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Music firms may challenge copyright law amendments

Firms preparing for legal battle against law on ground that some changes are unconstitutional
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First Published: Thu, Mar 28 2013. 11 02 PM IST
Music companies are unhappy with the idea of having to pay lifelong royalties to artistes. Photo: Pradeep Gaur/Mint
Music companies are unhappy with the idea of having to pay lifelong royalties to artistes. Photo: Pradeep Gaur/Mint
Updated: Fri, Mar 29 2013. 12 25 PM IST
Mumbai: India’s music industry is protesting against the latest amendments to the copyright law that mandates continued royalty payments to lyricists, singers and composers. Top companies that buy music rights of movies as well as produce albums are preparing for a legal battle against the new law on the grounds that some of changes are unconstitutional and allegedly violate existing laws that protect the rights of an intellectual property owner.
The government last week notified the rules for the Copyright (Amendment) Act, 2012, which stipulates lifelong (60 years) payment of royalty to music artistes. The amended law, passed by Parliament in May, also stipulated measures such as compulsory/statutory licensing for broadcasting works of music and sound recordings.
Top music companies, including Super Cassettes Industries Ltd and Venus Records and Tapes Pvt. Ltd, challenged the new amendments in the Supreme Court soon after the Bill was cleared by lawmakers, but the apex court directed them to approach a lower court, according to people familiar with the development.
Mint couldn’t verify this independently.
“One of my clients in the music industry is preparing itself to officially challenge certain sections” of the Act, said a lawyer who represented Super Cassettes in a separate matter related to the copyright law amendments earlier. A senior executive from Super Cassettes said the music company may approach the courts, but declined to elaborate. Both persons didn’t want to be identified as the matter is sensitive.
The Indian media and entertainment (M&E) industry is estimated to grow 11.8% this year to Rs.91,700 crore, according to the latest report on the sector by the Federation of Indian Chambers of Commerce and Industry (Ficci) lobby group and consultancy KPMG. The report predicted that the music industry would grow to Rs.1,160 crore from Rs.1,060 crore last year. Under the new law, 25% of the revenue is to be paid as royalty (12.5% to the lyricist and 12.5% to the composer) on any new music contracts. No estimates are as yet available on royalty payments that music companies stand to incur.
The amendments to the copyright law had been considered fair as they entitled artistes such as song writers and performers to claim royalties for their work. The Bill was also passed by the Lok Sabha unanimously, with members from all parties supporting the changes, which would benefit artistes by entitling them to a share of the future revenue earned by the right holders (music companies in this context).
“The new changes are completely justified as it will help many poor and many not very well established lyricists and composers to get a share of the income that their work generates,” said lyricist Javed Akhtar, who is a strong proponent of the 2012 copyright law amendments.
Music companies are unhappy with the idea of having to pay lifelong royalties to artistes.
“It’s like someone claiming a share of your property, which you legally bought from a builder by paying a price that is full and complete,” said Savio D’Souza, secretary general of the Indian Music Industry lobby group.
The statutory provision for lifelong royalty payments to artistes has a flip side, said copyright lawyer Amit Sibal.
“The music producers by practice have been paying lump-sum payment to artistes in most of the case; these artistes need or prefer such payments. But since there is (a) law that mandates continued royalty payment, this is not possible,” said Sibal.
Producers may hesitate to make lump-sum payments and music companies looking to buy the rights to a particular piece of work will try and negotiate harder for a lower price, he said.
“Even if the artiste needs a lump-sum money for his needs, he cannot receive such payment at once with this law in place. At the same time, there is always an uncertainty about the (future) success of the songs or such creation and thus the royalty is also not certain,” he said.
Compulsory and statutory licensing provisions against abuse of copyright have been in the law for the last 20 years and even the international copyright conventions that India has signed endorse these norms, said registrar of copyrights G.R. Raghavender.
Music companies haven’t objected to these norms because they managed to bypass them in the past, Raghavender said, adding that the amended law had made the exploitation of artistes difficult and that’s the reason why it has generated so much opposition, he added.
Malayalam movie lyricist Kaithapram Damodaran Namboothiri, who was unaware of the new amendments, said songwriters for Malayalam movies were poorly paid.
“We get only a single payment of a few thousands (mostly around Rs.10,000 to Rs.15,000) for a song, though it generates huge revenue for the producer as well as the rights-buyers in future,” said Kaithapram, who expects the amended law to benefit music artistes.
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First Published: Thu, Mar 28 2013. 11 02 PM IST