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NEW DELHI : Subscription-driven over-the-top (OTT) streaming and news media platforms are struggling with new Reserve Bank of India (RBI) rules requiring authentication by users kicking in earlier this month.

The rules could prove cumbersome for new users, especially those belonging to older generations or semi-rural areas that may not be tech savvy, according to platform executives and media analysts.

There could be a drop in renewal of services and new registrations, especially after seasonal content such as the Indian Premier League or the T20 World Cup ends, they said. Many people view entertainment as a luxury and not a priority and this could aggravate the crisis.

Actual numbers can only be known at the end of a quarter, but the downward trend has begun, as have instances of fraud with many entities trying to take advantage of lost and disoriented customers.

Under the new rules, all recurring transactions require additional authentication. For payments above 5,000, a one-time password will have to be validated by the customer each time a payment is due and while monthly plans of OTT services are much cheaper, automatic payments still need customer approvals once an alert has been sent.

“While the RBI move may have been aimed at ensuring more transparency, it is definitely a tedious process and only time will tell if we can all come up with robust mechanisms for this to go through seamlessly," said a senior executive at a streaming platform.

The person admitted that they had started sending out messages to subscribers, but were worried they would soon see a drop in renewals and new additions.

Associating with various payment gateways and giving subscribers multiple options and channels for payment increases the chances of subscribers joining and staying on board, said Divya Dixit, senior vice-president, revenue and marketing, ALTBalaji, which has partnered with platforms such as MobiKwik, Paytm, Amazon Pay, PayPal and PayPoint India. “Communicating through channels such as email marketing can ensure that dormant subscribers are also reactivated. A platform should also take care not to overdo reminders or notifications that could confuse or drive subscribers away," Dixit said. ALT too has notified its customers about the change in payment rules.

The first couple of months will need definite handholding by platforms, said Chandrashekhar Mantha, partner at Deloitte. “It all depends on how equipped their technical infrastructure is and how they can address grievances because at least initially, there will be transactions not going through," Mantha said.

In the long term, this disruption will have a positive impact, as customers enjoy more flexibility, choice and transparency while playing a decision-making role in payment processing. However, there has been a clear disruption in the market with the mandate coming into effect in early October, said Ramesh Narasimhan, head, digital commerce, Worldline India, a company offering payment solutions for physical and online businesses.

“There is a deluge of notifications going to every single bank account holder and while this has certainly created awareness, consumers are equally lost on actions to be taken. In our assessment, very few consumers may have actually acted appropriately and created new mandates with AFA (Additional Factor of Authentication) with their service providers," Narasimhan added. While adoption of these mandates could be wider in the days to come, the same will be staggered with the human error aspect playing out when it comes to authentication especially with older users or those who are not tech savvy or with some kind of visual impairment, said Akash Karmakar, partner at Law Offices of Panag & Babu.

To be sure, while some existing users may still be able to wrap their heads around new rules, it has been a challenge for services to onboard new users since the rules have been notified, said Amol Kulkarni, director (research) at CUTS International, a consumer advocacy group. “Many platforms may turn to quarterly or yearly payments instead of monthly packages that may not be feasible for low-income groups, furthering the digital divide in the country," said Kulkarni.

“Further, many unscrupulous entities that promise to resolve user problems as intermediaries are emerging," Kulkarni said. While posing challenges for subscription to foreign news media platforms that only offer card payments, Kulkarni said the rules could also go against new, local, smaller independent players in the OTT and media space.

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