Music Licensing in India 101
Written by Achille Forler
Royalties are the salary and the Provident Fund of authors, and the assets they will bequeath to their heirs.
The whole nature of copyright can be summed up by the following equation: creation-communication-remuneration. It is the last part of the equation that poses the biggest challenge to authors.
Copyright is not like a bag of potatoes that diminishes in value every time you make a purée until the bag is empty. The more a work is consumed, the more its value grows. Therefore, the exploitation of copyrights is governed by the regime of licensing agreements, not assignment (sale) agreements. Copyrights owners license certain of their rights under precise conditions – usage, territory, duration, etc. – in return for royalties. Every licensed exploitation of this work will generate royalties for the period of the Authors’ life and 60 years after death.
Recognizing the lack of bargaining power of authors, the 2012 Amendments to the Indian Copyright Act introduced a right to equitable remuneration. It means that authors forced to assign their exclusive rights have lost control over the exploitation of their works but retain a right to be rewarded on an equitable basis (50%) from all exploitations of their works. And for abundant caution, the Act stipulates that the author can only assign this right to equitable remuneration to his heirs or a copyright society.
When you are starting out, you’re doing pretty much everything yourself. There’s nobody to help you. You have to learn how to do all of these things competitively. It’s a good learning experience for seeing what publishers do and don’t do for your colleagues, how they work with them, and how they don’t work with them. For different authors, there are different necessities at different times.
If you’re a lyricist, or a composer who is not a performer and not a good musician, you have to learn everything from scratch. During all this learning curve, the IPRS will be your mainstay; it will guarantee that you will get the money that is owed to you. But when you get to a particular stage, you would need a publisher. And if you have the business acumen, at some point you may want to publish your songs. But you will need some experience to do that.
Let’s start with the first category, the most numerous: those who have assigned their rights. All you have to do is wait for the cheque from IPRS to arrive.
ROYALTIES THROUGH IPRS
If you are an author, IPRS has a statutory (by law) right to collect your share directly from the users (streaming services, broadcasters, public performance, etc.) even if your work is owned by a publisher that is not a member of the society. Through the reciprocal agreements of the society, this right extends to the whole world.
Once you are a member of IPRS and have ensured that your works are correctly registered, the society provides you the benefits of its administrative and legal expertise in licensing, collecting, matching, and distributing royalties gained from the global use of your work.
But you must remember that IPRS is a CMO, it manages rights collectively, not individually.
THE role of the MUSIC PUBLISHER
The music publisher is the only corporate in the entertainment industry to represent the interests of the authors exclusively. He invests in lyricists and composers; musical and literary works are his single source of revenue. The author and his publisher are in the same boat. The publisher is your corporate face, to defend and promote your common interests.
The investments and the networks of the publisher are different from those of a record label. He builds up and cultivates a network of sub-publishers in each territory; he invests in promotional material of his repertoire; he organizes co-writing, translation of lyrics, encourages version recordings, placement in adverts and films. He can do this best because, all over the world, he and his sub-publishers work with local songwriters and local corporates.
For the publisher, record labels are just another client. A publisher will want that your song is recorded a hundred times by hundred different performers on various labels. For a record label, other labels are competitors. If a record label also owns the publishing, it will try to protect its version of the song by preventing different versions from being recorded. We have a severe conflict of interest here!
If a record label also has a publishing department, don’t believe the hype about the supposed “firewall” between the two businesses: the record label’s views will prevail.
If your career goes up, at some point you will need a music publisher that invests in you, exploits every right (see below), promotes your work (globally through a network of sub-publishers), and negotiates the licenses with users. The latter requires experience, networking, bargaining power, and professional legal drafting capacities.
The right to graphically reproduce. This oldest of rights provided once the sole income for publishers and authors; it was then overlooked for many decades because the income from songbooks, music sheets, or T-shirts was insignificant. The recent surge of popularity of lyrics videos, lyrics streaming, and the use of animated lyrics has brought back significant value to this right.
This right belongs exclusively to the CMOs. But you, or your publisher, can inform the society in advance of every public performance that you know of. You must also ensure that the setlist of a concert goes to the society.
IPRS and the CMOs overseas administer the mechanical right through reciprocal agreements.
The sync market is not yet very developed in India, but sync is a great way to raise the profile of a song and have revenues. To place a song for sync, you need to have the right contacts, know their requirements, and submit appropriate music to them. There are no standard fees; the fee is always the result of a negotiated agreement between the client and the owner of the work. Overseas, you can afford to reduce your price for a massive ad campaign because you will recoup the money in the performing right. Because IPRS does not yet collect the performing right for advertisements, you need to get what you can at the negotiating stage itself.
IPRS cannot decide the fee amount; it can only collect the author’s share through the mandate it was given.
When you license a work, it is good practice to include into the license agreement the IPI of the authors and the ISWC of the work, to protect them from any misspellings. And if you own the master, also include its ISRC.
Finally, every sync license must include a “Most Favored Nation (MFN)” clause,” which guarantees that all parties will get the same terms and fees, which is the most favorable. If the client agrees to the record label’s demands of a higher fee and stricter conditions, these will have to be offered to you too, even if you have agreed to a lower price. This is a must-have clause.
COVERS AND REMIXES
A cover is a new version recording of a published work; it must be substantially different from any existing version and falls under the procedures described in Section 7 of the copyright act. For sync purposes, when the cost of the original master is out of bounds for the client, some smart alecs make a sound-alike: a version that stays as close as possible to the original without being a ditto copy. This is a high-risk territory that we don’t recommend, and no great brand will agree to walk down this path.
A Remix is when you use an existing sound recording and edit it differently. It is what DJs often do. Remixes are useful to introduce a song to different target audiences.