This is going to have interesting implications for Community Radio. In May 2008, the Supreme Court had ordered the hitherto somnolent *Copyright Board *to take a decision regarding music royalty for FM radio. Since India's copyright policy was apparently framed by Dick Turpin, the music industry holds our radio channels to ransom, skimming off a reported 18% of their revenues as music royalty. This is worse than it sounds because -- thanks to a flat rate for all FM channels -- the smaller stations, in 'C' and 'D' category towns, are probably handing over half their profits to the music industry. (Internationally, music royalty for commercial radio is typically about 2% of net revenue).
PPL & IPRS were also squeezing community radio for up to Rs.200,000 a year -- on a deal brokered by some mysterious, well, broker -- for the privilege of playing Bollywood Top 20 two hours a day. I've asked the I&B Ministry if the Copyright Board's ruling applies to CR as well (as it should) and assured them that we'd be happy to pay 2% of our net revenue, such as it is, as music royalty. (Since we'd have to earn Rs.1 crore per year to pay Rs.2 lakhs as royalty, as we do today, 2% revenue share would be a considerable improvement. Actually, going by international practice, we have a strong case for making music on CR royalty-free). Now, what are the implications for CR? Would CR stations -- especially the urban ones -- be thrilled at the prospect of playing Himesh Reshammiya from dawn till dusk, for this affordable fee? Would the 2% revenue-share tempt many dodgy 'NGOs' and 'educational institutions' to use CR as a backdoor entry into commercial radio? Could we have a cap on the percentage of commercial music that CR stations play every day? Before we place an order for more CD racks, let's assume that -- even as I write this -- the bully boys of PPL / IPRS and that embodiment of copyright virtue, T-Series, are busy filing an appeal against the Copyright Board recommendations in the nearest High Court. Sajan --------- *Copyright Board goes for revenue share solution on radio-music industry royalty issue* 26 Aug 2010, Radioandmusic.com MUMBAI: They have been sparring for a couple of years, waiting for the referee to reach a decision. Today, the Copyright Board reportedly announced that it had recommended that the royalty payable by FM radio stations to the Indian Music industry would be a share of 2 per cent of net advertising revenues, a departure from the current practice. Currently, the arrangement is that FM radio stations pay music labels on a per hourly basis for music played out on air. This is fixed at Rs 850 per hour irrespective of the geographical region. Of this, Rs 660 per needle hour is collected by the Phonographic Performance Ltd (PPL). The government had fixed the tariff in 2001 with no rate revision since then. The FM radio broadcasters coughed out Rs 1.2 billion, or 18 per cent of their net ad revenues, as music royalty in FY'10, according to industry estimates. A two per cent share, as the Copyright Board has directed now, would mean the music companies would have taken away just Rs 140 million in FY'10. Earlier this year, the Supreme Court had given the Copyright Board four months to resolve the music royalty spat. It had asked both the radio and the music fraternity to file evidences supporting their stand on the royalty issue. Experts from the industry believe that the order is skewed in favour of radio and the FM industry is not complaining. Says a radio industry insider, "The move will definitely be welcomed by the radio industry. It is an encouragement and will push it to the next level. especially since phase III is on the anvil." Big FM business head Soumen Ghosh Choudhury said, "We haven’t received any official communiqué on this from the Copyright Board as yet and hence need to understand it clearer. But prima facie it does seem like a very positive move. Music royalties have been an issue for a while now and this is sure to bring US some respite. If the music royalty issue is really sorted out, it will further fuel phase III growth for FM and allow broadcasters to deepen their footprint while offering advertisers greater reach." BAG Films and Media CMD Anurradha Prasad: "The music royalty cost used to be a huge drain. A two per cent revenue share will actually be a big help for radio broadcasters in smaller towns who were burdened with a heavy payout to music companies." Music labels refused to comment on the new settlement since they still hadn't received the order from the Copyright Board. Talking to Radioandmusic.com South music label Inreco's director SL Saha said, "Since we haven't received the order we are not in a situation to comment. But prima facie we are not too happy with the settlement." Keep watching this space for further developments. http://www.radioandmusic.com/content/editorial/news/copyright-board-goes-revenue-share-solution-fm-radio-music-industry-royalty-issue#story
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