• Wed. Jun 7th, 2023

Agreement on Royalty Sharing signed between ISRA and Music Labels!


May 11, 2023

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[This post has been authored by SpicyIP Intern Surmayi Khatana. Surmayi is a second year student pursuing LL.B from Government Law College, Mumbai.]

On April 25, 2023, it was reported that the Indian Music Industry (IMI) and the Indian Singers Rights Association (ISRA)  have entered into an agreement whereby the member singers of the ISRA, have been promised royalties for their works. Apparently, negotiations for the agreement have been on for a while and the agreement was signed in October 2022, but it was announced in April 2023. ”The actual details of the agreement, that has the potential to determine how much the singers of our favourite songs would be getting paid, are not out in public yet. 

Interestingly, some reports state that the agreement with IMI  “covers all record labels, singers and musicians on a pan-India basis”, and even in the press conference a broad claim that the agreement will include all the music labels, was made.  However, it is pertinent to note that the reporting on this might not be accurate. IMI is not a collecting body but rather an industry body, (also noted by Achille Forler in a comment here), and cannot collect money on behalf of the labels. In fact, IMI’s sister concern PPL is the body responsible for collecting the royalties. The details, as explained by Mr. Piyush Goyal, during the press conference (more on this below) also clarifies that ISRA’s share of royalties will be from the amount collected by PPL.  

Regardless, while this surely sounds like a good deal for the singers, whose royalty rights have long been ignored, it is yet to be seen how this agreement will pan out; will it help singers receive their appropriate royalties? or is the agreement just a siren song? In this post I will look at this agreement in the light of the confusion on performers’ rights on sound recordings, the foreseeable issues that may arise, and what benefits might come for the singers.

The Agreement

ISRA represents the interests of over 750 singers whereas, PPL is a  rights collective that issues licenses and collects royalties from commercial establishments, radio broadcasters on behalf of  their members which include music labels like Universal Music, T-Series, and Sony Music Entertainment among more than 400 others. As said above, while the exact terms of the agreement are unknown, at an event held by ISRA and IMI, Mr Piyush Goyal, the Commerce and Industries Minister, highlighted that  a guaranteed Rs. 50 crore will be given to ISRA for the first year (which has already been paid to the ISRA),  with a 5% increment every year for the next 4 years. After which ISRA will either get 25% or a sum of Rs. 60 crore, whichever is higher. He also highlighted that the amount that will be shared with ISRA will be collected by PPL.

As per the event, apparently Minister Goyal played a significant role in the fruition of the agreement. In his own speech, he highlighted that originally a fixed amount of INR 50 crores as against a percentage model suggested by Minister Goyal, was proposed. This raises some interesting questions regarding the government’s role in the current agreement, since Minister Goyal also stated that the government was not involved in the negotiations on the actual figures.. 

Are singers entitled to royalties for sound recordings?

The Copyright Amendment Act, 2012 does not expressly include singers in Sections 18 and 19 which safeguards the royalties of authors and composers in communication of their works to the public. Instead, the application of these provisions with respect to the rights of a singer was segued via Section 39A

The problem, however, lies in the determining the subject matter on which these royalties are to be paid to these performers.  The economic rights of performers (including singers), were  included via the 2012 amendment under Section 38A. This provision comes with a gamut of interpretational errors when read with other provisions of the Act and the Copyright Rules. The proviso to Section 38A states that a “performer shall be entitled for royalties in case of making of the performances for commercial use.” Which read with the meaning of  “for commercial use” under Rule 68 would mean that a singer is entitled to royalties for the performances recorded in the studio as well. And thus, the reproduction of these recorded performances should entitle the performers to the right to receive royalties. However, this is in clear contrast with the meaning of the term “performance” u/s 2(q)  which is restricted to live performances only. This issue has previously been discussed on the blog in a ghost post here

Looking at the recommendations of the Parliamentary Committee Report on the Copyright Amendment Bill, for this issue does not make things clear either. The report considered the issues raised by the Association of the Radio Operators of India which stated that “performance’ as including communication by any means to public of any sound recordings virtually over-rules the current judicial deliberations on whether free broadcast through radio constitutes performance. Playing of recorded songs cannot be construed as performance and this matter is currently under review of courts.” On the basis of this submission, the Committee opined that the contention of the Association should be looked at in light of the court rulings.

