No Broadcasting Rights under 31D for Music Streaming Platforms

By Nitika Sinha and Harsh Maheshwari

Digital age is the new age of possibilities wherein consumption of music has dramatically shifted from physical media to streaming platforms. With this shift, the debate around the rights of music owners and whether these should be granted to streaming platforms has intensified. This article explores both the complexities of the issue, considering both benefits and challenges and highlights a recent legal judgment that has put an end to this long perplexity.

THE IMPORTANCE OF MUSIC OWNERSHIP RIGHTS

Music ownership rights are foundational to the industry, ensuring that creators and the right holders are compensated for their contribution/creation. Because of these rights the owners can also control when, where, and in what manner their music is distributed and/or profited. There are different types of rights that the owners/creators have under Section 14 of the Copyright Act including the right to reproduce, perform, translate, issue copies, make adaptations as mentioned.

THE ROLE OF STREAMING PLATFORMS

Streaming platforms like Wynk Music, Spotify, Apple Music, and Amazon Music have become the primary means through which listeners access the music of their choice. In return, these streaming platforms provide a vast audience, increased visibility, and potential revenue streams. It is important to grant rights to such platforms for reaching a global audience, in a world where physical sales are declining, streaming is often the only viable means of distribution for many artists.

In addition to streaming, they offer data analytics to help the creators to understand their audience which further helps the platform to tailor their marketing strategies.

But on the other hand, some critics argue that the current revenue sharing model is skewed in the favor of platforms, leaving artists/creators with a smaller piece of their pie. As a result, the creators advocate for more equitable agreements that would ensure that the music owners receive their fair share. Some also fear that granting rights to such platforms will lead to erosion of their rights and the arbitrary ownership of them.

AN END TO THE LONG-LASTING DILEMMA OF SECTION 31D’S APPLICABILITY UNDER THE COPYRIGHT ACT, 1957

As per Section 31D of the Copyright Act, 1957, any broadcasting organization who desires to communicate to the public by broadcasting or by way of published performance of a literary or musical work may do so subject to prior notice and fixing rate of royalty in order to reach a widespread audience. In 2019, Spotify streamed the songs of Warner Chapple Music but as a result an infringement suit was filed against them resulting them to pay damages of more than INR 6 Crores as their application under Section 31D was not maintainable.[1] As a result, both the parties entered into a multi-territory licensing agreement including India. The case of Tips Industries Limited v. Wynk Music Limited.[2] was also based on the provisions of Section 31D, where in the popular online music streaming company Wynk Music Limited self-interpreted that by qualifying as a “broadcasting organization,” it might also benefit from these statutory rights. But the Hon’ble Court stated that Wynk was not eligible for these licenses as the statutory broadcasting rights did not apply to online music streaming and downloading and Wynk was not allowed to sell or download Tips’ music without obtaining approval from Tips Industries.

In 2023, the division bench of the Bombay High Court reiterated the 2019’s order and stated that “Section 31D’s statutory licensing was confined to traditional non-internet based radio and television broadcasting and performances alone (linear broadcasting mediums), explicitly excluding non-linear, on-demand streaming services”. Finally in 2024, the settlement between the parties was presented before the Court & The Hon’ble Court directed Wynk Music Limited to pay INR 12 crore plus applicable taxes for using Tips’ music repertoire from 1^st September 2016 to 10^th September 2020.

CONCLUSION: FINDING A BALANCE AHEAD

As the music industry continues to evolve, finding a balance that respects the rights of creators while embracing the opportunities provided by such platforms is crucial and further promotes fair and sustainable digital music ecosystem. Moving forward, the industry must work towards more equitable and sustainable solutions that benefit the artist/creator/owner involved. The following solutions can take into consideration by the respective authorities:

1. Comprehensive Licensing Agreements
   • The platforms must secure explicit licensing agreements with the creators covering all necessary mediums i.e. the digital streaming and downloads.
   • The respective parties should enter into a multi-territory licensing agreement as done in the above-mentioned Spotify Case of 2019.
   • There should be flexible licensing models that allow for adjustments made based on market changes, platform growth, or emerging trends in music consumption. This can also include options for renegotiation or periodic reviews of the terms.
2. Equitable Royalty Structures
   • There should be clear and fair royalty structures that compensate music owners adequately while allowing streaming platforms to remain profitable. There should also be tiered compensation models, where in the high-performing tracks or artists receive higher percentage of the revenue, incentivizing quality and popularity while ensuring fair compensation across the board.
3. Collaborative Content Curation and Promotion
   • Music owners and the platforms can collaborate on content curation, co-branding, and promotional campaigns that benefit both parties.
   • Joint marketing initiatives can amplify the reach of music content, benefiting the artist through exposure and the platform through user engagement.
4. Opt for Other Legal frameworks
   • Rather than going for an infringement lawsuit, the party should opt first for mediation or arbitration to avoid the lengthy and costly legal proceedings. This will promote a fast-paced process and protect the parties from public scrutiny.

Nieharika Sharma, Assessment Intern at S.S. Rana & Co. has assisted in the research of this Article.

[1] COMIP (L) No. 256 of 2019.

[2] 2019 SCC Bombay 13087.