Netflix, Disney, Amazon to challenge India's tobacco rules for streaming-sources

Streaming giants Netflix, Amazon and Disney on Friday privately discussed a possible legal challenge and other ways to stall India's new tobacco warning rules, amid fears they will need to edit millions of hours of existing web content, sources said.

The pushback is the latest headache for streaming giants in India, a top growth market. Companies often face legal cases and police complaints their content sometimes hurt religious sentiment, and many have self-censored content over the years.

As part of India's anti-tobacco drive, the health ministry this week ordered streaming platforms should within three months insert static health warnings during smoking scenes. Also, India wants at least 50 seconds of anti-tobacco disclaimers, including an audio-visual, at the start and in the middle of each program.

In the first signs of industry distress, executives of the three global streaming companies, and India's Viacom18 which runs billionaire Mukesh Ambani's JioCinema app, held a closed-door meeting, where Netflix NFLX.O said the rules would hit customer experience and push production houses to block their content in India, according to two sources familiar with the discussions.

Executives in India also discussed ways of a possible legal challenge to assert that other ministries - IT and information & broadcasting - have powers over streaming giants, and not the health ministry, said one of the sources.

The companies, and India's health ministry, did not respond to a Reuters request for comment. Reuters is first to report the industry's planned pushback.

Already, all smoking and alcohol-drinking scenes in movies in India's cinemas and on TV, under the law, require health warnings, but so far there were no regulations for the streaming giants, whose content has become increasingly popular.

In 2013, Woody Allen stopped his film, Blue Jasmine, from being screened in India after learning about mandatory anti-tobacco warnings would be inserted into its smoking scenes.

Activists have welcomed new anti-tobacco rules by India, the world's second-largest producer of tobacco that kills 1.3 million people each year in the country. India also has stringent cigarette pack warning rules.

HEALTH VS WARNINGS "HARASSMENT"

Truth Initiative, a public health nonprofit group, in March, said 60% of the 15 most popular streaming shows among 15- to 24-year-olds it analyzed contained depictions of tobacco, "effectively exposing 25 million young people to tobacco imagery" in 2021.

But in India, companies from Netflix to Amazon AMZN.O to Disney DIS.N, also have popular Hindi content which often shows Bollywood actors smoking, something activists say encourages tobacco use.

India is a hot market for streaming giants, and executives fear business impact and higher costs. Ambani's JioCinema has just in recent weeks signed multiple content deals with NBCUniversal and Warner Bros WBD.O, bringing popular shows like "Succession" and "The Office" on its platform.

Together, the companies have millions of hours of content.

"New content being created needs to be changed and old content needs to be modified. It could require insertion of ad-type warning in between," said Kaushik Moitra, partner at Bharucha & Partners who advises streaming firms and production houses.

During the Friday meeting, Amazon and other companies made the point there was no way films can be edited in three months, said the second source, adding the industry decided to consult lawyers and write letters in protest.

Dylan Mohan Gray, a filmmaker who directed documentaries such as "Fire in the Blood", said the new Indian rules amount to "harassment", saying that murder, war and extremely violent crime scenes were not regulated in the same way.

"Smoking, which though certainly a serious public health problem, is both legal and a massive source of government revenue in this country," he said.