The promulgation on Government Regulation on Copyright Royalty Management of Song and/or Music (PP 56 Year 2021) in March has raised concerns of many stakeholders.
In the perspective of musicians, this regulation is appreciated and seen as a new hope in empowering the music industry. However, practitioners from the retail, cinema, radio and entertainment sectors see this as additional burden to production cost.
Holistically, this should be seen as a progressive move by the Indonesian government in protecting and appreciating Indonesian musical talents. Through this government regulation, we get a clearer picture in the management of royalty at the national level.
For example, PP 56 Year 2021 explains further the concept of Commercial Public Services that are required to pay royalty, classifying commercial public services into 14 forms of services that are obliged to pay royalty. This means there are more certainty for musicians to profit from the commercial use of their works.
PP 56 Year 2021 is something that should be appreciated by Indonesian creative industry practitioners, especially musicians. However, it does not mean that Indonesia’s copyright policy is out of needs for further improvement.
There are some things that we need to think about in improving our copyright policy for the better. From the current state, here are some issues that we should address:
Henry Soelistyo, an academician from Universitas Pelita Harapan, opined that PP 56 Year 2021 which focuses on song and music might raise a discrimination in the holistic landscape of copyright royalty management. This is because Indonesia’s Copyrights Law acknowledges not only works in the form of song and music, but also other forms of works, such as choreography.
In this point of view, PP 56 Year 2021 creates an impression that song and music have a special position compared to other types of works. This would beg the question “What about choreography? Theatre? etc.” that needs to be answered.
Power differences between author and producer
In copyright contract negotiation, author and exploiter (be it music label, film producer or publisher) often stand on unequal bargaining position.
Authors, especially young authors, usually stand in a weaker position than exploiters due to their lack of knowledge and resources of the industry. Exploiters usually hold higher bargaining position as they are equipped with experience, capital, equipment and even a legal staff in drafting the copyright contract.
This often leads to a contract being granted in a “take-it-or-leave-it” basis; a condition where authors do not have a room for negotiation with the exploiters. Often, this “take-it-or-leave-it” contract asks the author to give all their rights to the exploiter to be produced in a large scale. This would also mean relinquishing the author from all rights over their works. In Indonesia, this type of contract is known as “beli putus.” Therefore, an instrument to balance out the bargaining position between authors and exploiters is needed.
Another problem arising in the copyright policy landscape is the transparency of information between authors and exploiters. After licensing their works to exploiters, authors often face difficulties in accessing information on the number of works produced, sold or even the amount of revenues derived from the exploitation of their works by the exploiters. This would lead to authors not knowing the exact condition on how their works are being exploited.
Learning from similar situation in European Union (EU), the Indonesian government might like to use EU Copyright in the Digital Single Market Directive 2019 (EU C-DSM Directive) as a reference in tackling this issue. Article 19 of EU C-DSM Directive mandates exploiters to provide information transparency to authors. This way, authors are guaranteed the access to information about the exploitation of their works.
Opportunity of re-negotiation
Copyright contract negotiation between authors and exploiters usually happen in the beginning of the exploitation process. This, however, is critically not ideal to the unpredictability of the creative industry. The creative industry is dynamic and unpredictable. A work that is expected to be a big hit might not sell well and vice-versa. Problem might arise when a licensed work unexpectedly becomes a best-seller, generating revenue far beyond expectations.
When a work becomes a best-seller, there will usually be a significant gap between the valuated royalty agreed during contract negotiation and the real revenue generated from the work. The problem is authors often face difficulties in re-negotiating the amount of royalty when their work becomes best-selling. As a result, the author will be in a position where they cannot enjoy a fair amount of revenue generated from their work.
Seeing how EU tackles this issue, Indonesia could again learn from the EU C-DSM Directive. Article 20 of EU C-DSM Directive provides authors and performers an opportunity to re-negotiate the contract when “the remuneration originally agreed turns out to be disproportionately low compared to all the subsequent relevant revenues derived from the exploitation of the works or performances.”
Reflection on Indonesia’s copyright policy
With Indonesia now shifting its status from a resource-exporting country to a knowledge-based economy, copyright regulation and policy will be an integral in the process. Therefore, Indonesian policymakers should be aware of these copyright policy issues to improve the country’s copyright system. With a better copyright law and policy, the creativity of the Indonesian society could bring benefit not only to the authors and performers, but also the whole Indonesian economy in the global knowledge-based economy.
Disclaimer: The view expressed on opinion article doesn’t necessarily reflect the opinion of The Finery Report. The opinion belongs to the author of the article.