September 30th will mark the end of a 10-year era where the Copyright Board fixed a royalty rate under Compulsory Licensing for Private Radio Broadcasters payment to music labels whose Radio licensing mandate at that time was with PPL. This rate was fixed net advertising revenues of the private radio broadcaster, for the radio broadcast of sound recordings.
“Music Content is the fuel that drives the radio broadcast industry , a bench mark is TV spends around 20% of its budgets on content creation and the risk lies at the TV networks door step . Unlike in radio broadcast the risk lies with the labels and radio stations cherry picks the hit songs and every green songs , given that this is a risk free model the label revenue pool from radio broadcasters for the recorded music industry should be around Rs. 300 cr per year that will be the “atma nirbhar” moment of our recorded music industry”, said Blaise Fernandes, President, IMI.
Many industry personnels rose to the occasion by expressing themselves.
Vikram Mehra MD Saregama, stated,
“ Free market economics is a win-win situation for all stakeholders . I am optimistic that we will be able to sign a voluntary license with the radio broadcasters. We have a rich and diverse repertoire cutting across the whole country and melody that cuts across all age, fair value is our only ask from the radio broadcasters.”
G. B. Aayeer, MD, PPL said,
“If the royalty rates are not in par with today’s market realities there is every likelihood of these micro and small labels going out of business . This cluster of labels besides being employment generators are the custodians of our music culture. For sustenance the royalty rate should be pegged at 7% of net advertising revenue and the law should ensure that there is no disparity in the market place where some labels who are not covered by the court ruling get a higher royalty rate and those covered under a court ruling are getting a lower rate.”
The rationale of the extremely low rate was that the private radio in the infancy stage. Today the radio industry turnover is pegged at INR 3100 crore, vis-à-vis the recorded music industry’s turnover in India stands at INR 1277 crore.
Members of The Indian Music Industry (IMI), the apex body that represents the trade and economic interests of the recorded music industry have noted with interest the interim progress that has been made based on the public filings of a few major radio broadcasters where the royalties paid by them to the entire music industry for sound recordings averages around 5%-7% of their net advertising revenue in the past 3 years.
This includes the monies paid to the music labels whose radio licensing done by PPL and those labels who were licensing directly.