IMG_4258-rev 1

The Royalty Treatment and Music

Royalties – mere mention of the word has the potential to cause joy, cold sweats or disenchantment among even the most stoic of artists. Whatever your situation, chances are that discussions of royalty payments and how they work have left you overwhelmed and confused at some point, and rightly so since the legalities and business of royalties are often shrouded in suspicion.

Confusing as it might seem, royalty payments lie at the base of a complicated industry engaging musicians, filmmakers, producers and distributors alike. If you’re a filmmaker, musician or producer then here are a few simple things to remember about royalty payments and how they work in India.

Who gets royalties?

Royalties go to the copyright holder. As the copyright owner of a piece of music, you retain a collection of rights that allows you to control the reproduction, incorporation, usage and performance of that musical work. This means that no one else is legally permitted to make use of your music without having taken your prior permission. When considering how to permit others to use your work, you have two arrangements to opt for – (a) transfer and (b) licensing.

Transferring or assigning your rights typically means that you are selling your rights in the work you have created. Licensing is similar to renting or leasing your right for a period of time and for a mutually agreed upon price. Whether or not you get royalty payments depends on which model you’ve chosen.

The copyright holder gets the money

The problem that many artists face – musicians and filmmakers alike, is figuring out who owns the copyright and subsequently, whom the money is going to. Not only is it important to distinguish between transferring rights and licensing them, it is equally important for musicians to understand when they are working for hire and when they are not. When working for hire, a content creator implicitly agrees that she might be contributing to the creation of the work, but is neither an author nor a copyright holder over the work. For instance, if you are a session musician hired by the producer to record a song, you are in essence working for hire – unless you have a contractual arrangement that says otherwise. Identifying the distinction can spell the difference between being paid a lump sum or receiving increasingly large, continuous payments for the musical work you co-created, especially if the musical work becomes a real hit and far surpasses your expectations of it becoming popular.Artistik License Logo - small

Misunderstanding the nature of the work relationship can lead to subsequent copyright confusion and the loss of royalties.

This was at the core of the problems being faced by composers in the Bollywood music industry where composers were unaware of the nitty-gritties associated with their professional engagements by movie producers. Prior to the 2012 Copyright (Amendment) Act, composers were not paid royalties because they were not considered copyright holders of the music they made – the rights were contractually assigned to the film’s producer – a practice that many considered an industry standard and were thus, reluctant to overturn. However, a protest led by some prominent members of the Indian music industry, led to a series of amendments to the existing Copyright Statute in India; some of which addressed issues related to authorship, copyright ownership and royalties of musical works made or used in films.

Having said that, there’s not infallible statutory language that says that the composer has a right to royalties.

A lot has been said about the 2012 Copyright Amendments having put in place a right for composers and musicians to receive royalties, however a closer look at the statute leaves a lot to doubt. After an initial reading of Section 19(9) and (10) along with the proviso to Section 18 of the Copyright (Amendment) Act, 2012, it might seem that a legal right to secure royalties has been granted, considering the fact that the law says that the author of a literary or musical work used in a cinematographic work or sound-recording, cannot assign or waive the right to receive royalties. However, re-reading this might prompt one to understand that this legal provision merely states that the author cannot negotiate away the right to receive royalties – a situation that might arise only if there is a legitimate situation of the author i.e the composer or musician actually having been eligible to receive royalties in the first place. In other words, the law does not actually modify or clarify the circumstance under which authors of musical works may receive royalties, but instead highlights the fact that there can be no contract that describes negotiating the royalty rate away.

So the best bet to ensure your expectation of royalties is by asking for them.

Statutorily guaranteed or not, it’s always wise to ensure that the contract you are about to sign contains a clause that explicitly deals with royalty payments. As is the case with nearly all aspects of intellectual property rights, this clause is open to negotiation – although such negotiation may have to occur within the tariff limits prescribed by various organisations and copyright societies. Considering the fact that there is a lot of mistrust surrounding collection societies, there’s really no proof of whether the royalties you receive have been accurately calculated. Furthermore, the right to receive royalties for an underlying melody or composition is different from the right to receive royalties from the performance of the musical work – this might be the biggest change that the 2012 Amendments have brought into effect namely the possibility of earning royalties from the exploitation of musical works at public performances that might include them.

In conclusion, it is important to remember to be explicit whenever discussing royalties whether that applies to including it as a clause in your contracts or discussing it with your colleagues, producer or licensee.

Photo credit: Ashish Varughese Abraham

Manojna Yeluri

Manojna Yeluri

Manojna Yeluri is an independent legal consultant advising artists and startups on issues related to IPR and entertainment law. She also founded and runs Artistik License – a legal education initiative for artists working in India that’s meant to empower artists through simplified legal knowledge. When she's not talking to artists, you can find her drinking tea and trying her hand at all kinds of DIY craft projects. You can read more about her work with Artistik License at artistiklicense.wordpress.com

More Posts - Website

Leave a Reply

IndiBites

April 18, 2015

Music festivals, gigs, art exhibitions, EP releases, plays, film fests, poetry readings. IndiEarth’s…

managing the musician

February 12, 2015

Q: What do Danny Goldberg, Vicky Hamilton and Peter Mensch have in common?…