India: The Return Of The Nightingale: An Insight Into The IP Licensing Regime In The Music Industry In India

Last Updated: 15 May 2018
Article by Samridh Ahuja

Most Read Contributor in India, July 2018

Music Industry in India has Seen the Light

"It's a very frightening situation because it's only the royalty we count on. The music industry has completely changed, people now believe in buying and consuming music digitally. If we have no stake in our music, then we won't have anything left."5
-Ram Sampath, Music Composer

This statement was made much before the enforcement of the Indian Copyright (Amendment) Act (hereinafter referred as the "Amendment Act") 2012, in an era devoid of rights available to performers. "Performers rights", was a concept introduced only in the Amendment Act. Prior to this amendment, the film producers used to make contracts with the music composers and artists on a work-for-hire basis with only a flat fee as remuneration, thus, shutting out any possibility of royalties for the creativity. All the royalties that came in as a result of the commercial use of the underlying music composition/ song rendition went to the author of the copyright, namely, the producer. In a country where most popular music comes from films/movies, the performers in general have suffered immensely over the years.

Power is in Words: The Story of Javed Akhtar

Javed Akhtar, a famous writer-composer-lyricist, was not paid royalties for years, owing to the outdated Copyright law that prevailed for long. The fight for royalties started long back in 1960s itself, when Lata Mangeshkar, also regarded as the "Nightingale of India", first raised her voice in demand.6 In the words of Javed Akhtar, "Lata Ji would have been one of the three richest women in the world7, if she would have rightfully been given her royalties". Javed Akhtar is the man who carried the movement forward, fought till the end, and is the reason that the Indian Copyright (Amendment) Act, 2012, has even seen the light. He fought this battle alone for 10 years, but the results of his struggle were overwhelming and appreciated by the music industry at large. Section 38A of the Amendment Act, 2012, was a shining armor for the performers in the music industry in India as it introduced the law that favors performers' rights. Royalties are now attributed rightfully.

Licensing Explained

With the advent of the Amendment Act, 2012, Performer's Rights in India are now in coherence with Article 14 of the TRIPS Agreement and are also compatible with Articles 5 to 10 of the "WIPO Performances and Phonograms Treaty" (WPPT). Indian Music industry is now highly regulated and the Copyright Board has been put in place under the Amendment Act to adjudicate on the issues relating to distribution of royalties in the industry.

In India, two leading copyright societies exist, namely, Indian Performing Rights Society (IPRS) and Phonographic Performance Ltd (PPL). "IPRS manages the rights of lyricists and composers and issues licenses to perform publicly, the essential works assigned to it either directly or indirectly or through its set up of associated foreign collecting societies, while PPL controls the rights of record labels and companies which create sound recordings and issues licenses for collaborative sound recordings allocated to it by the record companies to the public upon disbursement of valid license fees/royalty."8

Also, with the Copyright (Amendment) Act, 2012, coming into force, singers have united to form another copyright society called Indian Singers' Rights Association, which was registered in 2013. ISRA has 249 Indian singers as its members, with a board consisting of the famous singers like Lata Mangeshkar, Pankaj Udhas, Alka Yagnik, Sonu Nigam.9 On the other hand, the composers wanted to continue being a member of IPRS, which has been reconstituted under the Amendment Act. They are not of the opinion that a new copyright society be created, but are not averse to the idea as well.10

The functioning and working of the copyright societies in India has been well explained in the case of - Entertainment Network (India) Ltd vs. Super Cassette Industries Ltd & Ors11. In this case it was stated that the existence of the copyright society is for the benefit of the copyright holder. The society must help the copyright owner in a way that he/she is able to exploit his/her intellectual property rights in a structured manner. "The society grants license on behalf of the copyright owner, files for litigation on their behalf not only for the purpose of enforcement but also protection to enforcement of the copyright owner's right. It not only pays royalty to the copyright owner but is authorized to dispense the amount collected by it amongst its members."12 But the functioning of societies is under the scanner nowadays, as societies have been using this law for getting personal gains, thus making the enforcement of this law redundant.

Industry Standard

There has always been complaints with the royalties being charged by PPL and IPRS. The functioning of these societies has been underwhelming and levying of high royalties has been one of the highlights. There is no fixed royalty mechanism, no structure whatsoever. It does not come as a shock that these societies have been subject to endless litigations.

