Media & Entertainment 2025 Comparisons

Unprecedented M&A Activity

The Media and Entertainment (M&E) sector witnessed an unprecedented surge in merger and acquisition (M&A) activity, with several high-value deals and over 100 deals contributing to a total value of INR 876 billion. This surge was primarily driven by the landmark merger between Reliance and Disney, which created India's largest media company, valued at USD8.5 billion. This transformative deal integrates over 100 TV channels and major streaming platforms like JioCinema and Disney+ Hotstar.

Shifts in Key Segments

The latest FICCI-EY report indicates that film theatrical admissions and revenues declined by 5% in 2024. The music industry experienced a 2% revenue decline, primarily due to a decrease in free music consumption and lower streaming royalty rates, despite growth in paid subscriptions. The gaming sector also experienced an overall decline, attributed to the implementation of GST on online gaming last year. Concurrently, linear TV revenues declined for the second consecutive year, with a 6% drop in advertising revenue and a 3% decrease in subscription revenue.

Evolving Regulatory Landscape

The government has actively shaped the regulatory environment to keep pace with digital evolution. The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, provided a foundational framework for digital media. Following previous efforts, the focus remains on regulating digital and OTT platforms, highlighted by the recently released National Broadcasting Policy, 2024, from TRAI (currently in consultation). Additionally, regulatory processes for print, TV, and radio have been streamlined, and new guidelines have been introduced for digital and Out-of-Home (OOH) media.

Technology and Content Trends

Technology is fundamentally reshaping the way content is created and consumed. Artificial intelligence (AI) is increasingly leveraged across content generation, production, distribution, and personalisation, driving efficiencies and enabling new creative formats. There's a strong and growing emphasis on regional and local language content, with nearly half of all OTT content now released in regional languages, alongside a rise in dubbed/subtitled offerings. This focus, coupled with an increase in the export of Indian content and services, is steadily positioning India as a global content hub.

The Indian media and entertainment sector has seen significant growth in specific formats, particularly post-COVID, fueled by the nation's digital boom. While platforms like podcasts, reality TV, and long-form streaming series have expanded, several other sectors have also experienced a substantial boom in business volume over the last year.

Digital Marketing and Advertising

Digital media has, for the first time in 20 years, surpassed television to become the largest segment in India's media and entertainment industry. This reflects a fundamental shift in consumption driven by the affordability of data and the widespread adoption of smartphones. Digital advertising, now accounting for over half of all ad spending, is surging, primarily fueled by e-commerce advertising and the explosive popularity of short-form video on social media.

Subscriptions

While the overall subscription market experienced shifts, paid digital subscriptions for video and music streaming services have seen significant growth. Many platforms are now banking on a hybrid subscription model, generating revenue from both advertisers and consumers who seek an ad-free experience.

Online Gaming

Despite recent tax policy challenges (28% GST on deposits for real money gaming), the gaming segment, especially casual and free-to-play mobile games, continues its strong upward trajectory. India remains the world's largest mobile gaming market in terms of downloads.

Live Events

The organised live events industry has seen a robust resurgence and significant growth. Business volume is further boosted by international artist concerts and a notable trend of event tourism, where fans travel across cities specifically for live shows, contributing to local economies.

In terms of deal-making, a clear trend is emerging among large conglomerates and established media houses, which are acquiring or merging with content creators, broadcasters, and digital platforms to achieve end-to-end control over the content value chain. As also covered above, the last year has seen a large number of high-profile, multi-billion-dollar deals, most notably the Reliance-Disney (JioStar) merger, which consolidated major TV, streaming, and content assets under a single entity. Many deals are motivated by the need to acquire digital capabilities, such as OTT platforms, AI-driven content companies, and ad-tech firms, reflecting the sector's rapid digital transformation.

Another trend has been the focus on regional and niche content, wherein acquirers are targeting regional language content producers and niche genre specialists to tap into India's diverse and rapidly growing audience segments. The bulk of deal activity is domestic, with Indian companies consolidating market share or expanding into new verticals. However, there is also a notable increase in intra-Asia deals, as Indian companies seek regional synergies and international players enter the Indian market.

Beyond technological and market assets, in the creative industry, acquiring key talent and their associated intellectual property can also be crucial. Deals often aim to bring in popular content creators, production houses with strong original IP, or teams with specialised skills to bolster creative capabilities and future content pipelines.

Shift Towards Gross Profit Participation

While Net profit participation remains the most common structure, wherein talent (lead actors, directors, producers) or financiers receive a percentage of net profits after recoupment of costs, Gross profit participation is less common but has gained traction for marquee talent and major directors, especially in high-budget films or premium OTT series, providing a share of gross receipts before deduction of most expenses.

Deals now increasingly encompass defined shares from digital, satellite, and music rights, rather than solely revenue from theatrical or initial broadcasts. This shift underscores the increasing importance of OTT and non-theatrical distribution in India.

Back-End Bonuses and Performance-Linked Payouts

Performance-linked bonuses (eg, box office milestones, streaming viewership targets) are now frequently layered on top of traditional profit shares, especially in OTT deals and big-budget theatrical releases. Furthermore, in ensemble projects or high-profile series, profit pools are created for key cast and crew members, with distributions based on pre-agreed-upon points or shares.

