HOW ARE COLLECTING SOCIETIES WITHIN THE INDIAN MUSIC INDUSTRY COPING WITH THE COVID-19 PANDEMIC?
Over this past week, while being in a state of virtual lockdown even before the government enforced one, the music industry has been regrouping and redrawing strategies to face the economic catastrophe looming over it due to the COVID-19 pandemic.
Artist managers who have the dilemma of ensuring revenue flow at a time when all events and shows stand canceled are planning to utilise the digital space to their benefit. Carefully curated, entertaining and interactive digital shows seem to be the immediate future for artists.
While a fair number of artists do have some sort of income through royalty, endorsements and other avenues, live musicians, studio employees, and the daily wage earners are left to fend for themselves. We raised the issue for the need of a corpus to help them overcome the crisis and while music industry representatives welcomed the idea, they remained skeptical about its workability. This is because the daily wage earning sector is largely unorganised and not represented by any entity.
This brings us to five entities of the music industry which are collectives representing the different stakeholders.
Indian Performing Rights Society Ltd (IPRS) the recognised collecting society that represents composers, authors, and publishers.
Phonographic Performance Limited India (PPL) that represents music labels/sound recording owners for public performance.
Novex Communications Pvt Ltd, which also represents some labels / sound recording owners for public performance.
Phonographic Digital Limited (PDL) that represents sound recording owners for their digital rights, and
Indian Singers’ Rights Association (ISRA) which represents singers.
These entities are responsible for royalty collection and distribution and protecting the copyrights of their members.
Dealing with COVID-19
These bodies represent the majority of the Indian music industry, which makes them vulnerable to the economic upheaval due to the COVID-19 crisis. While they represent the artists, musicians, authors and copyright holders, they also have an obligation towards their employees.
“We shut down our office even before the lockdown as it was the practical thing to do. There are no events happening and no commercial establishments are open so no work was going to happen. We have already paid off this month’s salaries to our employee as it will be helpful for them,” said Miket Kanakia, Director, Novex Communications Pvt Ltd.
While the government has ordered a mandatory shutdown, PDL had self-enforced a 50% staff attendance rule before that.
“We have followed the government’s directive and have asked our employees to work from home. PDL has also distributed their salaries last week itself as money is also an essential need right now,” says Prashant Dogra, CEO, PDL.
One cannot predict the short or long term effects of the COVID-19 pandemic but the impact will be global. This will drastically change the way business is done. Due to the long shut down, businesses will take time to recover. The immediate effect of which will reflect on royalty collections.
“The collections in February were very low and we thought it would pick up in March but this month has been chaotic. This economic quarter will be a complete wash out,” laments Rakesh Nigam, CEO, IPRS.
Even as the music industry is trying to come to terms with the crisis, PPL is working towards maintaining liquidity by distributing royalties on time.
“In spite of revenues having dried up due to the large scale cancellations of events, we are committed for making payments to all our members as per norms. We are looking to ensure that our members do not face liquidity issues. We haven’t matched the incomes we had budgeted for in March but we will pay members as per schedule,” says Rajat Kakar, CEO, PPL India.
Meanwhile, to deal with the COVID-19 crisis IPRS has announced an Emergency Relief Package for its members. The money will be paid to around 3150 author and music composer members across various geographies, to meet their basic needs for the next three weeks.
Speaking about the package, Javed Akhtar, Chairman, IPRS says,
“It is our duty to support the call made by our Prime Minister, Mr. Narendra Modi for society to support each other through this 21-day lock down period. This payment by IPRS is our contribution for the time being to help our creator members tide over the 21-day lock down to be able to purchase basic necessities.”
While IPRS has taken the lead, in a way, ISRA is working out a viable and practical solution amidst the COVID-19 crisis.
“The board of directors is discussing some aspects and we are finding a practical way to deal with the situation. We have recognised the need to not panic, over react and ensure our efforts are not a waste. ISRA also has a role towards society at large and not only to our members. We will take a call at the right time,” asserts Sanjay Tandon, CEO, ISRA.
Events industry in crisis mode
The mass cancellation of events and recordings has only increased the pressure on these entities. They will now have to ensure that upcoming royalty distributions are met on time.
“PDL has notified its members that work will be affected as we are working from home. We were in the process of automating content ingestion. Now we are using that mechanism to speed up content ingestion from home. PDL understand our members need to make payments so are working remotely to ensure royalty distribution. We have already made a couple of payments. PDL is trying to help its members in any way we can,” explains Dogra.
The industry is still coming to grips with this unprecedented crisis. Not just the music industry but also the events and entertainment world have gone for a toss. The en masse postponement and cancellation of live shows, weddings, sporting events and the closure of commercial establishments have put the industry in a quandary. This will naturally affect the royalty collection of the mentioned bodies.
“Many major events have got cancelled. We don’t know if the IPL will happen in some form. Novex Communications has asked its members, the music labels, to put an embargo on the payments and they have agreed. We are not asking for money from our debtors neither are we paying our creditors. This happens because of the trust factor between two entities. We haven’t defaulted on our payments in 8 years but right now it is force majeure,” states Miket.