In a recent order that was described as “the final nail in the coffin of the music industry”, the Copyright Board said FM radio stations need pay only 2% of their net advertisement earnings as royalty for the music they play.
While this order may be appealed, it is being seen as a major victory for the seven FM radio broadcasters – including Radio Midday, Radio Mirchi, Radio Mantra and Radio One – which have fought a long drawn out battle to reduce the royalties they pay to Phonographic Performance Ltd (PPL). Until now they paid between Rs660 (US$15) and Rs2,400 per needle hour or 20% of the net advertising revenue, whichever is higher. This dispute has so far seen litigation in Mumbai High Court, Delhi High Court and the Supreme Court.
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Justifying its action, the Copyright Board said that FM radio is an infant industry, which is in a bad financial state, and the royalty charged by music companies should be at par with international levels. This order also changes how royalty is calculated, moving it from a rate per hour to a revenue sharing rate.
FM stations, which were first given licences to operate in 1999, are seen by the government as a vehicle of social upliftment and education. However, PPL contended that FM radio broadcasting is a purely commercial and profit-driven venture that serves no public interest.
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The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
