Copyrights, Music Licenses and New Year Parties

The Hindu recently reported that the Phonographic Performance Ltd.(PPL), a registered copyright society under the Copyright Act, is demanding that all commercial establishments start paying up for the music that they will be playing at year-end parties failing which action will be taken against them for copyright infringement. The report quoted PPL as saying “Musical nights and customised New Year packages are some of the most prolific means of revenue for pubs and hotels. A New Year’s Eve bash cannot be imagined without music, yet when it comes to paying for the commercial use of music, profit makers choose to evade the licence fee.”

Before going any further let us first de-mystify the exact objective and legal standing of PPL. The PPL is a Copyright Society under the Copyright Act. They represent the rights and interests of over 137 recording companies including biggies such as HMV (Sa Re Ga Ma India), Tips, Universal, Venus, Sony Music. As a Copyright Society PPL’s main function is to enforce the copyrights of their members especially rights such as Broadcasting, Telecasting, Webcasting and Public Performance. The rationale for having copyright societies is that it is impossible for interested parties to personally contact each and every copyright owner and negotiate a license to publicly perform their music. Therefore the Copyright Society rectifies this market failure of lack of complete information by representing all interests collectively. Anyone wanting to publicly perform any of the music, the copyright of which is owned by the members of the PPL, then in that case they have to first approach the PPL which will negotiate the license fees depending on the size and nature of the establishment. If licenses aren’t bought first the copyright society initiates legal action against the violator. Penalties for copyright infringement under the Copyright Act are imprisonment and heavy fines. The royalties are then disbursed to the respective copyright owners. The ultimate aim is thus to ensure that musicians are compensated for the use of their creativity by others. (For a Jamaican take on Copyright Societies, please, please, please click on this link and do turn up the volume!)

As far as I know copyright societies in India have never aggressively enforced the rights of their members. The American Copyright Societies such as the American Society of Composers, Authors and Publishers (ASCAP) and the B.M.I. on the other hand are notorious for their ruthless enforcement of copyrights of their members. Labelled as the ‘music mafia’ & ‘court protected thieves’ by many in the West these Societies have been the target of dedicated hate sites (viewer discretion recommended!) exposing their alleged extortionist tactics. Admittedly some of the stories of ASCAP & BMI are chilling and shocking to say the least especially the enforcement actions against small businesses.

The overall objective of the enforcement by Copyright Societies, however remain fair and noble. Revenues for establishments such as pubs and discotheques depend solely on the genre of the music that is played by them. For example if a Delhi discotheque isn’t playing Bangra-Pop they might itself file for bankruptcy. The reason that Pecos or Mojos are such famous pubs in Bangalore is because of the music they play. Considering that most of the discotheques charge a few thousands per person for end year bashes it is only fair that they share the revenue with the copyright owners. The Hindu report quoted music license rates of Rs. 40,000. I’m sure that figure is going to vary over establishments and the matter will most definitely end up with the Copyright Board.

What remains to be seen is whether or not PPL intends to enforce these rights on a daily basis or whether its going to do so only for big events.