AN ANALYSIS ON ROYALTIES AND CHALLENGES FACED BY THE MUSIC INDUSTRY

AN ANALYSIS ON ROYALTIES AND CHALLENGES FACED BY THE MUSIC INDUSTRY

ABSTRACT

“Music has the power to heal wounds that a medicine cannot touch, it speaks what cannot be expressed and soothes the soul of all human beings”.

A musician puts his heart and soul into his creations. From lyrics to tunes of a song each such creation requires his or her intellectual labour. How do these musicians reap the award of their labour? Are they able to receive a fair compensation for the usage of their work? This paper provides an insight into the not so glamorous world of music and showcases the troubles faced by artists in the industry to get their fair dues. The paper aims to showcase how various royalty legislations though enacted, have failed to be implemented properly in the music industry and hold back the musicians from getting their fair share of income failing the very purpose of such a legislation in the first place. The paper also showcases how piracy of music has become a big issue in the industry and is leading to the downfall of the overall profits earned by the industry. Further, it provides insights into how the original composition of an artist is used by third parties and middlemen without paying royalties to the artists or giving them credit for the same. The paper provides effective solutions as to how the issue of implementation of such royalties in the music industry can be solved.

KEYWORDS

Musicians- Royalties- Implementation– Usage- Piracy

 “Music expresses that which cannot be put into words and that which cannot remain silent”

-Victor Hugo

Introduction

It is difficult to imagine what our lives would look like without music in it. For majority of the human beings it is impossible to imagine a world where all the wonderful songs and musical compositions do not exist. For some people their lives revolve around music. Music is a constant companion that accompanies one throughout their life both through the good and bad times. Therefore, Musicians and composers play a predominant role in our day to day lives as creators of such work of art.

When you look at the music industry from the outside it looks like a world filled with fame, promises and glamour or in other words a perfect blend of harmonies. Upon taking a closer look you realise the difficulties faced by these musicians under the shiny cover of glamour. There are various factors that take up a toll on musicians but the most predominant factor is financial.

Financial security plays a central role in artistic and creative freedom. Not having access to proper finances limits a person’s abilities and growth perspectives as an artist. The same is insured by the way of copyrights and royalties. The paper seeks to mainly answer two questions Firstly, What are the issues faced by the Indian Music Industry with respect to Royalties? Secondly, how can the implementation of royalties be insured in the Indian Music industry?

Every original literary, dramatic, musical and artistic works, cinematograph films and sound recordings are protected by Copyright Act, 1957.[1] A copyright is an exclusive and assignable legal provided to the creator for the creation of any original artistic or literary work.[2]In order to be given protection under the copyright law it must be original, in other words not replicated from any other source, it must be expressed in a reasonably permanent form so that it can be perceived and reproduced, and lastly it must imbibe a significant level of creativity.[3]Composers create their musical creations by way of their ideas and intellectual labour. Therefore, such work is protected under the act. A musical work can consist of a combination of melody and harmony, lyrics or an arrangement of a piece of music. It must involve a sufficient amount f skill and labour.[4] Both songs and recordings can be protected by the copyrights in case of musicians. The essential requirement to protect a song is that it must be either written down, recorded or saved in a tangible form. However, merely playing the song live does not meet this requirement, only if such live performance is recorded can it be protected under the copyright law. Once such an original creation of the artist is fixed in a tangible form it automatically becomes eligible for copyright protection.[5]This arises from the fact that ideas cannot be copyrighted however, their expression can.[6]

A copyright owner is entitled to certain rights as the creator of the work which include the right to reproduce the work, distribute copies of the work, perform the work publicly, make derivative work, display the work and earn Royalties from third parties for the usage of their work.[7]

The musicians and composers receive the compensation for the usage of their work by any third party in the way of royalties.

What are Royalties?

A Royalty is a sum that is in the case of music industry paid to the owner of the copyright for the usage of their work.[8] These are also known as performance royalties. Such royalties are granted by the way of an agreement and they allow others to use the intellectual property of the copyright holder, benefiting the owner by way of the income received for the same through royalties.[9] Royalties also aim to minimise improper usage of such intellectual property.

Music royalties can further be classified into Mechanical Royalty which is provided to the Copyright owner of a song, they receive their fees in the form of Mechanical Royalties for the right to reproduce the song on a recording.; Performance Rights Royalty that a copyright owner of musical work is entitled to when his work is played or performed in public for e.g. nightclubs, television, live concerts etc.; Synchronization License Fees, such a license is required in case a song is accompanied by visual images for e.g. audio visual works in a movie; Print License fees is received by a copyright owner (songwriter) when a sale of sheet music of his songs are made.[10]These royalties are the source of publishing income for the musicians and is a prominent financial factor for them.

Issues faced by the Indian music Industry with respect to Royalties

The music industry has witnessed a huge revolution over the past decade due to the growth of the internet and availability of music over the internet. This has made a huge impact upon the musicians, artists, songwriters, publishers and various music labels. The rise of internet has made the determination of music royalties more complex than ever. This further led to the requirement of a transparent system for determining such royalties.

