The music and radio industries have never been the best of buddies anywhere in the world, especially in India. In a fiery piece published on the online news portal – Radio & Music – Achille Forler, the Managing Director of Universal Music Publishing slams the radio industry for being “parasites” and living off the music industry. Forler, has every reason to be infuriated with the radio industry, especially since the radio industry has been comprehensively thrashing the music industry in legal battles across the country.
There are two main legal issues at play today between the radio and music industry:
The first is the issue of royalties paid by the radio industry to the music industry. In 2010, after more than a decade of litigation the Copyright Board had fixed the royalty rate at 2% against the 20% demanded by the music industry. That decision which is yet to be over-ruled was seen as a huge defeat for the music industry. We had blogged on some of those issues over here.
The second legal battle, which is pending before the Supreme Court, is whether the radio industry has to pay royalties for only the sound recordings or also the music and lyrics. Up until last year, the radio and hospitality industry were paying royalties for all three classes of works, when three different High Courts held otherwise. We had blogged about one of those cases over here.
A particularly interesting statistic that is revealed by Forler, is the fact that FM radio broadcasts hardly 0.5% of the entire repertoire of music that is licensed to them. Forler questions the radio industry on why it concentrates only on the 0.5% super-hit songs instead of promoting new artists and music. As per this argument radio stations which invoke compulsory licensing on the grounds of ‘public interest’ should be promoting all kinds of music and not just super-hit songs.
Thanks Mr Prashant Reddy for sharing about legal issues between the radio and music industry
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Interestingly, the radio broadcasters don’t seem to be in a mood to challenge the amendments. While most of the affected parties have already filed petitions challenging the amendments to the Copyright Act, the radio broadcasters seem to be silent spectators for the moment (except for the interventions).
As far as the 2nd legal battle is concerned, I guess the position stands clear with the amendments to S.18 and 19. Royalties are clearly payable for sound recording and exploitation of underlying works. The judgments passed by Del, Bombay and Madras HC would thus stand overruled.
Wish Mr. Fohler had thrown some light on the issue of publishing rights in India. Composers seem to demanding retention of publishing rights without understanding that in India there is no clear delineation between publishers and music labels. And if the existing trend is to be changed then we need a better mechanism for implementation of the amendment. The Government seems to be stating that under contract of service producer can only retain synchronization rights and not the performing rights. Mechanical reproduction rights are royalty paid to authors on copies of their works being made, while sound recording rights being owned by the producer/ recording company. With varied interpretations floating in the industry, no clarification from the Government, compulsive strategies adopted by different associations, the situation seems to be completely chaotic.
Some in the industry are advocating that royalties to authors can be directly paid by the entity communicating the work to the public (including radio broadcasters). This line of thought seems to be incorrect as rate of royalties should only be determined by the copyright societies. No one seems to be coming forward and answering as to what royalties have been paid since 21st June, 2012/ 14th March, 2013. Why is the Registrar not re-registering IPRS and how much more time to get the implementation process in place. How difficult is it to streamline the process and bring some clarity?
Anushree,
You have very pertinent comments and queries on the aftermath of the Amendments. But you shouldn’t be surprised at the general state of confusion and uncertainty that you highlight; just remember the context wherein the Amendments were passed, unanimously, by Parliament: they were vociferously opposed by the film and music producers. You will also note that, to the exception of Saregama, the companies that opposed the Amendments are family-owned or controlled; I don’t recall a single listed company coming out against the Amendments or challenging them in Court. To simplify, the music and film industries were largely an Old Boys Club who had made up their own rules and who squashed any attempt to challenge them by keeping an army of lawyers and by controlling the two Copyright Societies; Spicy Ip has blogged regularly and, I think, accurately on this issue.
To give you an idea of how inefficient this system is for everybody, including the Old Boys, you just compare the annual income of IPRS and it’s sister Societies in the BRICS countries: IPRS collects USD 9M, the Russian Society (much younger than IPRS) collects USD 50M and Brazil collects USD 252M. You can check these figures on http://www.cisac.org
Do I need to say anything more?
Nevertheless, some of the things that you said keep me thinking and I will address them in a post maybe later this month.
Appreciate your response Mr. Forler. Change always comes with some inconvenience; hence the post amendment chaos is definitely not surprising. But what is shocking is to see that despite knowing the deplorable and non transparent functioning of the copyright societies, nothing is being done about it (or even if it is, it’s not being conveyed to the public). We all know that this cannot go on in perpetuity. It would be a good 2-3 years by the time the 6 petitions challenging the copyright amendment are finally decided by the Supreme Court. The industry cannot function smoothly with each side trying to circumvent the Amendment in its favour. Issues like advance royalties are not unknown.
The short point I was trying to make regarding publishing rights was the analogy being drawn between publishing rights in India and the West. There has been a growing emphasis by the Indian composers of late to retain the publishing rights with them (which in my understanding refers to ownership in the composition/ work developed by the composer), in which case it is difficult to understand how ringtone, CBRT and other derivative rights would be continued to be exploited by the music labels.
I was also amazed to read in your article that singers are being paid royalties. To my knowledge, waiver of exclusive rights of performers including royalty rights is usually taken in most performer rights agreements. I wish we had some more info w.r.t. royalty collections taking place in ISRA. Look forward to seeing your post on this subject soon.