This article is written by Ansari Qamar Zarfishan, pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.

Introduction

Listening to music creates a soothing experience, that is why music is used in commercial areas like; restaurants, stores, pubs, amusement park, banquet hall, etc. to have a delightful ambiance and attract customers. But you cannot simply add music to your commercial spaces, one has to obtain a music license for it in compliance with the Copyright Act, which can be done through various Copyright Societies. Now let us discuss what is a music license and what are the requirements of obtaining a license. 

What is a music license?

Music License is a process of taking permission for authorization, validation and protection of musical work. Section 2 (p) of Copyright Act, 1957 defines ‘musical work’ as ‘a work consisting of music and includes any graphical notation of such work but does not include any words or any action intended to be sung, spoken or performed with music’. Therefore, a Music license is obtained when you are using the music for commercial purposes in public.

Why is it necessary for a restaurant or store to acquire a Music License?

Music license is granted to protect the interest of the people involved in creating the music namely; the composers, songwriters and publishers.

What are the types of music license

Indian Performing Rights Society (IPRS) has categorised the Music License into the following types:

• Music License for Public Performance such as; performing in an event, pubs, disco, amusement parks, service-oriented premises, waiting rooms, hotels, guest rooms, resorts, clubs, banquet halls and auditoriums, etc. you require an Annual Background License.
• Music license for Television and Radio, you require a Radio Broadcast License.
• Music license to play music at an event such as fashion show, award functions, corporate events, or product launch, you require an Event License.
• Music license for music used as a ringtone or Caller Back Ring Tone (CRBT).
• Music license for Commercial purposes such as advertisements or promotional videos.
• Music License for Streaming or Over The Top (OTT) platforms such as karaoke service on the internet, interactive and non-interactive streaming of music on the internet, music used for sound recording on Electronic Digital Medium, etc.

Who issues a music license

The music license is issued by Copyright Society or performing right society duly registered under Section 33 of the Copyright Act. Copyright Societies are entities that deal with the collection and distribution of royalties to the registered members accrued from the exploitation of music.

There are three Copyright Societies namely:

1. Phonographic Performance Limited (PPL)
2. Indian Performing Rights Society (IPRS)
3. Indian Singer Rights Association (ISRA)

Music license for pre-recorded music in the form of CDs, radio, music cassettes, gramophone records or any other audio-visual form which is played at a restaurant or store is issued by Phonographic Performance Limited (PPL) Section 18. 

Whereas, when a live event conducted or performed by a singer, live band, or a concert at a restaurant or store, in such case, the license is issued by Indian Performing Rights Society (IPRS) Section 18.

And, Indian Singer Rights Association (ISRA) which was incorporated in 2013, Section 38 B of the Copyright Act, administers and controls the utilization of the performance of its members and distributes the royalties collected among its members (singers).

All these societies function in different areas, PPL deals with songwriters and music composers for sound recordings i.e. music labels; IPRS deals with rights in musical work and literary work i.e. music composers and lyricists and ISRA deals with performers i.e. singers.

What are the requirements for obtaining a music license?

To acquire a music license for your restaurant or store you need to look into the prerequisites of the license before applying for it, which are as follows:

• The audible range of music,
• The area up to which the music is audible (in square meter),
• The number of seats in your restaurant,
• The type of area where the music will be audible such as the dining area, restrooms, bars, kitchens, etc.,
• The type of device used to play music such as radio, CDs, TV, etc.

What are the fees of the music license

The Music License specifies the conditions of use, the period of license and the royalty that will be provided to the owners of the copyright. (Royalty means the payment made for use to the owner of the copyright). The copyright society collects fees of music license and distributes it among the owners of copyrights.

The amount of fees of a music license obtained depends on the following factors:

• The type of place where the music is being played,
• The number of hours the restaurant or store streams the music,
• The number of songs played at the premises,
• The capacity of the premises where the music is being played,
• The type of business you are engaged in.

However, where a music license is obtained from IPRS for conducting a live performance at your restaurant, the amount of fees (or royalty rates) for a license is Rs. 10, 000 per annum for Metro\ Major cities and Rs. 5,000 per annum for Non-Metro cities. Various tariff schemes are available depending on the type of events carried on at your premises, the minimum royalty fee for the public performance of music at stores is Rs. 2500 per 5000 sq. ft. Whereas, for the music license obtained from ISRA, the Royalty or license fees would be calculated at the Price of the Least Priced Drink on the Menu Card. Subject to a minimum of Rs 3,650/- p.a.

