Product Placement vs Surrogate Advertising in OTT Shows: The Grey Zone in Indian Media Law

Introduction

Over the last few years, OTT platforms like Netflix, Amazon Prime Video, Hotstar and others have become the primary source of entertainment for a large section of Indian audiences. As more viewers move away from television and towards ad-free subscription models, brands have quietly shifted their strategy. Instead of traditional commercials, they now prefer to appear inside the content through props, dialogue mentions or storyline integrations. This rise in product placement has created a new set of questions about transparency and regulation. Even more concerning is the fact that some of these placements start looking suspiciously like surrogate advertising, especially when they involve categories such as alcohol, gambling or crypto. Indian law has strong rules against surrogate promotions on TV, but OTT platforms exist in a space where these rules don’t directly apply. This makes the entire ecosystem a grey zone—one that needs closer examination.

Understanding Product Placement in OTT Content

Product placement simply means showcasing a branded product within the scenes of a movie or series. On OTT platforms, this appears in very common ways: a character using a particular smartphone, eating from a well-known food delivery app, or driving a specific car model. Sometimes it’s subtle a logo in the corner of a frame. Sometimes it’s more direct characters casually praising a product as part of their conversation.

In theory, product placement is meant to blend naturally with the narrative. It’s not supposed to feel like an ad. ASCI has general guidelines on brand integration, but they mainly focus on traditional advertising and social media disclosures. There is no specific legal framework in India that governs product placement in OTT originals. As a result, OTT platforms enjoy a wide degree of flexibility. They can allow brands to be placed inside content without needing to issue on-screen disclaimers or disclosures. This blurred space makes it difficult to differentiate organic creative choices from paid promotions.

What Exactly is Surrogate Advertising?

Surrogate advertising is a familiar concept in India. Because direct advertising of alcohol, tobacco, pan masala and gambling is heavily restricted, brands often promote “proxy” products instead—soda, bottled water, music CDs, or other harmless items that carry the same logo and colour scheme. The idea is to keep the brand alive in consumers’ minds without technically breaking the law.

The Consumer Protection Act and ASCI’s guidelines treat surrogate advertising as a serious violation, especially if the intention is to promote a banned or restricted product. But these rules were written with television, print and digital ads in mind not with the idea of brands being woven into entertainment content. When the same proxy branding appears inside an OTT show, it becomes much harder to call it an “advertisement,” even though its influence can be the same.

Why OTT Becomes A Grey Zone

OTT platforms sit outside many traditional regulatory structures. The Cable TV Networks Act—which contains the advertising code and rules against surrogate promotions does not apply to OTT. The IT Rules 2021 and 2023 govern content classification, age ratings and grievance redressal, but they say nothing about advertising inside shows. Even the voluntary self-regulation framework adopted by major OTT players does not go into detail about product placement or surrogate branding.

This creates a convenient loophole. Brands that are restricted from advertising on TV can still be seen in OTT content not in the form of ads, but as part of the storyline. Since there is no legal requirement for platforms to declare when a show contains paid placements, viewers have no way of knowing whether a scene is creatively honest or commercially influenced. The combination of high engagement and low regulation has made OTT a tempting space for indirect brand promotion.

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Examples Where Placement Begins to Look Like Surrogate Advertising

Anyone who regularly watches Indian web series will recognise a few patterns. Alcohol brands often appear with the same bottle design, colours and fonts as their real-world versions, but with a slightly changed label usually claiming to be a “tonic water” or “non-alcoholic beverage.” Even if the product technically fits the law, the branding is unmistakable.

Similarly, betting and fantasy gaming apps, which face strong restrictions on traditional advertising, often make cameo appearances as apps used by characters. The scenes may not comment directly on the platform, but the visibility is enough to create brand familiarity.

Crypto exchanges, whose ads have been scrutinised after investor protection concerns, also find space inside OTT content. A character trading crypto or discussing exchanges becomes a subtle way of placing the brand into the story.

While none of these may count as formal advertisements, their impact on audiences is similar. The goal is brand recall and OTT makes that very easy.

Is Product Placement the Same as Advertising Under Law?

This is where things get tricky. Under the Consumer Protection Act, even indirect promotions can be treated as advertisements if they influence consumer behaviour. ASCI also warns against misleading portrayals. But OTT platforms can easily claim that the brand is part of “creative expression,” not a promotional message.

Indian courts have not yet clarified whether a brand shown inside a web series should be treated as an advertisement. In the absence of judicial or statutory guidance, OTT platforms and brands enjoy a lot of freedom. Unless the government or regulators explicitly extend advertising norms to OTT placement, this ambiguity will continue. At the moment, the legal approach favours creators and advertisers, leaving consumers without clear indicators of when they are being marketed to.

Why Consumers Should Be Concerned

Most viewers do not realise when a placement is paid for. Unlike YouTube or television, OTT platforms do not show any “sponsored content” disclosures at the beginning or end of a show. This lack of transparency affects consumer choice and perception. When a character we relate to uses a certain product as part of the story, the influence can be subtle but powerful. It can shape brand preferences without the viewer ever understanding that the scene was planned as an advertising tool.

Many countries, including the UK and those in the EU, require explicit disclosure when product placement is used. India does not have any such requirement for OTT. Without regulatory intervention, hidden advertising can easily slip into mainstream content, normalising brand messaging in a way that is neither transparent nor fair.

 

Conclusion

OTT platforms have changed the way India consumes entertainment, and with that, they have also changed the way brands reach audiences. The line between product placement and surrogate advertising is becoming increasingly thin, especially as restricted product categories find creative ways to stay visible. The absence of clear legal rules leaves a gap that advertisers can exploit, and consumers remain unaware of when they are being marketed to.

As the influence of OTT continues to grow, India will need clearer disclosure rules, better definitions, and stronger oversight on in-content brand presence. Regulation should not stifle creativity, but it must ensure fairness and transparency. Without that balance, OTT will continue to operate in a grey zone—one that benefits brands, but leaves viewers in the dark.

Author: Rishabh Sharma, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.