In terms of disputes arising from back-end participation structures, see below.

• The most frequent disputes arise from ambiguous definitions, opaque accounting, and disagreements over new revenue streams and audit rights. Disputes often also arise over the definition of "net profits," with producers deducting a wide range of costs (including overheads, interest, distribution fees, and cross-collateralised losses from other projects) before calculating participations.
• Lack of transparency in accounting practices and delayed or incomplete reporting are frequent causes of conflict as well.
• The rapid growth of OTT, digital, and international syndication has led to disagreements over what constitutes “gross receipts” and whether new revenue streams (eg, digital premieres, brand integrations) are included in the back-end pool.
• Delays in profit participation payments and resistance to third-party audits of producer accounts are persistent sources of litigation.
• Producers sometimes offset losses from unrelated projects or costs from other films/series before calculating participations, leading to disputes over improper cross-collateralisation.
• When deals lack clarity on the allocation of revenues from music, merchandising, or international rights, parties may contest whether such revenues should be shared.

The digital boom in India has ushered in new, non-traditional financing models for film and television, moving beyond conventional approaches.

Direct-to-Digital (OTT) Commissioning and Acquisitions

The biggest shift involves films and web series being directly commissioned or acquired by OTT platforms (like Netflix, Amazon Prime Video), often in pre-production. This provides a guaranteed upfront revenue stream, significantly de-risking traditional theatrical financing and enabling a wider range of projects to find funding.

Brand Integration and Branded Content

Brands are now directly investing in or co-producing content where their product or message is subtly woven into the storyline. This provides a valuable, non-traditional funding source that aligns marketing goals with content creation.

Micro-Financing and Crowdfunding

For smaller, independent, or niche content creators without major studio backing, online crowdfunding platforms are gaining traction, allowing them to raise smaller sums directly from passionate audiences or investors.

Multi-Platform Rights Monetisation

Producers are strategically pre-selling multiple rights (eg, satellite TV, music, digital, overseas, dubbing) before or during production. The combined value from these diverse revenue streams, even if individually smaller, creates a more robust financial package to secure production funds.

Content-Specific Funds and Private Equity for Digital Libraries

Investors are increasingly keen on owning or investing in digital content libraries that generate predictable, recurring revenue from OTT licensing.

Varied Legal Systems

In international co-productions, the key is to effectively manage diverse legal systems, varying intellectual property mechanisms, regulatory frameworks, and distinct cultural business practices. One must meticulously negotiate and clearly draft contract terms, including IP ownership, licensing rights, distribution arrangements, and financial obligations. One of the critical aspects is the choice-of-law provisions and dispute resolution mechanisms, typically arbitration under recognised international bodies to ensure neutrality and enforceability.

Bilateral Treaties

Furthermore, it can be beneficial to structure the agreements on bilateral co-production treaties that India has with other countries, such as the India-United Kingdom Film Co-Production Agreement and the Audiovisual Co-production Agreement between the Government of Canada and the Government of the Republic of India. These can help streamline regulatory compliance and offer other advantages. Ideally, parties should also consider engaging local counsel in each jurisdiction to navigate country-specific regulations and prevent avoidable issues.

Cultural Considerations

Lastly, cultural business practices are reflected in negotiation tactics, timelines, content approvals, and other aspects. It is essential to understand the other party and demonstrate flexibility in areas where the parties can reach a mutually beneficial agreement.

Risk allocation in Indian large-scale production agreements has shifted from vague contingency planning to more structured, enforceable, and commercially sensitive arrangements. Parties are more conscious of health, legal, and logistical liabilities, and contracts reflect a new realism about the unpredictability of the entertainment landscape. Accordingly, the following clauses, outlined below, are now included.

Force Majeure and Health-Related Clauses

Following the pandemic, production agreements in India have begun to allocate risk more cautiously by explicitly including health-related force majeure clauses. Earlier, such clauses were broadly worded and often did not account for epidemics or government-imposed lockdowns. Now, they are more specific, covering pandemics, quarantines, and travel restrictions. These changes ensure that parties are better protected if disruptions similar to COVID-19 recur (Indian Media After COVID-19 and Its Perspective).

Producer-Led Rebalancing of Liability

Production houses, especially those that are vertically integrated, such as Yash Raj Films, have responded by spreading operational risk across in-house units, including VFX, distribution, and talent management, thereby reducing their dependency on external vendors. In contracts, this means producers now demand broader indemnity clauses and stricter warranties from service providers, talent, and third-party suppliers. In many cases, producers are also pushing for insurance-backed risk coverage that includes disease outbreaks and shutdowns (Pandemic Survival Strategy of Hindi Film Studios).

Delayed Payment and Milestone-Based Disbursements

To mitigate financial exposure, payment schedules in production agreements are increasingly milestone-based, often linked to deliverables or shooting schedules rather than lump-sum advances. This gives producers flexibility in pausing or terminating projects without bearing the full financial burden upfront in case of new disruptions (Indian Film Industry: A Fight Against COVID-19).

