Music licenses are the most crucial way music creators and publishers get royalties for their musical works. It provides legal permission to someone who’d like to utilize their work. Business units do not have the authority to play music in public places for any commercial purpose without acquiring a music license. Copyright Act, 1957 made it mandatory for all the cafes, restaurants, hotels, pubs, bars that play pre-recorded music on their premises to obtain a music license.
The Indian Performing Right Society Ltd. (IPRS) aims to drive awareness towards Fair Pay and Fair Play of music by emphasizing the significance of abiding by the licensing norms. In our monthly series #AskAmeet with leading IP lawyer – Ameet Datta, we will try and explain the legal aspects surrounding the music industry in as simple terms as possible. You can mail us your queries. We will try to accommodate as many as possible.
In this article titled, Music Licensing Matters, we will highlight the prevailing norms, unknown & lesser-known facts related to Music Licensing, ways of procuring music licenses, and its benefits.
Can you explain music licensing and its forms in a layman language?
Practically speaking, music licensing is a term under the Copyright Act which is a ‘bundle of rights. There are rights involving ‘works’ and ‘underlying rights’. One of them is the Sound Recording right which is exclusively owned by the owner of the sound recording. If an establishment plays copyrighted sound recordings for public consumption, they have to avail of a music license. The music and lyrics, in a sound recording, are also communicated to the public and require a separate license. The license is not bound to India alone but is a global practice.
Every establishment, using copyrighted sound recordings for public and commercial consumption, has to effectively take two different music licenses. One is for the sound recordings which can be procured from societies like Phonographic Performance Limited India (PPL), The Recorded Music Performance Ltd. (RMPL), and Novex Communications. The second license is for the underlying rights which are held by the authors, composers, or publishers who are members of IPRS and the license is solely available with the Indian Performing Right Society Limited (IPRS).
These are Public Performance rights and every establishment has to acquire these two licenses which are available through a standardised procedure.
How can a user acquire them?
Over the last 5 years, the procedure has become fairly simple. Societies like IPRS, which deal with the underlying rights as they are assigned to do so by their members, have an online application facility on their website (www.iprs.org). If you need to obtain a license for a few shortlisted songs, you can avail of the ‘song search’ option on the IPRS website and select the songs as per the composer, lyricist, or publisher’s name. IPRS has a ‘no cash’ policy so one can transfer the fees digitally. There is a tariff card available on the website from where one can figure out their license fees. The entire process is online and fairly simple.
What is the cost involved in acquiring it? Is the cost feasible for small businesses? How is the fee structure determined?
IPRS, being a registered royalty collection society, is under obligation to create and publish a tariff scheme that is approved by its General Body. It is a detailed scheme that is updated regularly and is user-friendly. IPRS has worked actively on its tariffs. There is a flat rate for new and old music. The tariff structure is constructed keeping in mind all kinds of establishments. The fees vary for malls, restaurants, nightclubs, etc. as per their size and music consumption. A nightclub, where music is of utmost importance, will attract a higher tariff than a shop.
Last year, IPRS released a tariff structure for online live performances which was met with some objections. IPRS redrew the plan, after consultations with its members and general body and came up with a very feasible tariff structure. For users who still couldn’t afford the fees, it was made free while there was a flat rate for others. IPRS has been much focussed on the affordability of their fees.
What are the cons of not obtaining a music license?
These are legal dues. The Parliament of India has recognised Copyright as a Property Right. Just like when someone signs an agreement, stamp duty is levied or like income tax which has to be paid so is the case with music licenses. There is a fair balancing act that comes with the Copyright Act. Venues which don’t use music for commercial use, like hostels or amateur clubs, are exempt from it. The law also allows a copyright owner to charge a reasonable amount where the content is used for commercial purposes and it has to be paid.
If an establishment doesn’t procure a music license, then potentially a civil injunction and damages claim can be levied against it. There can be an injunction preventing it from playing music apart from the reputational damages that come with it. Copyright offenses are non-bailable and are criminal offenses.
The Parliament of India felt that copyrights have to be protected and to do so it has to be a criminal offense as it also causes a loss to the national exchequer as the GST is not collected and societies like IPRS cannot pay taxes.
The establishments have to take music licenses as seriously as the municipal, food, income tax, and other licenses. Unfortunately, there isn’t much seriousness about it yet unlike the European and American countries. If anyone is not happy with the license fee, they can approach the courts against it. IPRS is more than accommodating in such matters so there is always a remedy.
Otherwise, it has to be paid else it is unethical as well as criminal.
The international music industry has immensely benefited through licensing. Won’t the Indian industry benefit too?
The majority of the Indian population feel that the music industry means a company and the license fees will benefit the company. What they don’t realise is that there are thousands of artists, big and small, that earn through it. In my view, IPRS exists to serve the smaller artists who don’t have a big repertoire. The royalty they receive becomes a kind of pension and a crucial source of sustenance for them. IPRS regularly helps artists who need medical help, during the lockdown they released nearly Rs. 6 crores as Covid aid when businesses of these artists were at a standstill.
IPRS is literally a pension-giving body for these artists. So if the users don’t acquire a license and pay for the music, apart from the loss to the national exchequer, tax evasion, etc, the creators of the music we love are at a greater loss. It will be hypocritical to call oneself a fan of a certain music creator and pay for their music which will help them or their legal heirs.
It is only fair that the artists are compensated and that is what IPRS is there to ensure.
IIs there a lack of education that is playing the spoilsport?
To some extent, the large technology platforms are unwittingly responsible for this mindset through free or advertisement-driven downloads and subscription models. It may sound like a lecture that music education must begin from childhood but why not? Parents teach their children what is right or wrong like the difference between robbing and borrowing. In the same way, the children should be taught what is copyright, who artists are, what is creativity in school. Education will play a very big role.
For people on whom education is lost and engage in violation of copyright, the laws have to be made more stringent. India is a developing country, we have other important priorities, so Intellectual Property (IP) is often seen as luxury litigation or a rich man’s game. Ironically it is meant to provide relief to struggling, old, and retired artists.
How can the societies educate the individual users and the businesses? Will campaigns like IPRS’ ‘License Liya Kya’ help in achieving this in the longer term?
The first struggle is awareness, the second is conversion and the last one is managing the converted fairly and ensuring they don’t leave. There are stages to every effort and campaign. IPRS’ ‘License Liya Kya’ is of enormous importance as it is the first time such an awareness campaign has been undertaken. The title itself sparks a conversation and prompts a recall about license and music. After this awareness campaign, it is important to convert those who now know about the licenses. There will have to be more innovative efforts like recalibrating the license models, creating tailor-made licenses for small businesses, and getting them to acquire licenses.
To be honest, it’s a long haul but it is a wonderful way to start as awareness is the first part of the battle. IPRS is on the right track. Other PROs should learn a few things from IPRS like being humane, treating people with respect, and remembering that it’s a campaign, not a battle. The clients and customers are potential adversaries so transactions and management have to be transparent.
IIPRS has done a tremendous job, every PRO is also making an effort to raise awareness and ensure royalty is distributed fairly.
All That’s Legal – AskAmeet
#AskAmeet – Music Licensing Matters
