From
Punjab to Tamil Nadu, music labels are up in arms against the
anti-competitive behaviour of the country’s only registered copyright
society for ‘sound recordings’ – Phonographic Performance Ltd (PPL).
As explained earlier on this blog, PPL is controlled by a coterie of the
seven biggest music labels – (i) Virgin-EMI (ii) Universal (iii) Tips
(iv) Sony (v) Saregama (vi) Aditya (vii) Venus – all of whose
representatives are in control of the Board of Directors of PPL. Any
complaint against PPL can be presumed to be a complaint against these
seven music companies which control PPL.
(a) The first complaint – ‘Catrack Entertainment Pvt. Ltd.’
The first complaint is from ‘Catrack Entertainment Pvt. Ltd.’, a music
label based out of Chandigarh. Gaurav Trehan, Director at Catrack has
complained that PPL is insisting that its members, licence to it, the
right to collect performance royalties for all royalty streams despite
the fact that some labels do not want to licence over to PPL the right
to collect royalties for the mobile ringtone and digital streams.
Technically, under the law, a member of PPL can choose to selectively
licence only certain rights to PPL i.e. while a label can licence to PPL
the right to collect royalties for public performance in hotels and
restaurants, the same label can choose not to licence the ringtone
royalty rights for the very same sound-recording.
There are three specific issues with regard to this complaint by Trehan:
(i) Do the bye-laws of PPL require all its members to assign over to it
all rights in a sound-track or can members decide the specific nature of
the rights which are licensed over to PPL? To the best of my
information PPL does not have any bye-law which imposes any such
restrictions on the nature of rights which may be licensed to PPL by its
members. In such a case it is possible to request the Registrar of
Copyrights to cancel the registration of PPL as a Copyright Society.
(ii) Is PPL using its ‘dominant position’, in the music industry, to
force its member companies, to licence to itself, even mobile and
digital streams of exploitation? The fact that PPL has a ‘dominant
position’ in the music industry is undisputed since it is the only
registered copyright society for the administration of sound recordings.
The condition of bundling ‘mobile & digital streams’, with public
performance royalties from other ‘streams’, severely and unfairly
restricts the rights of the members to choose the most competitive mode
of exploitation of their works. There is simply no logical reason for
insisting on the bundling of such rights.
(iii) Alternatively, it is possible for members of PPL to level charges
of cartelization amongst the seven music labels which control the board
and administration of PPL. In such a case any penalty by the CCI would
be against these seven music labels and not PPL.
(b) The second complaint – ‘South Indian Music Companies Association’ (SIMCA)
Anita Iyer, a journalist with ‘Sound-Box’, has carried an interesting story (it can be accessed over here)
on how members of the South Indian Music Companies Association (SIMCA)
have publicly alleged that PPL is denying membership to South Indian
music companies on the frivolous grounds. For its part, PPL has defended
its actions on the grounds that these South Indian Music Companies have
failed to fulfil the eligibility criteria for membership of PPL. In
pertinent part, PPL informed these music companies that the eligibility
criteria for ‘Associate Members’ of PPL was at least 50 music albums and
that cover version albums, classical and devotional albums are not
counted for this purpose. This would mean that only ‘film music’ is
being recognized by PPL for its eligibility criteria. PPL's registration certificate
however states that it is required to administer all sound-recording.
There is no distinction between 'film' and 'non-film' music.
I have managed to dig out the qualification criteria as laid out in
PPL’s ‘Articles of Association’ (AoA) which can be accessed over here. The term ‘Associate Member’ is defined as “An
Owner of Sound Recording Copyright or Owner of Reproduction of
Recording rights and Musical & Literary Works, who has registered
with the company, at least one work in his /its name, and as recorded in
the Register of Works maintained, and any person who holds right of
administration of copyrights for and on behalf of and at behest of the
Copyright Owner, shall only be admitted as an Associate Member of the
company.” This definition clearly does not distinguish between
owners of ‘film’ music and ‘non-film’ music. Unless this definition has
been amended, PPL cannot deny membership to the South Indian music
labels. In case this definition has been amended, PPL will also have to
establish that the new definition has been approved by the Copyright
Office.
Irrespective of the definitions contained in the AoA, it is also
possible for members of SIMCA to file a complaint against the cartel of
seven companies controlling PPL on the grounds that they are attempting
to push out potential competition from the new labels.