Digital and Hybrid Distribution Clauses

Contracts now include fallback clauses that allow producers to shift from theatrical to OTT release without breaching obligations to distributors or exhibitors. This represents a crucial evolution in risk sharing, given the uncertainties in cinema exhibition and the steady rise of digital-first releases in India (Analysis of Game of Coordination in Indian Film Industry).

While the SAG-AFTRA and WGA strikes in the United States did not directly halt production in India, they had a ripple effect on the Indian entertainment sector, especially among studios and platforms that rely on international content or co-productions. OTT platforms with US roots (eg, Netflix, Amazon Prime Video, Disney+ Hotstar) experienced delays in global content pipelines, prompting a heavier shift towards Indian originals and regional content. While family-owned companies and independent segments need to remain resilient, this temporary surge in demand from new players for Indian writers, directors, and actors, particularly in digital storytelling and limited series formats, is expected to continue (UniSA Media Centre).

India has not witnessed strikes of the same scale or formality as in the USA largely due to its fragmented guild structure and weaker collective bargaining frameworks. While organisations such as the FWICE (Federation of Western India Cine Employees) and SWA (Screenwriters Association) advocate for rights, their capacity to enforce industry-wide shutdowns remains limited. Nonetheless, the visibility of the Hollywood strikes has strengthened calls for standardised contracts, better residuals, and recognition of creative contributions in India’s digital content economy.

Some OTT platforms and top-tier production houses have begun revising contract structures for creative professionals. Key trends include:

• introduction of back-end compensation models for writers and showrunners, especially for high-performing OTT titles;
• inclusion of credit assurance clauses and IP rights clarity, especially for commissioned content; and
• health and safety guarantees, insurance, and indemnity clauses for actors and directors – accelerated by pandemic experiences.

However, these improvements remain mostly confined to high-budget productions or those involving global partners. The broader workforce, especially independent writers and non-unionised talent, continues to face informality and ad hoc contracting.

The rise of OTT platforms in India has diversified content demand, creating new opportunities for writers, directors, and actors beyond the traditional studio system. As platforms seek differentiated, regionally resonant content, creative professionals now have greater bargaining power. Writers and showrunners are increasingly seen as intellectual property drivers rather than just service providers. This shift echoes the recognition battles seen in Hollywood during the WGA and SAG-AFTRA strikes, where talent fought for fair residuals and safeguards against AI-related issues.

While India lacks the strike culture and robust union frameworks of the United States, global developments create expectations. High-profile Hollywood strikes have generated awareness among Indian talent about gaps in residual payments, IP ownership, and streaming royalties. This awareness is prompting some industry bodies, such as the Screenwriters Association (SWA) and the Indian Film and Television Directors’ Association (IFTDA), to advocate for more equitable contracts and enforceable minimum terms.

Indian studios, particularly those with vertical integration, such as Yash Raj Films and Reliance Entertainment, can be expected to respond by tightening exclusivity clauses, creating in-house talent pools, and investing in AI-led production tools to reduce their dependency on external creatives. Such developments could mirror global studio strategies post-strike settlements, aiming to rebalance power by owning more production infrastructure and talent development pathways (Pandemic Survival Strategy of Yash Raj Films).

While formal strikes remain unlikely in the Indian context due to fragmented union structures, the balance is slowly shifting in favour of creative talent, particularly in the streaming ecosystem. Global movements and domestic shifts in content economics will likely catalyse further standardisation, better contract terms, and more collaborative studio-talent relationships in the years ahead.

Podcasters, YouTubers, and influencers in India largely operate outside the purview of traditional industry guilds, such as the Screenwriters Association (SWA), the Federation of Western India Cine Employees (FWICE), or the Indian Performing Rights Society (IPRS). This creates significant gaps in contractual protections, intellectual property rights enforcement, and revenue-sharing mechanisms. Unlike film or television professionals, most digital creators lack access to collective bargaining structures or dispute resolution forums.

Disputes Over Platform-Centric Contracts

Many creators face restrictive platform contracts, especially with YouTube networks, podcast platforms, or influencer marketing agencies. These contracts often grant the platform wide-ranging rights over content use, monetisation, and IP without negotiation parity. There have been increasing calls for clearer creator contracts and revenue transparency. A 2022 study by Kalaari Capital noted that 75% of Indian creators are concerned about income predictability and the lack of content ownership rights (Kalaari Creator Economy Report, 2022).

Limited Inclusion in IP Rights Bodies

IPRS, which administers royalties for music creators, has only recently begun acknowledging certain digital-first creators; however, podcasters and YouTubers are still largely excluded from royalty structures. They fall into a grey area between “broadcaster” and “author” under current rights frameworks. This leaves many creators unable to claim residuals or enforce moral rights over the reuse and adaptation of their content (IPRS Membership FAQs).

The Ministry of Information & Broadcasting has recently increased regulatory focus on digital content creators, especially regarding advertising standards, misinformation, and content liability. However, these frameworks do not address employment standards, fair use of work, or payment protection for creators. This regulatory imbalance means non-traditional creators face restrictions without the benefit of institutional protection, unlike unionised sectors (PIB Notification on Influencer Guidelines, 2023).

