CUT! That's A Wrap

Welcome to 2024, where going to Cinema is a thing of the past. Over the past few years, movie streaming platforms have taken the world by storm and heralded a transformative era in on-demand entertainment. This shift in content consumption has been effectively replaced by the ease and convenience of streaming.

Whether it be Disney+, Netflix or Amazon Prime, this wave of movie streaming platforms, also known as the Over-The-Top (“OTT”) Platforms, has opened doors to a wide range of content. It has also provided filmmakers with additional avenues for creativity.

The legal industry faces an ongoing struggle to regulate the dissemination of this said content. In this article, we will discuss the regulatory framework governing movie streaming platforms in Malaysia and delve into the legal considerations involved.

The Regulatory Framework Governing Movie Streaming Platforms in Malaysia

The regulation of OTT platforms falls under the purview of the Malaysian Communications and Multimedia Commission (“MCMC”), an agency under the Ministry of Communications and Multimedia. MCMC exists to protect the interests of end-users, the industry players and investors in the communications and multimedia industry in Malaysia. 

While OTT platforms stream movies primarily governed by the Film Censorship Act 2002 and Film Censorship Guidelines, the regulation of content intended for OTT platforms remains distinct from the purview of Film Censorship Board of Malaysia. This was confirmed by the Minister of Home Affairs of Malaysia, Saifuddin Nasution Ismail, who stated that while the home ministry oversees film censorship, it does not have any jurisdiction over materials disseminated over the internet as internet content currently falls under MCMC. Content on OTT platforms are subject to the MCMC’s content standards as outlined in the Communications and Multimedia Act 1998 (“CMA”) and the Malaysian Communication and Multimedia Content Code 2022(“Content Code”).

OTT platforms are prohibited from transmitting content that is indecent, obscene, false, menacing or offensive in character with intent to annoy, abuse threaten or harass any person pursuant to Section 211 of the CMA. A breach may subject the OTT Platform operators to a fine not exceeding fifty thousand ringgit (RM50,000.00) or to imprisonment for a term not exceeding one year or both. In addition, they may face further fines of one thousand ringgit (RM1,000.00) for every day or part of a day during which the offence is continued after conviction.

Legal Elements involved in Operating OTT Platforms

To ensure compliance with regulatory requirements in Malaysia and ensure smooth and lawful operation within the country, OTT platform operators need to consider the primary legal factors that are critical to those who are seeking to establish and maintain their presence in Malaysia via an internet-based platforms. The key legal considerations include, but not limited to, the following:

A. Content Regulation 

Content regulation plays a huge part in Malaysia. Malaysia enforces strict guidelines for media content, especially when it comes to content that concerns cultural and religious sensitivities. Violation of these guidelines may result in the imposition of content bans or may require alterations prior to being distributed. 

MCMC is actively reviewing online content management frameworks to address the proliferation of harmful and provocative online material. Thus, OTT platforms are advised to closely monitor any changes in the law to ensure compliance with Malaysian regulations on censorship. 

B. Copyright Infringement 

OTT platform operators require the proper permissions from copyright owners or their management to be allowed to stream the content in Malaysia. Obtaining the relevant permissions is essential to avoid any violations of copyright as it may lead to legal actions, fines or even a platform shutdown. 

For instance, Netflix is free to stream shows like “Drive to Survive” and “Squid Game” as they are original series produced by Netflix, whereby they own the copyright. However, Netflix will require permission from the relevant copyright owners to stream shows they do not own copyright to such as “Suits” and “Brooklyn Nine-Nine”. 

C. Payment and Financial Transactions 

Compliance with the Financial Services Act 2013 and the Payment Services Act 2019 becomes paramount when handling financial transactions on the platform in Malaysia. 

This is because OTT Platforms offer their content through subscription models, hence it is important for operators to prioritise secure and fully compliant payment processing systems in accordance with local laws. OTT platform operators must ensure that they implement secure measures to protect the financial data of users and comply with any financial regulations in Malaysia. 

D. Data Protection and Privacy 

OTT platform operators are required to obtain consent from users before collecting their personal information. They must also ensure proper security measures are taken to safeguard user data against any potential data breaches. Furthermore, OTT platforms must also have transparent privacy policies outlining how user data is handled, stored, and shared.  

Conclusion 

As OTT platforms gain popularity, it presents an opportunity for the entertainment industry to flourish if these platforms are used to their maximum potential. Nevertheless, the existence of OTT platforms in Malaysia requires an understanding of various aspects which include the relevant applicable laws and regulations. 

By adhering to local laws and regulations, OTT platforms can deliver a hassle-free experience to Malaysian users whilst ensuring that they adhere to all necessary local requirements. A collaboration with regulatory authorities can ensure a positive relationship between all parties, ensuring compliance with all legal requirements and further benefiting both the OTT platforms and the local media ecosystem. 

With the continuous growth of the industry, it is vital to keep updated with regulations and applicable practices in Malaysia to remain compliant and successful in the competitive and ever-evolving OTT market.