The fortunes of Indian copyright societies

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A few years ago in 2018, I had written about the financial state of Indian copyright societies dealing with music. At the time, things were not looking well for the two main copyright societies in the music industry, which are the Indian Performing Rights Societies (IPRS) and the Phonographic Performance Ltd. (PPL). While IPRS collects royalties for use of music and lyrics, PPL collects royalties for use of the sound recordings. The revenues for both copyright societies at the time were decidedly unimpressive when contrasted to figures from 2009-10.

The slow growth and at times even declining, revenues of these copyright societies in 2018 were not entirely surprising given the controversies, bad blood and litigation between the music labels and the composers/lyricists. Post the 2012 amendments, it was presumed that things would necessarily have to change for two reasons. The first reason was that the 2012 amendments allowed composers and lyricists to assign their right to collect royalties to only copyright societies and no other body. Thus copyright societies would necessarily have to get their act together. The second reason was that demand for music from big streaming services was increasing tremendously because of better internet penetration and cheaper smartphones. As of 2018 this turnaround had not taken place.

Things however have really turned around for IPRS in FY 2018-19. Its annual report for FY 2018-2019 which is available on its website shows an eye popping increase in revenues across categories! Its total revenues increased from Rs. 45 crores in FY 2017-18 to Rs. 166 crores in FY 2018-19! (The figures can be accessed on page 43 of this document.) The increase may be due to the accounting method followed by IPRS for some of its revenue heads wherein revenue is calculated on an accrual basis i.e. on the basis of signed licenses rather than receipt of money and it appears that at least a sum of Rs. 51 crores is yet to be paid to IPRS.

The other reason for the increase in revenues is because IPRS has managed to build entirely new heads of revenue that did not exist in the previous year. These two heads include the licensee fees from affiliated societies in other countries and foreign streaming services. Together these two heads amount to Rs. 62 crores as opposed to Rs. 45 lakhs in the previous year. Other massive increases in revenue are Rs. 29.36 crores from television broadcasters as opposed to a mere Rs. 1.4 lakhs from the previous year. Getting politically powerful TV broadcasters to pay up is not easy. This lobby ensured that the statutory licensing norms of Section 31D, which were initially meant for radio broadcasters was also extended to television broadcasters. As per Section 31D the television broadcasters can challenge the royalties demanded by copyright societies before the Copyright Board, except this Board has not been constituted since 2012. In the absence of a statutory licence, I am presuming that IPRS managed to convince the television broadcasters to pay up the amount.

One aspect of IPRS’s annual report which is rather strange is its royalty payout to its members. As per its balance sheet only Rs. 52.38 crores was paid out to its members while a sum of Rs. 60.49 crores sits as cash in its bank account! It is surprising that so much money is sitting its account without being disbursed to members. Unless that money has something to do with outstanding liability such as refunds being demanded by television broadcasters and tax demands, that money should go to members.

The figures for PPL are not impressive. Its revenues stand at a mere Rs. 100 crores with Rs 23.59 crores coming from radio broadcasters and Rs. 64 crores coming from public performances licences issued for live events. PPL does not appear to be collecting revenues from television broadcasters or streaming services or foreign copyright societies. This is a huge drop for PPL. Its revenues as far back as 2009-10 were Rs. 203 crores. The decline in revenues is not very surprising since PPL has not been recognized as a copyright society and some of the largest music labels prefer to operate outside the purview of PPL given the controversies raging around it. This begs the question of whether the music labels even require a copyright society for activities apart from performances licences for live events?

Last but not the least I would like to make a passing reference to the Indian Singer’s Rights Association (ISRA) which is a registered performers’ society that is meant to represent the rights of singers. The claims being made by ISRA are very controversial and are being contested before court. We have covered some of these issues before over here. ISRA’s revenues for FY 2018-19 was at a mere Rs. 2.56 crores of which a sum of Rs. 42 lakhs went towards the salary of its CEO Sanjay Tandon. The collective distribution to ISRA’s 755 singers-members for the same period was at a mere Rs. 1.08 crores.

ISRA’s annual report contains many paeans to Tandon. Sample these excerpts: “The entire Board once again places great appreciation and “lagan” of Mr. Tandon so as to have such a landmark day in the life of ISRA.” – “The Board on behalf of all the members of ISRA thanks Mr. Tandon for all his initiatives and hard work with passion” – “The Board would like to place on record its applause and immense appreciation to Mr. Sanjay Tandon for his hard work and passion and thanks him to have delivered such a fantastic result.” – “Last but not least, the Board wishes to acknowledge and appreciate the immense efforts of the CEO – Mr. Sanjay Tandon, without whose passion, perseverance and hard work, ISRA would not be where it is today.”

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