Interview of the Week – Rajat Kakar, CEO, Phonographic Performance, India (PPL)

Phonographic Performance Limited India is a Collective Rights Management Organization affiliated globally to IFPI (International Federation of Phonographic Industries) and represents the vast majority of Indian and Global Record Labels for monetisation of their Public Performance rights and also licenses Radio Broadcasts for its members. It represents over 317 Music Labels and over 800,000 Indian works and more than 1.5 Million International Works, which it licenses to users of these in a professional and transparent manner.

Rajat Kakarthe outgoing CEO of PPL India talks about the journey and milestones during his tenure and the way forward for the organisation in our Interview of the Week.

What were your immediate challenges when you joined PPL India?

I took over the leadership role at PPL India on 1st January 2018 at a very difficult time as the company was going through a realignment with a focus on building a PPL 2.0. The new look PPL would focus on Public Performance as a key contributor to the growth of the Music Industry which meant there was a lot of disruption and the human element had to be dealt with. The object of the exercise was a revamp of the system to ensure transparency and growth in revenue through total professionalism moving forward.

There were a lot of things happening simultaneously in the first year. People, processes, systems, policies, customer interfaces, membership enhancement were all being looked at afresh. Hiring people with the right credentials started right from the top with a brand new management team and then we took this process of talent management all the way till the field personnel. Experience, energy and ethics were kept in a judicious mix so as to be able to deliver a mandate that the Board of PPL had tasked us with. We had to teach them the business.

The work of PPL is very different from traditional ones because here you are not selling a product. The consumer has already used or is using the product and you have to collect money for the same. We ramped up the speed of operations. We let go of almost 160 people and hired 50-60 in their place. Whatever we have achieved today is with less people than earlier but with calibre and conviction.

What kind of efforts were put in to change the image of PPL India?

People thought we were sharks, had no fixed rates, were overcharging, didn’t know whether they should be members or even if we were a legal entity. All sorts of negative things were at play which was impacting revenue. The willing users were also wary of dealing with us. We had to instil confidence in our licensees that they were dealing with a legit agency, which was responsive, transparent in its dealings and clear in what it was issuing licenses for. I think the right information was the key.

We began by educating our staff. They were the face of PPL to the external world and had to be clear about the message we were projecting in reforming PPL. This worked and this learning is continuously being updated so as to keep all abreast with the positive changes that are taking place at PPL.

In this digital age, an agency of our repute could not possibly run a physically intensive process to issue a licence. So we invested in a system which would handle the licencing process online. Within a record time we had a system in place called PLUS which stands for Performance Licence for Usage of Sound Recordings. The entire process is automated and online. One can access licence fee details, make a payment and receive the licence copy via an email within no time at all. This enhanced our reputation with users.

What steps did you take to simplify the tariff structure and licencing process of PPL India?

In the past, users complained about the tariff system being complicated so we undertook a Tariff Simplification Exercise. We had meetings with various industry associations like EEMA, FHRAI (The Federation of Hotel & Restaurant Associations of India) and took their inputs in terms of our tariff, our way of work and our legal standing.

PPL India has not only simplified the structure, it has also reduced tariffs which were a bone of contention. We uploaded the new structure on a revamped website. The new website contained all the information about PPL India and queries could be answered in a lucid manner. This helped create better transparency and a simpler licencing process.

We already had PWC as our auditors but also hired Ernst & Young as Process Auditors so that the best minds in the business could offer recommendations on improvement. We have diligently implemented their suggestions which now reflect in our processes. In fact, we are a paperless office and all transactions are done electronically. This also means that members get their monies on time along with a complete breakup of details of the royalty that has been generated.

How did PPL India manage to increase its membership count while ensuring transparency?

We understood that to truly be the industry representative for sound recording rights our membership should increase. In the past, people were wary about PPL India since it was Mumbai based and perceived it as very Bollywood centric, catering essentially to companies housed here. We undertook an enrollment drive wherein we projected our journey and current scenario. From 250 members we grew to a company with 370 members. We got the South Indian Music Companies Association (SIMCA) on board and other major labels from across the country, resulting in almost 97% of music companies in the industry as our members.

PPL India expanded the number of Directors on the Board and included the regional companies to ensure their viewpoint was also taken into consideration. We appointed Justice (retd) V B Gupta as an independent Director on the Board, which we are not compelled to but did so for the sake of good governance. PPL India introduced electronic voting though it is not mandatory under the law. This was done so that our members from across the country could cast their votes without having to travel to Mumbai to attend the AGM. We revamped all of PPL India’s articles to sync and comply with the Copyright Act and also be a progressive company. This transparency has positively impacted the revenues.

Can you highlight the growth and achievements during your tenure?

During my first year we grew at 40% revenue and in the last year we have grown 20% on top of the previous growth.
This is just the beginning. PPL can do much more in terms of simplifying licensing, expanding our reach and educating people about respecting copyright and music. Our marketing campaign is named Play Music By The Rules.

While making all these changes, we kept the Government informed of the developments periodically so that the Copyright Office, which is our custodian under the law, is well informed. The best testimony to that was when the Deputy Registrar of Copyrights visited us and checked our procedures and opined that we were a gold standard of copyrights entities in India!

These are a few achievements in our journey so far. I think we have a lot more to do in our effort to make sure that people respect copyright, pay for it and that we distribute royalties to members at minimal cost. In fact, our increased revenues have been achieved at lower overhead costs despite our investment in technology and systems.

How is PPL India utilising Block Chain technology?

We have also made a serious investment in a block chain technology company which is going to work across societies in India, Thailand, Singapore and Indonesia. We are building a state of the art system, using block chain technology, to make sure royalty distribution becomes error free. This is an initiative that is happening for the first time in the world. A company called Sound Sys has been set up. PPL India is a partner in it along with IFPI, who are one fifth partners and shall provide data. BMAT Spain will work the entire architecture and hopefully by June/July this year we shall roll it out.

If it succeeds it will redefine royalty distribution process and IFPI will ensure all societies in the world follow the same process. In an endeavour to ensure that this process goes smoothly, we have entered into reciprocal agreements with different societies across the world and are in the process of signing. Ultimately I have to ensure that if my members’ music is played anywhere across the globe, they get paid.

IFPI in all its global meetings is praising us and asking other societies to learn from us. My Finance Director and I are international WIPO level trainers. We are giving lectures on the best practices to run a Collection Management Organisation (CMO).

How can Independent Labels and Artists benefit by associating with PPL India?

We represent anybody who owns a song. If the artist owns it, we will represent him. If the artist sells the rights to a record label, we represent the record label. PPL can represent only someone who owns the rights to the sound recording. If you own the rights to the master, please become a member of PPL. If the record label owns that right, I will pass on the royalty to them and depending on your agreement with them they will pay you.
My message through your publication is,

“Even if you own master rights to one song, there is no harm in registering with PPL as your song remains protected. The registration process is free of cost too. Visit our website, drop your name and contact and we will get back to you. We are using all modes of communications to ensure all your queries are addressed.”

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