A recent order of the Copyright Board has favored the Terrestrial Radio industry, by setting a fair pricing royalty rates. The Copyright Board fixed the royalty to be paid by radio stations to the music owners at 2% of the net advertising revenues. This was a relief, as it reversed the regime of charging unacceptably high royalty rates.13

Piracy Lets You Down

"KPMG notes that just 1%-2% of music is consumed by way of legal purchase in India, whereas 99% of the music consumption is still illegal."14 If these reports are to be believed, piracy is eating up the music industry at an alarming rate. It's true that piracy has been rampant all over the world, but it has apparently very strong roots in India.

Digital Media: Hope or Despair?

One could only think that looking at the fallouts in the music industry in India; digital media must have made a mark but the current scenario is rather disappointing. With the consumer market shifting to digital services for obtaining music, the laws have not been keeping pace. Owing to the high royalty rate regime, "One of the four major legal music streaming services - Dhingana - shut down, leaving only Gaana.com, Saavn, and Hungama as the remaining digital music outlets broadcasting music from India for consumption in India and abroad."15

Conclusion

There is still no fixed royalty rate set by the societies, and the rates charged are so high that it becomes really difficult for the digital media services to survive in the music industry. Shutting down of "Dhingana" is a consequence of the same. Rampant piracy is another evil factor that needs urgent attention in India.

Law has to be made less ambiguous and more efficient, if music industry in India has to be at par with global market for music. Even after a terrible run and fall scenario, KPMG projects that- "India's recorded music business will nearly double over the next five years, bringing in an annual income of 18.9bn Indian Rupee (US $300m) in 2019."16

The legend Javed Akhtar, the man who in a way shaped the music industry, has recently been elected as the Chairperson for the reconstituted IPRS. "A new chapter is yet to begin", he says17, and we agree.

Footnotes

5. Sonil Dhedia, "Lyricists, music composers decry HC judgment", Rediff, See http://www.rediff.com/movies/report/lyricists-music-composers-decry-court-judgment/20110803.htm (last assessed on April 11th, 2018).

6. Shubha Shetty-Saha, "When royalty for Bollywood musicians is out of tune", mid-day.com, See http://www.mid-day.com/articles/when-royalty-for-bollywood-musicians-is-out-of-tune/226402 (last assessed on April 11th, 2018).

7. Subhash K Jha, "Lata would be one of the world's three richest women: Javed Akhtar", DNA (Daily News and Analysis) India, See http://www.dnaindia.com/entertainment/report-lata-would-be-one-of-the-world-s-three-richest-women-javed-akhtar-2146790 (last assessed on, April 11th, 2018).

8. Divya Srinivasan, "Singing A Different Tune? – Issues Pertaining To Collection Of Royalties By Copyright Licensing Societies In India", Mondaq, See http://www.mondaq.com/india/x/416410/Licensing+Syndication/Singing+A+Different+Tune+Issues+Pertaining+To+Collection+Of+Royalties+By+Copyright+Licensing+Societies+In+India (last assessed on April 11th, 2018).

9. Anand and Anand, "'Musical Scales' in Indian Copyright Law: Introducing the Right to Receive Royalty (The R3 Right) of the 'Performer Owner' in a Song", Asia IP, See http://www.asiaiplaw.com/article/41/2118/ (last assessed on April 11th, 2018).

10. L. Gopika Murthy, "Artists unionize and register copyright societies to avail of benefits under the Amended Copyright Act", spicy IP, See https://spicyip.com/2013/06/artists-unionize-and-register-copyright.html (last assessed on April 11th, 2018).

11. 2008 (37) PTC 353 (SC).

12. Supra Note 4.

13. The Times of India, "Onerous licensing regime killing legal digital music", The Times of India (Business), See http://timesofindia.indiatimes.com/business/india-business/Onerous-licensing-regime-killing-legal-digital-music/articleshow/30699483.cms (last assessed on April 11th, 2018).

14. Tim Ingham, "India's music business will almost double in value by 2019 – KPMG", Music Business Worldwide, See https://www.musicbusinessworldwide.com/indias-music-business-will-double-by-2019-kpmg/ (last assessed on April 11th, 2018).

15. Supra Note 9.

16. Supra Note 10.

17. IANS, "New chapter has started: Javed Akhtar on revamped IPRS", Indian Express, See http://indianexpress.com/article/entertainment/bollywood/javed-akhtar-on-revamped-iprs-4602485/ (last assessed on April 11th, 2018).

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