Among the myriad issues that the private FM sector in India faces, one that has been simmering for a long time is the case of statutory licenses. The issue per se seemed to have been resolved via a court ruling in 2010. The 2010 amendment to the Copyright Act introduced the concept of a Statutory License (though it would be 2012 before it was actually formulated into a law). Under the Statutory License provision, no music label can deny rights to any user that is willing to pay reasonable rates. If rates cannot be agreed, the Copyright Board (CRB) sets them.
However, the Copyright Board has yet to be formed; hence, radio stations still have to approach the Phonographic Performance Ltd. (PPL) for music licenses. In the absence of any standard rates, the situation in such that every radio station negotiates its own individual deal with music labels leading to a situation that many have called "exploitative" especially for smaller stations that do not have the buying power of the larger radio networks.
As Prashant Panday, MD and CEO of ENIL, which runs Radio Mirchi, explains, the Copyright Board has been merged with the Intellectual Property Appellate Board (IPAB) under the Finance Bill, 2017 that was passed in the Lok Sabha on March 22nd, 2017 but with the constitution of the IPAB still incomplete, its functioning seems to be more on paper than in practice.
“The government ought to have constituted the CRB properly by following Court rulings instead of merging it with IPAB which itself is not functioning and is over-burdened,” he told us.
The problem, as one operator points out, is that many music labels might still not follow the authority of the Copyright Board even if it is constituted as per the directions of the Copyright Act. For example, in 2016, the Department of Industrial Policy and Promotion (DIPP) stated that even internet broadcasting would be considered under the ambit of the Copyright Act. However, since the definition of internet broadcast was left vague, music labels chose to ignore it.
“It (the DIPP decision) has neither value nor legal standing. Internet broadcasters do not fall under GOPA; they cannot be considered broadcasting organisations. Section 31D specifically talks about radio and TV so no one can change it except the court. That is the law,” the head of one prominent music label had told us back then.
The situation seems to be much the same with the Copyright Board, with radio operators we spoke to, stating their belief that labels might just drag the matter to court where it would get stuck once again.
“It is a big issue as the Copyright board order is still not followed by every music company and Copyright Board is not in place. There is no movement on this front. Copyright Board should be established and all music labels should fall under the CPRB statutory licensing process. The issue is getting complicated with more and more music labels asking for separate deals. We need a uniform rate under statutory license scheme,” said Harrish Bhatia, MD of MY FM.
Nisha Narayanan, COO of RED FM, agreed that it was a very big issue for the radio sector, especially for the smaller networks and regional stations. “It is a survival issue for them (smaller networks) because it is a huge cost. Therefore, copyright needs to be far more reasonable. We require clarity between the IPRS and PPL. The issue largely is also that the radio industry needs to stand together,” she said.
The head of one radio station opined that one solution could be if music labels would agree to charge radio stations a fixed percentage of their revenue in any particular city as royalty. However, with music labels also increasing rates across the board, this has not been seen so far.
“We need to look at 1–2 per cent of our revenue, not 11–12 per cent. If for the same song that I am playing in Delhi I have to pay royalty 50 times for 50 cities then it does not make sense. We will end up paying more than television,” agreed Narayanan.