Speaking of court rulings, the Delhi High Court in Neha Bhasin v Anand Raj Anand in 2006 had stated that ‘every performance has to be live in the first instance whether it is before an audience or in a studio.’ However, this interpretation was only “prima facie” and was later regarded as a “serious triable issue” by the Delhi High Court in ISRA v. Dharma Productions (pdf). 

In stark contrast to the  interpretation by the court in the Neha Bhasin order, the Patiala House Court’s 2018 order in Sushila v M/s Hungama Digital Media Entertainment Pvt Ltd (pdf) put forth a limited interpretation of the word ‘live’ to mean a live performance excluding studio recordings. The judgement also excludes ‘singers’ from ‘authors’ and their rights as per Sections 18 and 19 and relied on IPRS Ltd. v Aditya Pandey (2012) for its understanding. Thus, as per this interpretation, the rights of the authors under Sections 18 and 19 are distinct from the rights of performers as given in Sections 38, 38A and 39. While similar issues were being addressed by the Delhi High Court in a bunch of cases filed by ISRA, and even an interim injunction was granted against the use of ISRA’s repertoire (live or recorded) in 2016 (pdf), the matter was ultimately settled “out of the court” (pdf) (co-incidentally in October, 2022 which is the same month when the present agreement was signed by the parties. Did this agreement/litigation have any role to play in the above negotiations? Again, without the terms of the agreement nothing can be said with certainty.)

The recent judgement by the Bombay High Court states that original authors are entitled to royalties for their work that is communicated to the public via radio broadcast.  However, it does not throw light on a performer’s right to royalties after a recorded song is communicated to the public on the radio. 

What does the agreement really mean?

From the above discussion, it can be seen that singers, likes of whom ISRA represents, may have trouble getting royalties as a part of the performer’s right over studio recordings as it is not considered ‘live’. At the same time, PPL’s collections are based on licensing of the very same sound recordings for public events and broadcasting. The benefit that this agreement then brings is that it does in a way allow singers to access revenue that they were previously excluded from. 

Limited scope

It is pertinent to note that the PPL collects revenue on behalf of the labels they represent, from radio broadcasters and licences issued to commercial establishments like hotels, bars, restaurants, pubs etc. However, this agreement cannot include royalties for streaming services as evident from the PPL’s tariff plan that does not talk about streaming specifically. Also, looking at PPL’s explanation of its activities it “collects royalty by issuing license to commercial establishments /premises/venues like hotels, discotheques, clubs, lounges, bars, pubs, shops, stores, malls, salons, hospitals, offices, amusement parks, buses, taxis, aircrafts, events, shows etc. for on ground public performance i.e. communication of sound recordings/music of our members to the public….also issue Radio Broadcast license for usage of members’ repertoire to Broadcasters on their Terrestrial radio stations, Community radio stations and National public radio stations.”  which has been a money making machine for the music industry. As per IMI’s data the revenue generated from streaming in 2021, was INR 1408 Cr. (86.9%). 

Therefore the singers, who have worked with the labels, continue to not receive royalties for streaming and this agreement will not be able to help them with that.    

Lack of clarity on the distribution of royalties

Another issue that crops up is that any singer that would wish to be entitled to this royalty would have to be a member of ISRA, to ensure that they receive this royalty and also that their former recordings are covered by the same. 

It is unknown how they will calculate the inclusion of songs previously recorded and released or royalty payments to family members of a deceased singer, as Anup Jalota, the Chairman of the Indian Singers Rights Association mentioned in their event. He also stated that an unspecified percentage of these royalties will go to the musicians’ association. This leaves us to further question how these royalties will be split and calculated among so many participants. 

Thus, while the news of the agreement may at first seem like a perfect tune to dance to, whether it’s actually a chartbuster or not will depend on the day when the terms of the agreement are actually out in the light. 

[The author would like to thank Praharsh, Swaraj and an anonymous reader for their comments and input.]

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