Non-traditional content creators in India face significant legal and structural challenges due to their exclusion from established guilds and unions. As digital content becomes central to India’s media economy, the absence of representation, IP safeguards, and revenue fairness continues to create friction, especially in an era where platforms and agencies increasingly dictate terms. Formalising creator rights through updated guild structures or new digital media unions may be necessary to ensure equitable treatment.

Local tax incentives have significantly influenced India’s media and entertainment sector by streamlining taxes, reducing production costs, encouraging local production, and promoting both local and international investment in the sector.

Central Taxes

Tax incentives work both at the central/federal level and the state level, with different governments offering various (often competing) incentives. One of the most critical factors has been the streamlining of GST, which is now uniform across the country, compared to the earlier, cluttered state-specific taxation. Income tax benefits are also on offer for start-ups in the sector. These help companies plan their finances more effectively and ensure smoother compliance.

State-specific benefits

Several Indian states offer financial incentives, including capital subsidies, cash reimbursements, and GST refunds, to attract production activity. Maharashtra, the home of Bollywood, offers a subsidy of up to 50% on eligible production expenses for Marathi and Hindi feature films. Governments are also offering aggressive incentives to establish film cities in their states, including providing land for development. For example, a new film city is being developed in Noida, Uttar Pradesh.

These incentives reduce operational costs but also drive employment, tourism, and infrastructure development in host regions. Producers also now select filming locations based not only on creative considerations but also on the financial advantages on offer.

Due Diligence

Filmmakers and film products must ensure proper due diligence and compliance with eligibility norms to enjoy the benefits. Any misrepresentation or non-compliance can result in the reversal of benefits, leading to unanticipated costs and a bar from future incentives. The contracts being signed must include proper tax provisions and obligations that are mutually agreed upon by the parties.

Tax incentives in competing jurisdictions can be both a boon and a bane for producers. The competition to attract media and entertainment productions creates significant opportunities and complex legal challenges for producers. Jurisdictions offer lucrative incentives, including tax rebates, subsidies, and often exemptions, designed to attract high-ticket projects.

The incentives are financially beneficial but require producers to carefully consider issues such as double taxation, conflicting obligations, and incentive manipulation. For example, a production under the Film Co-Production Agreement between the UK and India can claim tax relief in the UK while also qualifying as a domestic production in India, making it eligible for local subsidies and support.

Producers can take advantage of specific tax structuring methods, such as setting up special purpose vehicles (SPVs). Clauses regarding cross-border obligations, the use of tax treaties, intellectual property management, and tax benefits must be carefully considered and drafted.

Legal considerations include adherence to Double Taxation Avoidance Agreements (DTAA), understanding withholding tax implications on royalty/service payments, and strict compliance with anti-avoidance laws, such as India’s General Anti-Avoidance Rules. It can be beneficial to structure productions through SPVs, joint ventures, etc., to ensure tax efficiency and manage cross-jurisdictional obligations. This is particularly useful in the care of foreign production houses collaborating with Indian counterparts – setting up SPVs can help the foreign producer optimise withholding tax implications under the relevant DTAA (if applicable) and allow the local partner to participate in downstream revenue.

Tax Risks in Contracts

Entertainment companies must ensure that issues of tax obligations, profit sharing, and other relevant matters are specifically addressed in contracts. Where feasible, the indemnity clauses should be structured to cater to any associated risks. Companies should ensure their documentation is in order, including relevant contracts, vendor invoices, location permits, and audited financial statements, to make them eligible for tax benefits.

Companies may also need to ensure that SPVs and offshore entities, if used, demonstrate economic viability, such as local offices, employees, managerial control, etc. Shell corporations or treaty shopping arrangements are likely to attract scrutiny under GAAR or Principal Purpose Tests included in modern DTAAs.

Governments at both the central and state levels offer co-financing/subsidies for entertainment projects, including through the establishment of special agencies. 

Central/Federal Funding

India has the National Film Development Corporation Limited (NFDC), which was established with the primary objective of planning, promoting, and organising the integrated and efficient development of the Indian Film Industry. It operates under the Government of India’s Ministry of Information & Broadcasting (MIB). NDFC plays an active role in various aspects of an entertainment project, including production, distribution, promotion, and conservation.

Under its Development, Communication & Dissemination of Filmic Content (DCDFC) scheme, NFDC produces & co-produces feature films that reflect the diversity in Indian cinema and highlight unique aspects of Indian culture. The DCDFC scheme has a budget of over USD40 million for FY2024-25.

One of the key platforms that showcase such publicly supported films is the International Film Festival of India (IFFI), held annually in Goa. IFFI is organised by the Directorate of Film Festivals under the MIB, in collaboration with NFDC. The festival is a great platform for Indian films supported by government schemes to gain critical recognition and secure international distribution opportunities.

