Musicians are not pleased with IPRS’s new tariff scheme. (Image from wikimedia commons)
The Indian Performing Rights Society (IPRS) has been keeping busy during the COVID pandemic. In an undated notice, uploaded earlier in July, it announced a new tariff scheme for ‘live-streaming of online events and live/disc-jockey performances’. After receiving backlash from singers, musicians and popular press, reports have emerged that the tariffs have been put on ‘hold’ until September, 2020. In this post, I will examine some of the issues and concerns this notice has raised.
[Important Edit 29/7: I missed this press release from IPRS stating categorically that the proposed tariff will not be applied, and that its only objective was to ‘engage with stakeholders’ before its Annual General Meeting]
At the outset, the scope of the licensing requirement is a matter of concern. The IPRS notice states that its tariffs are applicable to live-streaming of Online Events of Music (Musical & Literary works) by way of Live Performance, or Music Videos and Disc Jockey (Sound Recording). The conditions (unhelpfully) mention that ‘live performance’ means music by performers in person, and Disc Jockeys means playing a sound recording.
IPRS subsequently issued a clarification about the scope of the license, which ended up merely creating more confusion. In a notice it circulated through Twitter, IPRS ‘clarified’ that the livestreaming license is not applicable to live concerts of folk or classical music, or shows which play ‘non-copyrighted’ music. Given that IPRS has no authority over non-copyrighted music, this ‘clarification’ is particularly baffling. [Edit 29/7: The press release also states that it will not apply to ‘free’ performances on Youtube, Facebook or Instagram which are not ticketed or paid for].
Live (analog/offline) performances of musical works generally require a license for performing or communicating the work under Section 14(a)(iii) of the Copyright Act. On the other hand, it is unclear whether a digital stream is considered a ‘performance’ and communication to the public of the underlying musical works, or a reproduction of the underlying works, which would require distinct ‘publishing’ and ‘mechanical rights’ to copy and issue copies of the work. In the case of a song recording, additional rights under Section 14(e) must also be required for broadcasting. The distinction is not only theoretical – the recent tussles between online streaming platforms over the applicability of statutory broadcast licenses is evidence of the need for greater clarity on the nature of online streaming and ephemeral performances.
The distinction is also consequential for the nature and obligations of platforms which host user-generated content, like Facebook or YouTube. Recent years have seen a spate of such platforms undertaking licensing deals with major music publishers and rights-owners for the use of their repertoire by users, spurred by legislative measures like Article 17 of the European Union Copyright Directive. In fact, IPRS only last week inked a new deal with Facebook to license its repertoire for Facebook and Instagram’s new music streaming features, although the press communication does not indicate whether this deal covers user generated content or only allows for the streaming of specific works.
This confusion over live-streaming licensing epitomises the need for legal institutions, and legislative institutions in particular, to take account of the new media of online digital music and clarify the exploitation of rights occurring through these new media, in a manner which allows for the generativity of online technologies and creativity of music production.
Tariff Transparency and Non-Compliance with Copyright Rules?
Apart from the scope of the licenses sought by IPRS, the manner in which the notice has been rolled out raises questions about the governance of the copyright society and the legality of the notice. The initial notice states that the new licenses will be in effect from July 1, even though a disclaimer notes that this is ‘subject to approval by members in the general meeting’. There is no notice for the AGM or an extraordinary general meeting for adopting the terms of the notice.
Section 33A of the Copyright Act read with Section 56 of the Copyright Rules, 2013, provide for basic rules to be followed in issuing a new tariff. Rule 56(6), in particular, requires the copyright society to publish the date of coming into effect of any new tariff at least two months in advance. Although the tariff is now reported to take effect in September, the initial tariff looks to be in flagrant violation of this rule.
This, finally, brings us to the question of governance of the tariffs set by copyright societies. Sections 33 and 33A provide ample scope for governmental oversight of tariff schemes. Rule 56(4) in particular, states that the Copyright Society shall follow guidelines on fixation of tariffs set by any court or the Copyright Board (now the IPAB), and that it ‘may’ consult user groups. To my knowledge, no guidelines applicable to IPRS’s tariffs have been established by the Copyright Board or by any court.
The draft Copyright Rules, released in June, 2019, contain certain provisions relevant to accountability and transparency in tariff schemes. For one, it provides for mandatory consultation by copyright societies of user groups, and also provides for certain guidelines or considerations to be taken into account in the fixation of tariffs, namely “(a) cross-sectional tariff comparisons; (b) economic research; (c) the nature and scope of the use of the work; (d) the commercial value of the rights in use; (e) the benefits to licensees.”
Perhaps some more deliberation on the transparency and accountability of copyright societies and tariff fixation is in order, and the draft rules could be a good starting point for such a conversation.