertainment.

Here at Dacast, we know the importance of OTT compliance and following OTT privacy laws. Our acquisition of Vzaar introduced us to Chinese audiences and taught us all about following international regulations. We follow global privacy standards, such as GDPR and CCPA, and have robust security protocols to protect user data.

If you need a professional video streaming and hosting platform that crosses all its T’s and dots all its I’s, why not try Dacast for free? Get our 14-day free trial – no credit card required.

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