State Funding

Additionally, various states offer state-level co-financing or reimbursement schemes. For instance, Uttar Pradesh’s Film Policy (2018) provides subsidies of up to CR2 (approximately USD230,000) for films shot in the state, subject to conditions.

In India, current law does not recognise AI as an author, meaning AI-generated content itself isn’t eligible for copyright protection. The Copyright Act of 1957 states that for computer-generated works, the person who causes the work to be created is considered the author, provided that the work requires significant human intervention and originality. AI systems are not recognised as legal persons and consequently, they cannot directly hold rights or be an “author” in the traditional sense.

Recent rulings in an ongoing Delhi High Court case suggest that content primarily generated by humans, with AI merely as a tool, may be copyrightable.

However, enforcing copyright for AI-generated content without clear human authorship presents several challenges, as outlined below.

• Duration of Copyright – The standard 60-year protection after an author’s death becomes meaningless for an AI system which is immortal, making the duration ambiguous.
• Liability for Infringement – An AI can’t be sued, and pinpointing responsibility among developers, deployers, or users for AI-generated infringement is challenging, especially if the AI learned patterns rather than directly copied.
• Question of Originality – Proving the “originality” required for copyright is difficult if an AI system generates content without a clear human creative spark.
• Enforcement of Rights – Without a human “author,” it’s unclear who initiates infringement suits, licenses the work, or commercialises it: developer, user, or AI owner? The law’s silence creates significant uncertainty.

The surge of AI in India has led to several emerging legal disputes, particularly concerning its use in entertainment content. In an ongoing Delhi High Court case, a news agency has accused OpenAI of using its copyrighted content to train ChatGPT without permission, seeking an injunction and damages. The court is actively examining whether storing copyrighted content for AI training constitutes infringement, if AI outputs are derivative works, and if “fair dealing” applies to human-generated content used for AI training.

Protection of Personality Rights

Famous singer Mr Arijit Singh secured interim relief against platforms using AI to clone his voice for unauthorised recordings and endorsements. The court recognised a violation of personality rights and ordered the content to be taken down. In another case, Bollywood actor Mr Anil Kapoor obtained an interim order against the defendants for unauthorised use of his name, image, voice, and likeness via AI-generated deepfakes and digital avatars. A Public Interest Litigation (PIL) seeking regulation of deepfakes is pending.

Liability and Ownership of AI-Generated Content

A film produced in Karnataka faced legal questions regarding liability for defamation, obscenity, and hate speech within an AI-generated part of its script. Another film production company’s use of AI for music led to a copyright battle. The court awarded copyright to the programmers, underscoring the need for clearer legislation regarding ownership of AI-generated entertainment content.

Overall, legal precedents for the use of AI in entertainment are new and developing, indicating that existing statutes are struggling to address the complexities of AI.

The present trend for licensing footage for AI model training in India is uncertain, developing, and signals a clear need for regulatory clarity.

Key Developments

Growing legal disputes

The ongoing Delhi High Court case between an Indian news agency and OpenAI is a landmark dispute. It aims to determine if storing and using publicly accessible copyrighted material for AI training constitutes infringement under the Indian Copyright Act. This case highlights the judiciary’s challenge in interpreting existing law for generative AI.

Shift towards “opt-in” model

In the absence of specific legislation, India is moving away from an “opt-out” model (where content can be used unless explicitly prohibited) towards an “opt-in” framework. This means explicit permission or a regulated license will likely be required for commercial AI training. This “duty to license” concept could be similar to statutory licensing under Section 31D of the Indian Copyright Act, shifting the licensing burden to AI companies and ensuring fair remuneration for creators.

Role of collective licensing

Copyright societies (like IPRS for music) are increasingly seen as crucial for managing bulk licenses for AI training data. This approach simplifies the process for individual rights holders and aligns with successful models seen in the EU.

Government stance

The Press Information Bureau stated in February 2024 that the “Existing IPR Regime is well equipped to Protect AI Generated Content.” They affirmed that exclusive economic rights under the Copyright Act, 1957, require users of Generative AI to obtain permission for commercial use unless covered by fair-dealing exceptions. They stressed that IPRs are private rights, enforced by holders with existing civil and criminal remedies against infringement.

In India, residual payments for streaming content are still in early stages and are primarily governed by individual contracts. India does not yet have structured, union-led residual systems for screen performers, writers, or directors in the digital content space. While the Copyright Act, 1957, particularly after the 2012 amendments, does recognise authors’ and performers’ rights to ongoing royalties, the practical enforcement of these provisions remains weak, especially for screen-based content.

Most agreements in the Indian OTT ecosystem continue to operate on a flat-fee or work-for-hire basis, with producers often securing blanket usage rights for all forms of future distribution. Consequently, there is typically no automatic entitlement to residuals or royalties beyond the initial payment unless explicitly negotiated in the contract. They have only started gaining steam with the emergence of new-age streaming platforms, which are doing a wide business in the country, with contracts now including residual clauses such as payments for international distribution, promotion, and streaming across digital channels, etc. Issues such as royalty rights and audit rights have also become important.

A notable exception to this largely unregulated space is the music industry. Here, copyright societies like the IPRS play an important role in enforcing royalty rights for lyricists and music composers.