If you fail to make payment for the license granted by PPL, you will be liable to pay an interest of 18% p.a with a penal charge up to Rs 2 lakhs, whereas, for the non-payment for the license granted by IPRS, you will be liable for an interest rate of 30 % p.a.

What documents are required for obtaining a music license?

When you apply for a music license you are required to submit the following the documents namely:

• identification certificate such as PAN card, Aadhar card, 
• for address proof such as electricity bill, Voter ID card, Drivers’ License, 
• if the business is a registered company you have to submit the certificate of registration, 
• list of music which you wish to play, etc.

How to get a music license?

You can get music license by making an application at the facilitation centre of the respective Copyright Societies and clearly provide all the documents required.

What happens if I play music that I have not obtained a license for?

If you play music in your store or a restaurant without obtaining a license, you are guilty of committing an offence of infringement of copyright under the Copyright Act. 

Section 63 of Copyright Act states that any person who commits an offence shall be punishable with imprisonment for a term which shall not be less than six months which may extend to three years and with a fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees.

Section 63 A states about the second or subsequent conviction of any such offence shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with a fine which shall not be less than one lakh rupees but which may extend to two lakh rupees.

Exceptions

Looking into the details about music license and the consequence of not obtaining a music license; does that mean one cannot play music in a store or restaurant without any music license? The answer is NO! there are certain scenarios wherein you do not need any license to play music. The exceptions are:

• Where the music is played as a part of the activities of an amateur club which is not established or is not conducted for gaining any profits.
• Where the area of your store or restaurant is less than 5000 sq. ft. you can play TV or radio.
• You can play old classical music or songs whose copyright has expired.
• If you are a seller of recorded music or CDs, you can play music or recorded songs in your store only for the purpose of promoting it.
• You can play songs in a store or restaurant which are originally composed by you or the performer who is performing it.

So, if you meet any of the above exceptions you can play music freely without any cost.

Case laws

The Indian Singers Rights Association vs. Chapter 25 Bar and Restaurant, 2016

In this case, the defendant was playing music without obtaining any clearance from IPRS (plaintiff) which was violating their public performance rights and Right to Receive Royalties (R3). The court had held that exploitation of the performance of the members of the Plaintiff by the Defendant by playing the performance in its bar and restaurant without obtaining the Performers’ Rights Clearance Certificate constitutes an infringement of the R3 of the members of the Plaintiff’s Society. Thus, the Defendant was held liable to pay a fine of Rupees Twenty thousand within four weeks.

Performing Rights Society vs. Hawthorns Hotel, (1993) Ch 855

In this case, the hotel had arranged the performance for all the public who were the guests of the hotel without obtaining any license. It was held that infringement occurs when the defendant’s action interferes with the proprietary right of the author and causes him injury. The defendant infringes the copyright when the public performance is made on a payment.

Conclusion

If you are the owner of a restaurant or a shop and you want to play music in your commercial area, you should obtain the license for it from the respective Copyright Societies depending on your purpose and areas. By filling out the forms and registering yourself you can easily play music in your commercial premises without any fear of violation of copyright issues.

References

• https://www.iprs.org/wp-content/uploads/2018/09/RB-Restaurants-Bars-Lunch-HOmes.pdf
• https://www.iprs.org/wp-content/uploads/2018/09/RTL-Retail-Premises.pdf
• https://www.pplindia.org/tariff
• http://www.isracopyright.com/tariff_scheme.php
• https://www.nolo.com/legal-encyclopedia/playing-music-your-store-how-avoid-paying-it.html
• Law Relating to Intellectual Property by Dr. B.L. Wadehra
• https://www.lawyered.in/legal-disrupt/articles/music-license-hospitality-industry-theekshna-amin/
• https://indiankanoon.org/doc/94223814/
• https://corpbiz.io/learning/music-license-for-playing-music-in-restaurants-in-india/#:~:text=The%20music%20license%20is%20issued,Performing%20Rights%20Society%20in%20India.&text=Phonographic%20Performance%20Limited%20(PPL)%20grants,premises%20of%20your%20food%20business
• https://copyright.gov.in/Documents/CopyrightRules1957.pdf

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