On music copyrights: White noise amidst music to ears -Dr. Subhash Chandra Pandey

Fulsome obituaries continue to pour in for legendary Lataji, highlighting her enviable repertoire of songs and various aspects of her personality.

This post is a takeoff from her pioneering role as champion of singers’ rights to receive proper royalty in a commercial world where others profit from their singing talent.

Here is an attempt to highlight the music copyright and licensing issues.

There can be no reliable estimate of total personhours spent on listening or watching music but crude industry estimates indicate over 70% of music being film songs delivered through various channels (cassettes, CDs, online videos/audios, streaming apps, radio and TV) – some paid, some pirated.

Recorded music is a work of art created by a team – singer, lyricist, music director, accompanying junior artists and technicians in post-production. The legal copyright is secured by the film producer and the music company marketing the music. The rights of individual artists are not explicitly legislated. These remain matters of contractual arrangements between them and the copyright holder.

Film makers take the risk of success and failure of films and having paid and for and purchased the recorded output alongwith all rights, they are the legal owners of the copyright.

There are different models of remuneration to actors, playback singers and studio support personnel. Mostly it is fixed fee model. Like authors expecting royalty from sale of books, popular singers also expect royalty if music companies profit from sale of music. It is quite a complicated affair because music piracy, though declining, has been a major problem with us.

The music industry is estimated to lose about ₹1,000 crore a year due to piracy, which, according to 2019 ‘Digital Music Study’ – sponsored by International Federation of the Phonographic Industry and Indian Music Industry – makes up for 67% of the market — the global average being 27%.

Instead of buying a CD, one would get choicest songs recorded on blank cassettes/CDs or download on mobile/laptop using illegal P2P (peer-to-peer) apps, streaming apps, stream ripping websites or infringing websites. Short video sharing apps are the new bugbear for the music industry as many of them have no licenses from music companies.

Radio is the most popular medium of music consumption. From the days of BINACA GEETMALA, VIVIDH BHARTI, JAWANON KE LIYE, radio has been a popular medium of dispensing music. [Remember JHOOMARI TALAIYA SE FARMAISH?] Chatty RJs continue to enjoy celebrity status.

AKASHVAANI has yielded significant space to private channels.
In 2000, FM radio waves were offered to the private sector for the first time. 108 FM radio channels were auctioned in 40 cities. In 2001, Phonographic Performance Limited was created as the copyright society to administer the radio broadcast rights for majority of sound recordings. PPL sought to fix tariff @ Rs.2400 per needle hour. The FM radio stations approached the Copyright Board for a compulsory license under Section 31 of the Copyright Act.

A copyright holder can deny access to copyrighted content unless he gets the price asked for but the law allows the government to force copyright holders to compulsorily grant license to broadcasters in public interest [poor man’s entertainment, infancy of the radio industry, limited access to music for people in remote areas].

In 2002, the Copyright Board asked music companies to allow radio broadcasters to broadcast music under COMPULSORY LICENSING provision. It fixed an interim rate – Rs.1200 for peak hours with formula based deduction for other periods and also for the ‘B’ and ‘C’ categories (smaller and less populous) cities.

The Board’s Order remained under protracted litigation till the Supreme Court upheld (2008) the right of the Board to grant compulsory license to multiple radio stations subject to fixation of license fee based on proper data.

In 2010, the Copyright Board passed final tariff order mandating the broadcasters to pay 2% of Net Advertising Revenue (NAR) as compulsory license fee to the owners of copyrights of sound recordings for next 10 years.

This license fee was due for review in 2020 but the Intellectual Property Appellate Board (IPAB) which took over this function of the Copyright Board in 2017 decided to maintain status quo ante.

(Section 31D added to the Copyright Act, 1957 in 2012 empowered the Copyright Board to fix royalty rates for performances or radio or television broadcasts of literary and musical work and sound recordings. In 2017, these functions of the Board were transferred to the IPAB through another legislative amendment. )

Whether the authority extends to internet broadcasts within its scope remains contentious.

Protectionist policies are often adopted to protect infant industries. In 2010 the radio industry was relatively at a nascent stage. By 2020, its annual turnover had reportedly jumped to about Rs.3,100 crore, nearly three times that of the recorded music industry. Some governments heavily spend on radio advertising riding on the popularity of FM radio channels.

So music industry has been seeking a raise in license fee. However, in a setback to them, IPAB was abolished on 4th April 2021 as part of restructuring of various tribunals and IPAB functions were transferred to High Courts. That delays the process of license fee revision.

While radio music remains so mired in the revenue sharing logjam, radio delivered music is facing increasing competition from streaming services and apps bundled with mobile phone subscriptions. Two of the top-3 local streaming services, JioSaavn and Wynk Music are owned by telecom companies [Reliance Jio and Airtel, respectively.] The third is GAANA.

Spotify, YouTube Music and Apple Music have also entered Indian market, supposed to be the fastest growing music market in the world. It has little to do with the young age profile because music especially digitally delivered music is now reaching far and wide across all age groups. Video-rich YouTube continues to be favorite channel of music delivery for dilettante-ish explorer.

Private audio/video albums and regional music are also growing fast and the whole market is much bigger than the days when Lataji first raised her voice to assert singers’ right to get fair royalty.

With over 45 crore smartphones and cheap data packs, online music streaming is growing fast like over-the-top (OTT) video streaming players. Streaming is on the upswing as work from home gains traction. “Watching” music seems more popular than “listening” to it as seen from viewership statistics YouTube now banned TikTok even after discounting the traffic pumped up through paid agents.

YouTube is free, visual, and easily accessible. but it can’t wholly substitute streaming services since music is also consumed in off-screen, on-the-move settings.

Streaming services offer three models of subscriber-paid music: ad-free, HD quality and unlimited downloads.

As per industry estimates, only about 1% of all streaming users pay for premium subscriptions directly. Reportedly, on top of the 1% of direct premium subscribers, there are now another 14% paid users of streamed music are subscribers of “bundled apps” of telecom service providers. That 15 % of “paying users account for almost 55% of all streaming revenue.

India’s recorded music industry is ranked No.15 in the2019 Global Music Report. According to an EY report, Indian media and entertainment industry was valued at Rs.1,38,000 crore in 2020 and is estimated at Rs.1,79,000 crore in 2021 and projected to grow to Rs.2,23,000 crore by 2023 due to accelerated digital adoption among users across geographies.

Indian films industry is a major component and music is an important part of Indian films. Regional film industry is growing fast. Advertising revenue in India is projected to reach Rs.91,500 crore by 2023 from Rs.59,600 crore in 2020. Subscription revenue is projected to reach Rs.94,000 crore by 2023, from Rs.63,100 crore in 2020. The music industry is expected to reach Rs.2300 crore by 2023 from Rs.1500 crore in 2020.

The streaming subscription rates are low when compared to what the users would have had to pay if they had to buy CDs/Cassettes. Plus the tremendous convenience that comes with digital consumption.

There is need to make a substantial dent on music piracy. This is the time to say an emphatic no to piracy. It is the irritating white noise that we need to get rid of. That would be a befitting tribute to the legendary singer whose mellifluous voice had raised the issue of singers’ rights as early as in the 60s.

Neither the Copyright Board nor IPAB had attempted any public consultation on revenue sharing among different stakeholders involved in creating recorded music. It may not even be within their remit to regulate as the producer who has paid for and purchased the output alongwith all rights for a lumpsum.