Lack of Standardisation

The digital-first content industry, though widely popular, is still in its nascent stages. Unlike the traditional cinema content, which has established benchmarks on issues such as revenue sharing, the same cannot be said for digital-first content. In terms of the commercials, contracts can often be driven by the negotiation power of the parties.

Opaque Revenue Metrics

In the case of digital-first content, streaming platforms have control over the data and analytics, which is not shared with other parties, leading to a lack of transparency regarding monetisation and viewership. These factors are often important to consider when considering revenue sharing models and can leave artists in a weaker position to start with during negotiations.

IP Ownership

Another issue is the long-term licensing/assignment of rights in the content, as streaming platforms prefer to have broad and exclusive rights. In comparison, the artists/creators would want to retain some exploitation rights to secure recurring gains.

In-season stacking refers to the parallel/rolling availability of television content on streaming platforms while the linear television broadcast is still ongoing. With viewers increasingly consuming content online, companies that have both traditional and online platforms make their content available across platforms. For example, content from Star’s TV channels is available on JioHostar online on an on-demand basis – this can lead to issues if there is contractual ambiguity and the applicable agreements do not explicitly grant such in-season stacking. The primary concern would be monetary, as it can differ across platforms. A party receiving payment for just one medium may object to the streaming of the content in another medium unless their concerns are addressed.

If they arise, such disputes are often settled privately or through ADR means rather than court litigation. The solution often lies in choosing/adopting the right monetisation model to ensure equitable compensation for all parties. To avoid this, production companies/platforms must negotiate digital rights upfront and, given the rise of in-season stacking, explicitly include clauses for it.

Labour unions and guilds have shown increased influence since the rise of content on OTT platforms, including exclusively digital content. Unions such as the Federation of Western India Cine Employees and the Screenwriters Association have been actively advocating for fair wages, improved working and safety standards, and formal work contracts.

These unions regularly issue advisories and circulars to producers, requiring them to employ only registered workers, adhere to wage structures, and ensure safety norms, among other requirements. Failure to comply leads to abstention from work, delayed projects, and legal actions. They have led producers to work with OTT platforms, now routinely building the relevant safeguards into contracts, covering wages, working hours, health insurance, and crew safety measures, along with other aspects. Additionally, obligations under the applicable labour laws also apply.

Below are a few common legal issues that arise in M&A transactions involving entertainment companies in India.

Chain of Title/Ownership

Establishing the chain of title is very important. Any gaps in such a title, especially for older content, can make the buyer vulnerable to potential infringement claims or litigation. Therefore, thorough due diligence is recommended to confirm that the seller has a clear, marketable title to all rights in the film or TV library, including underlying rights, and also consider all assignments and licensing in place.

Intellectual Property (IP) Risks

Ensuring that all IP forming part of a film/TV library is properly registered, not assigned or licensed to any other party, and does not have pending litigation is crucial. In this regard, AI-generated content raises questions about who owns it. Furthermore, underlying moral or performer rights granted to individuals participating in the film/TV project should also be addressed through waivers and consents. For example, the Copyright Act has a provision pertaining to unassignable royalty rights, especially for underlying literary, musical and dramatic works, which allow the author to retain a right in royalties, subject to a contract to the contrary. Ancillary rights such as clearances for dubbing, subtitling, merchandising, sequel/prequel rights, derivative works, remake rights, and digital/OTT rights, especially across various territories and languages, should also be considered to mitigate risks.

Regulatory Approvals

Some approvals are required from several authorities relating to M&A transactions for entertainment companies, such as:

• Competition Commission of India (CCI);
• National Company Law Tribunal (NCLT);
• Ministry of Information & Broadcasting (MIB);
• Securities and Exchange Board of India (SEBI); and
• Reserve Bank of India (RBI)/Foreign Exchange Management Act (FEMA).

Contractual Risks and Third-Party Consents

M&E companies have a myriad of contracts (eg, distribution agreements, licensing agreements with broadcasters/OTTs, talent contracts, music licenses, collective bargaining agreements with unions) that need to be considered.

Talent Agreements

Special attention is needed for contracts with actors, directors, writers, and other talent. These often contain clauses related to residuals, royalties, credit, publicity rights, and future participation that must be honoured or renegotiated.

Data Protection and Privacy

With the enactment of the Digital Personal Data Protection Act, 2023 (DPDP Act), personal data protection (eg, subscriber data, user analytics for OTT platforms, employee data) has become a significant concern. Therefore, the target’s privacy policies must be robust and aligned with the DPDP Act once it is made enforceable.

Labour and Employment Issues

Compliance with labour laws (eg, Industrial Disputes Act, 1947) is a key area of concern if employees are impacted as part of the M&A. This can involve obtaining consent from employees, dealing with trade unions, making termination payments, ensuring continuity or harmonisation of provident funds, gratuity, and other employee benefits after transfer, etc.

The combination of cable companies with studios and streamers raises several significant antitrust issues, many of which have increased as traditional distribution models converge with digital platforms.

The following are the primary antitrust issues.

