Govt clarifies copyright
act applies to digital streaming services
In a decision that will help music
streaming services, the Department of Industrial Policy and Promotion (DIPP)
has clarified that all forms of broadcasting -including digital music streaming
-fall under section 31(D) of the Copyright Act of 2013.
Section
31(D) of the Act offers statutory licensing (SL) to broadcasting services,
allowing them the right to offer music to their consumers at rates determined
by the Copyright Board. This provision was brought into the Act to protect
broadcasters from abusive practices of some music companies, who demanded
unreasonable and unjustifiable royalties before granting permissions. Though
the wording of the clause was quite clear in the Act, music companies had tried
to create an impression that the section didn't apply to digital music
services. With this clarification, DIPP has clarified that section applies to
all broadcasters including digital music services.
Commerce
and industry Minister Nirmala Sitharaman told TOI that the process for setting
up the Copyright Board is on. She did not elaborate on the timeframe. Setting
up of the board has been pending for a few years, but the minister has
initiated the process. Government's clarification will bring major relief to
services such as Gaana and Saavn, and will encourage them to renew commitment
to their struggling businesses. Dhingana, another service, which was acquired
by global giant Pandora, was shut down after being unable to fund music
royalties. Guvera, an Australian music streaming service operating in India, is
also struggling to pay its creditors. In addition, FM radio broadcasters have
been unable to develop presence on digital because of the high costs demanded
by labels.When asked to comment, an ex pert from a global consultancy firm
stated: “Music companies should actually be giving their music at a very low
cost initially to encourage multiple music services, which would help not only
in curbing piracy but also in increasing their revenues from multiple sources
However music companies have been thinking short term and increasing rates
prohibitively making legal music services unviable and leading many of them to
close down“.
In
digital streaming, most music services are losing money significantly . Their
royalty payments have grown by over 500% in the last four years, with built-in
minimum guarantees to the labels. Digital broadcasters' revenues, however, have
grown modestly as the business is taking time to develop. Labels also
restricted how their music was used, initially offering web but not mobile
rights, limiting how consumers could consume content, and restricting what
partnerships digital music services could use.
Commenting
on the clarification, Prashan Agarwal, COO of Gaana, said, “The clarification
that internet companies are covered under SL is welcome. However, there was
never any doubt in our minds that we were covered. This clarification will help
the streaming industry grow and catch up with its peers internationally“.
Industry
body IAMAI also issued a statement: “The clarification will also provide a
relief to the spiraling annual license fee paid to label companies that
sometimes exceeded the revenue of many these startups....this clarification by
DIPP now creates a level-playing field as the provisions of section 31D are not
restricted to radio and television broadcasting organizations only, but cover
internet broadcasting organizations also“.
Commenting
on behalf of radio broadcasters, Prashant Pandya , CEO Radio Mirchi said
“Worldwide, radio broadcasters have moved towards streaming their on-air
products as well as offering niche online products. Here in India, the huge
minimum guarantees demanded by labels have made that impossible. What we forget
is that the biggest losers in all this are the artists, the ones who deserve
all the support and recognition possible“.
Source
| Times of India | 8 September 2016
Regards
Pralhad Jadhav
Senior Manager @ Library
Khaitan & Co
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