Lack of Knowledge

In India the sphere of Music Publishing has been a largely unexplored area. For a long time both the music labels and the Artists have turned a blind eye to this expository aspect of the music industry. Since a reasonably long duration, the Indian music Industry has been oblivious to the concept of publishing and royalties due to a lack of knowledge regarding the same. These rights have been signed to the music label by the Artists and film producers in the past. This was due the reason that music labels were the only business entities available. Artists merely wanted their work to be promoted and released as they were not aware of the rights they were entitled to. Seldom do the artists enquire regarding the royalty clauses in their contracts or debate about the rate of royalties provided to them. The problem lies in the fact that artists are eager to get their records released and enter into contracts without properly going through them or asking for legal expertise before signing them. In case of Artists that have not yet made a breakthrough in the industry or a fairly new to it do not risk entering into a negotiation regarding loyalties due to the fear of losing the deal. Not just the upcoming artists, the established artists have also not made any prominent efforts regarding the issue of receipt of royalty upon preconceived assumptions.

Digitalisation of Music Industry

Prior to the digital revolution which changed the way that people accessed music, the music enthusiasts went into stores and used to purchase records and CDs of their favourite singers, artists thereby preventing unauthorised use of such music without paying royalties for the same. The covers of such CDs and cassettes also gave credits to the singer, composer, publisher and the other artists involved in making of such music and the credits of such audio songs were specifically made known to the general public. This ensured that there was no difficulty in identifying the copyright holder and handover their share of royalties to them.

Due to the digitalisation of the music industry, though the content is easily accessible to the masses at virtually minimal or free of cost, it has made the audience turn a blind eye to the contributors of such content. This has become a major issue when it comes to independent artist albums online which are released, made available without making any clear reference to the individual song writers, co-owners, produce, publisher or composer. This makes it extremely difficult for the license seekers to identify the owner of the copyright in order to pay them royalties. The incidents of piracy and illegal usage of the music have also increased due to the same[11]

Copyright Societies

Copyright society is a legal body established to safeguard the rights of a copyright owner.[12]They also regulate the payment of royalties from the license holders to the copyright owners. This is done in order to remove complication and ensure smooth facilitation of the royalty transactions. However, sometimes these Copyright societies act as middlemen and they do not pay the copyright owners the exact amount of royalties that are paid by the license holders. They charge a significant amount from the royalties as fee putting the copyright owners at a disadvantage.

In the case of Radio Today Broadcasting Limited v. Indian Performing Rights Society, 2007 (34) PTC 174 (CAL), the petitioners were license holders for usage of a particular song. However, they refused to pay royalties to the respondent stating that they were the individual owners of the copyright and were not entitled to receive royalties. The court held that the respondents were entitled to receive royalties even though they were individual owners.

Registrar of Copyrights[13]

The Registrar of Copyrights is the one who fixes the amount of royalties that are to be provided by the license holder for a particular intellectual property. The rates that are provided for royalties in India are considerably lower and are not sufficient. This is a factor why the musicians at times do not make an attempt to pursue the royalties for their work.

Conclusion:

The music industry is filled with a lot of challenges. It involves one of the most complicated copyright environments. The Artists are not able to receive their fair dues due to a variety of factors that have been mentioned in this paper. There is a need to establish a framework that overcomes all these problems that are posed in the current scenario. There is a need to spread awareness in the industry regarding the rights of these musicians and remove any uncertainty regarding the same. It is time that the artists are aware of their rights and are able to earn the money that they are legally entitled to. The artists nowadays are more concerned regarding protection of their music and ensuring that it is not stolen. A music publisher may prove to be helpful in this case as he would play an essential role in registering the copyrights with the appropriate societies. Online websites and streaming apps should be regulated and it must be assured that they obtain valid licenses to use the work of a copyright holder so that the artists are able to receive royalties for their work. The copyright societies instead of acting as middle men must act as facilitators between the license holders and copyright owners. The rate of royalties must be fixed at an appropriate amount so that it acts as an incentive for the artists to create more and better music. A central database maybe created that regulates the facilitation of royalties and for obtaining licenses. Such a system can minimise piracy and remove all the middlemen which in turn would maximise the income of the artists.

This will help in providing a financial stability to the artists and would help them create better content and ensure their growth in future.

 

[1] Copyright Act 1957 (Act 14 of 1957), s. 13(1).

[2] Copyright Act 1957 (Act 14 of 1957), s.14

[3] Frith, Simon. “Copyright and the Music Business.” Popular Music, vol. 7, no. 1, 1988, pp. 57–75.

[4] ID.

[5] ID.

[6] ID.

[7] Peter J. Strand, Robert Kouchoukas and William Rattner, “Legal Issues Involved in the Music Industry”, 2005

[8] IRS. Publication 525 Taxable and Non-taxable Income. Royalties, https://www.irs.gov/pub/irs-pdf/p525.pdf.” Page 16. Accessed December. 5, 2019.

[9] U.S. Copyright Office. Services of the Copyright Office. “How do I collect royalties” https://www.copyright.gov/help/faq/faq-services.html#royalties?” Accessed December 29, 2019.

[10] Supra note 7.

[11] COPYRIGHTS, COMPETITION AND DEVELOPMENT: The Case of the Music Industry, No. 145, January 2000 “https://unctad.org/en/docs/dp_145.en.pdf”. Accessed January 09, 2020.

[12] Copyright Act 1957 (Act 14 of 1957), s. 33

[13] Copyright Act 1957 (Act 14 of 1957), s. 9, 10.

Author: Prakriti Jhingran,
School of Law, Christ (deemed to be) University