• Horizontal and Vertical Integration: When a cable operator merges with a studio or streamer, it can result in both horizontal (between similar businesses) and vertical (across the supply chain) consolidation. This can reduce independent players, potentially creating a duopoly or oligopoly, especially if the number of major cable operators reduces from three to two.
• Content Foreclosure: A vertically integrated company (owning both distribution and content creation) may have the incentive and ability to withhold or unfavourably offer its popular programming to rival distributors or streaming platforms.
• Discriminatory Carriage: The combined entity could prioritise its own channels or streaming services on its cable systems, disadvantaging unaffiliated networks and reducing competition in programming markets.
• Bundled Offerings: The merged company may bundle its cable, streaming, and studio content that may undercut standalone competitors, potentially forcing consumers to purchase unwanted services or making it harder for rivals to compete.
• Exclusive Deals: Exclusive content deals or windowing strategies could further entrench the merged entity’s market power, limiting rivals’ access to popular programming.
• Reduced Incentives for Innovation: With fewer independent players, there may be less incentive to innovate in both content creation and distribution technology, ultimately harming consumers.
• Price Effects: Market dominance could lead to higher prices for both consumers (for cable/streaming packages) and advertisers, especially in regions with limited alternatives.

Regulatory bodies may also impose ongoing obligations, such as regular reporting or third-party audits, to ensure compliance and prevent anti-competitive practices. Regulators may require divestiture, price caps, or other remedies to address these concerns.

The Warner Bros Discovery split – separating streaming/studios from cable – reflects industry recognition of these antitrust challenges and the need for sharper focus and flexibility to address them.

In Indian M&A deals, representations and warranties (R&W) related to talent agreements are specifically tailored to mitigate risks and potential liabilities arising therefrom. Sellers typically represent that all talent agreements are valid, enforceable, and free of undisclosed liabilities or disputes. Warranties often cover compliance with applicable labour and intellectual property laws, payment of dues (such as royalties or residuals), and the absence of third-party claims.

To mitigate risk, these R&W clauses may include:

• materiality thresholds and knowledge qualifiers limiting seller liability to known or material breaches disclosed to the buyer;
• indemnity provisions protecting buyers against losses from breach; and
• conditions subsequent, and survival periods defining how long these warranties remain effective post-closing.

This structure ensures that buyers receive contractual assurances regarding the status and risks associated with talent contracts, while sellers can limit their exposure through careful disclosure and negotiated qualifiers.

A few issues related to talent contracts and legacy IP rights are listed below.

• It is crucial to determine whether talent agreements are assignable or if they contain change-of-control provisions that require consent from the talent. If consents are necessary, they should preferably be obtained before closing or made conditions precedent to closing.
• Review of underlying participation, royalties, or contingent compensation that may be triggered by the transaction, and negotiate a clear buy-out, assignment, or settlement to avoid future claims.
• Check for exclusivity, non-compete, and content restriction clauses that could limit the buyer’s ability to exploit acquired assets or pursue similar projects post-transaction.
• Ensure moral and termination rights are clearly defined and assess any ongoing obligations or risks from pending disputes or prior terminations.
• Verify the employment or contractor status of talent to avoid misclassification liabilities, especially in cross-border deals.

With specific regard to Legacy IP Rights, the key steps are:

• conducting thorough due diligence on the chain of title, verifying that all rights (including underlying works, music, and performances) are fully owned or properly licensed without any gaps or reversion risks;
• confirming the scope (media, geography, duration) of IP rights granted in past agreements, ensuring the buyer’s right to exploit content across all intended platforms;
• checking for unwaived moral or reserved rights (eg, approval, credit, or reuse rights) or third-party rights (eg, co-authors, music licensors) that could restrict exploitation or require ongoing clearances; and
• assessing whether prior agreements cover new forms of exploitation (like AI, digital, or merchandising) and negotiate top-up payments or amendments if needed.

Parties are becoming increasingly aware of their audit and transparency rights in profit-sharing contracts, especially those that do not have direct control over the cash flow. To ensure correct revenue distribution, audit rights play a critical role. Contracts in the industry now generally include express audit rights, a detailed scope, and specific frequency, methodology, and procedures for conducting financial checks. The contracts also address violations of such rights and provide the affected party with the right to terminate the contract and/or seek indemnity and compensation for lost profits.

Indian courts also actively enforce these audit provisions, emphasising their necessity for transparent financial practices and accurate profit-sharing. Robust audit clauses in contracts can significantly reduce disputes, build trust among collaborators, and ensure equitable revenue distribution.

Applicable Contract Law

Restrictive covenants, such as non-compete and non-solicitation clauses, are inherently challenging to enforce under Indian law. This is primarily because Section 27 of the Indian Contract Act, 1872, declares any agreement that restrains a person from exercising a lawful profession, trade, or business to be void. However, an important exception applies in cases involving the sale of goodwill, where such restrictions are viewed as a legitimate means of protecting the commercial value of a business being transferred.

When it comes to non-solicitation clauses, Indian courts tend to take a more flexible approach. These clauses are often viewed as extensions of obligations related to confidentiality or the protection of intellectual property, where the law provides additional support.

