FM firms settle royalty dispute with Phonographic Performance Ltd

The dispute between the private FM radio operators and the Phonographic Performance Ltd (PPL), a body of Indian music companies, over the payment of royalties in respect of music broadcast over the radio stations seems to have been finally decided with the Copyright Board deciding on the amounts payable by the FM radio stations. The board has accordingly directed the registrar of copyrights to issue licenses to them.

The Copyright Board has decided that the standard rate of Rs 1,200 per needle hour shall be applicable to prime time broadcast of two hours in the morning between 8 a.m. to 10 a.m., and two hours in the evening from 6 pm to 8 pm.

The rate for 8 lean hours (night hours) between 10 pm and 6 am. would be 25 per cent of the standard rate which works out to Rs 300 a hour, while the rate applicable to the remaining 12 normal hours which do not fall into the prime time or night hours category would be 60 per cent of the standard rate which is Rs 720 a hour.

However the board has not fixed differential rates for different cities despite different population figures since in the more populous cities had a larger number of FM stations.

Accordingly, the board felt that the FM stations in all cities were more or less on the same footing as regards the size of the audience.

The Copyright Board was directed by the High Court to determine royalty rates in an expeditious manner after FM radio stations in different cities sought legal recourse on what should be the reasonable compensation payable to PPL which is a collecting society and which issues licenses in respect of sound tracks.

PPL had demanded a royalty rate of Rs 1500 per needle hour as a minimum guarantee and had also expected a revenue sharing arrangement with the broadcasters.

However, the board after considering both the sides and based on the available data decided to fix the rates since “ in the circumstances the only course open is to make what is called the income-tax law as the best judgement assessment. This has necessarily to be a value judgement and to that extent slightly arbitrary.”

However these rates would be applicable and remain in operation only till October 31st, 2004. The board will between September 1, 2004 and October 31, 2004 hear the parties again and fix a reasonable compensation for a period much longer than two years on the basis of data to be provided by the parties in the intervening period.