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In response to my last post, I received a dismissive comment from Achille Forler, an insider from the music industry, who like most other folks from the music industry consider any commentary from outsiders as ‘pointless’. In any case, we on the blog seem to be much more receptive of criticism and I’ve taken the time out to rebut each one of the points raised by Forler.
Forler’s comments are in red below, with mine in black:
Dear Prashant, this post is pointless on several counts.
First, the existing Act makes room for only one Society per class of works, so there is no latitude to create competing Societies.
Wrong! The proviso to Section 33(3) allows for the registration of more than one Copyright Society per class of works. The proviso, which has not been deleted in the last round of amendment, is reproduced as follows: “Provided that the Central Government shall not ordinarily register more than one copyright society to do business in respect of the same class of works.” The wording of the proviso clearly allows for the Central Government to register more than one copyright society in respect of the same class of works provided that there is a special reason for the same. If companies like T-Series or the members of the South Indian Music Companies Association (SIMCA) can demonstrate such reasons they should be allowed to start their own copyright societies. In my opinion these companies should not be forced to get into bed with either IPRS or PPL until the Government is able to assuage their fears of mismanagement in these copyright societies. Why is the Government giving the inquiries into IPRS a quiet burial? If there is nothing to hide, let the Registrar of Copyrights make public the results of his inquiries into complaints raised by Akthar and Co. If the Government is not ready to do, it has no business to force companies like T-Series or SIMCA to join tainted copyright societies.
Second, it is not the Societies but the Copyright Board that will determine the rates; so there is no benefit in setting up competing Societies.
The Copyright Board is going to determine royalties only if content users are not satisfied with the rates demanded by Copyright Societies. Of course, if PPL is going to ask for a looney 20% royalty rate, the matter will surely end up before the Copyright Board. Even presuming that 99% of all matters end up before the Copyright Board, the composition of the copyright society will have a significant bearing on the royalty rate fixed by the Copyright Board. For instance if the member companies of SIMCA form their own copyright society, they can argue to be treated differently from the Bollywood music labels on the grounds that the economics of music and broadcasting in South India are significantly different from the north and west of India. Since the market for South Indian and Bollywood market is so distinct, companies like SIMCA can easily make a case out for royalty rates which are different from the rates imposed on Bollywood. Given the much smaller market in South India, I would argue that the royalty rates for these companies should be higher than for Bollywood music labels which operate in the context of a much larger market where they can benefit from economies of scale.
Third, from a consumer perspective, less Societies is far better than more Societies: ask iTunes, Google, or Indian broadcasters who clamour for a single-window clearance as they feel reporting statements to IPRS and PPL is proving too much! The same picture emerges if you look at the rise of pan-European licensing: who pushed for it if not the consumers?
iTunes, Google or Indian broadcasters are not consumers of music – people like me are consumers of music and there has never been an instance in the history of economics of mankind where a big cartel of music companies working together has resulted in good news for the consumer. In America ASCAP was put through brutal anti-trust decrees by the U.S. Govt. When BMI was formed by broadcasters as a counter-weight to ASCAP, it too was put under a brutal anti-trust decree by the Department of Justice.
There is no reason for having a single super copyright society in India. For Bollywood, let there be one copyright society consisting of the old guard of IPRS & PPL. Let there also be another copyright society consisting of T-Series, Yash Raj Music etc to act as a counter-weight.
If content users like the broadcaster lobby don’t like it – tough luck, they already have a pretty sweet deal under the new amendments. A few reporting requirements aren’t going to sour the deal. My guess, and I’m guessing also the reason for Forler’s opposition, is that the resulting competition between these two different copyright societies will drive down rates to the satisfaction of content-users and most broadcasters will be content enough playing the music of only one copyright societies.
And oh yes, before I forget – India is no Europe! We do business the Indian way.
Fourth, the advent of streaming services like Spotify and Deezer, and new tools like TuneSat, we have seen a dramatic increase in both the accuracy of the data and in micro payments. The exploding volume of data to process royalties is saturating the systems of even the largest Societies like PRS and GEMA or ASCAP; SACEM alone invested euros 71 million (INR 495 crores) over 7 years in its IT systems just to cope with this data revolution on which the accuracy for collecting the author's royalties depends.
I don’t see the point of this point. Obviously if you have mega-copyright societies, you are bound to have mega-bills for IT systems. Have smaller copyright societies and I’m sure Indian jugaad will take care of the rest. Moreover if services like Spotify etc. are able to provide accurate information on usage, it should make life simpler for copyright societies and not more difficult as suggested by you.
Fifth, the more Societies you have for one class of works, say literary and musical works, the more companies a publisher has to set up and operate just to collect what he could have collected with one company had there been only one Society.
From what I understand about the Indian music industry, there is no industry of music publishers, as understood in the Western sense. Even presuming that India does have an industry of music publishers, doesn’t it make sense for these music publishers to hedge their bets across multiple copyright societies? Why put all your eggs in one basket and be at the mercy of one thug? With multiple copyright societies, there is more of an incentive for copyright societies to compete with each other and ensure better services for both their stakeholders and clients.
In the coming years, smaller Societies will continue to do the "dirty job" - licensing small local users such as shops and hotels - but they will have no option but to abandon the essence of their power - royalties processing - to bigger Societies. Of course, they can also remain opaque, where a few cronies pocket most of the revenues, but that is not an alternative that we should consider.
In this point Forler contradicts his first point by acknowledging that multiple Copyright Societies can exist under the law. If there are smaller copyright societies, they will have to function under the aegis of the Copyright Act and its attendant reporting requirements under the new amendments. Being opaque may no longer be an option.
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