Brands play it loud but pay it light, leaving music industry in the red
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Industry executives say corporations often fail to pay royalties to music labels and independent artists when using their work in promotional videos circulated on digital platforms.
"India's music industry is bleeding revenue as companies dodge royalty payments to music labels and independent artists for using their popular tracks in branded content on social media" said Shivansh Jindal, CEO of Merchant Records, owned by composer duo Salim-Sulaiman.
"Social media is a vast space. It is not easy to spot copyright infringements across various platforms," said Jindal. He added that to avoid infringements, corporations can avail themselves of music from platforms that provide royalty-free music through subscriptions.
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At present, subscription-based digital platforms such as Hoopr, Epidemic Sound, Artlist, Storyblocks, and Soundstripe offer royalty-free music.
"People believe that music can be used by anybody, and they don't find it inappropriate to use music owned by labels and artists without seeking permission. Even corporations that use such music in their videos on social media without paying don't realise that just like their business, music is the business of labels and artists," said Gaurav Dagaonkar, co-founder and CEO of Hoopr, a leading platform for music licensing.
He added that India's music industry may be losing potentially ₹8,000-₹10,000 crore annually in royalties related to branded videos on social media.
Another major hurdle in detecting copyright infringements is the general assumption that most videos on social media are user-generated and created for non-commercial purposes.
Royalties on music used in user-generated videos are paid by social media platforms to ensure high engagement, but these platforms don't pay royalties for music used in branded content videos by corporations.
"The use of music outside social media is strictly regulated. Following the 2012 amendment to the Copyright Act, 1957, any commercial exploitation of a song (outside theatrical exhibition for an audiovisual work) mandates payment of royalties, equally shared between authors (lyricists, composers) and assignees (music labels or publishers)," explained Anushree Rauta, head of the media and entertainment practice at ANM Global, a leading law firm in the sector.
"However, there is a general perception that much of the content on social media is purely user-generated rather than branded. This misconception often leads brands to overlook the need for obtaining licenses from music rights holders, particularly for influencer-led branded content," added Rauta.
"Sources of revenue for independent artists are few. If corporations do not pay them, it's exploitation. Artists are often unaware that their music is used in branded content," said Aditya Kalia, an independent music business professional.
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