In the media and entertainment industry, such clauses are commonly negotiated not only with external partners, such as clients and vendors, but also with employees, freelancers, talent, and other creative collaborators. While these covenants are standard, their enforceability depends heavily on when and how they are applied.

Judicial Stance

Courts have consistently held that such clauses are enforceable during the term of a contract, whether in employment or commercial relationships. The rationale is to preserve the sanctity of the ongoing relationship and protect legitimate business interests such as trade secrets, client relationships, or confidential information.

However, enforcing these clauses after employment termination is far more difficult. Courts are cautious about imposing post-employment restrictions on individuals, particularly when there is an imbalance of bargaining power. Post-termination non-compete clauses are generally considered restraints on trade and may also violate an individual’s constitutional right to practice their profession freely.

That said, in B2B commercial contracts, especially those involving goodwill, courts have shown a greater willingness to uphold such covenants – provided they are reasonable in scope, duration, and geography.

Non-solicitation clauses, though technically enforceable, face practical challenges. Courts require clear evidence of active solicitation, which can be difficult to prove. However, if the employer can demonstrate that the breach also involves a violation of confidentiality or misuse of intellectual property, the chances of enforcement improve significantly.

Industry-Wide Changes

Emerging technologies, such as AI, virtual reality, and augmented reality, are having a significant impact on the entertainment industry and, consequently, on related contracts. Such technologies are widely used in today’s movies in India, especially to create VFX effects. The changes, however, are not significantly different from the use of such technologies in other industries, and the challenges being faced are largely the same across the board. Issues such as ownership and liability for AI-generated content, as well as privacy compliance, are increasingly being addressed in entertainment contracts.

Artist Contracts

Artist and/or talent contracts also now specify rights for digital likenesses and performances and cater for digital reuse and/or alteration using emerging technologies. In recent years, many Bollywood stars have been granted protection by courts against unauthorised use of their personality rights in the digital realm.

Business Structure and Registrations

Selecting the right business structure is a crucial consideration for an entertainment production company – it can be a sole proprietorship, partnership, limited liability partnership (LLP), private limited company, or other similar entities, each offering distinct advantages in terms of liability protection, tax benefits, and compliance obligations. Companies must also be mindful of applicable compliance, such as registration with the MIB, obtaining necessary licenses and approvals for content production and distribution.

Guild/Union Memberships

Production companies can opt to be part of industry bodies such as the Producers Guild of India, which represents many producers of audiovisual content in India. These organisations collaborate on regulatory challenges, policy matters, copyright protection, taxation, and ease of filming, among other issues, in the country. They also help in imposing codes of conduct in the industry, covering working conditions, payment scales, IP compliance and protection, maintaining overall standards in the industry, etc.

Liability Protection

First and foremost, production companies need to have a comprehensive insurance coverage for risks associated with content production (including injuries, unwarranted delays), potential defamation claims, IP infringement, employee issues, etc. Other issues include compliance with labour and employment laws, IP laws, applicable state laws, etc. Companies would also need to consider issues such as potential disputes with vendors, internal governance structures, and approval from the film certification board, if applicable.

Streaming platforms in India adopt different monetisation models, including FAST (free ad-supported television), AVOD (ad-supported video on demand), and SVOD (subscription video on demand), each with its own nuances.

FAST Model

The FAST model delivers scheduled, linear-style content streams for free, monetised entirely through advertisements. Here, platforms generally earn revenue from mid-roll ads. The considerations in this model include ad inventory allocation (who controls ad space – the platform or the content owner), ad placement, and compliance with applicable laws, as well as revenue sharing, including audit and transparency rights.

AVOD Model

AVOD platforms allow users to watch on-demand content for free, supported by targeted advertisements. Platforms like YouTube use this model. The considerations in this model include content rights licensing with explicit clauses on ad overlay permissions, data protection compliance regarding user profiling and targeted advertising, liability for ad fraud or data misuse, and other relevant factors.

SVOD Model

SVOD is the premium model where users pay a recurring subscription fee to access ad-free content. In India, platforms like Netflix and JioHotstar follow this model. The considerations in this model include exclusive content licensing, subscriber metrics, minimum guarantees, and back-end revenue shares in co-productions, as well as data access rights for creators (eg, viewership numbers).

Interactive entertainment formats such as Netflix’s “Bandersnatch”-style interactive content offer unique practical challenges. Such content is still in its nascent stage in India, and a recent example is the recently released Housefull 5, which offers two endings to viewers, albeit with them simply choosing one of the two options and not truly interactive in the sense of being interactive.

From a legal standpoint, artist/talent agreements must account for multiple storylines/outcomes. Since actors or writers may work on several branching narratives, compensation structures should reflect this – it can be done through lump sum fees for all outcomes or per-storyline remuneration. It’s also essential to address how bonuses, royalties, or back-end payments will be handled if only certain narrative paths become popular. IP and remuneration clauses must be carefully drafted to cover all potential story paths. Other considerations would be ownership of derivative content, sequels based on specific narrative branches, or user-generated remixing if allowed.