* SC to Madras HC: Dispose appeal against Copyright Board order in 2 months

NEW DELHI / MUMBAI: The Supreme Court's directive today vacating the stay on the order of the Copyright Board fixing a royalty of two per cent to be paid by radio for music broadcast has been welcomed by the Association of Radio Operators for India (AROI).

A division bench comprising Justice Amaltass Kabir and Justice Cyriac Joseph directed that the matter be sent back to the Madras High Court which is at present hearing the matter, but directed the Court to dispose the appeal against the Copyright Board's order within two months.

After briefly hearing counsel, the Bench said it would not interfere in the proceedings of that Court as the order of 22 December which had been challenged was only an interlocutory order.

Welcoming the order, AROI said in a statement, "The rates aimed to correct a long standing demand of Radio operators in India who were paying royalty at rates that were almost 10 times the prevalent rates in other countries on the subject. The earlier rates were effectively making the private radio industry in India financially unviable and analysts had begun to script obituaries for the industry on the whole."

AROI President Anurradha Prasad told RadioAndMusic.com, I am satisfied with the court directive and hope that the industry will now move on to the next stage – Phase III – and the Government will expedite announcement of the auctions....

Reacting to the Supreme Court order, Apurv Nagpal, MD Saregama India Limited, said, We're delighted that the court has mandated that the matter be closed within 2 months. We have no issues with the stay being vacated for this period as two months do not matter in the long run. I am yet to receive any further details on this order so am unable to comment any more....

Radio One MD Vineet Singh Hukmani told RadioAndMusic.com, That was the legally appropriate thing to do considering that the matter was initially presented at the Madras HC, and as I mentioned earlier, we had complete faith in the judiciary to do the right thing....

Also the courts and judiciary realize that a lot of work has gone into the Copyright Board's ruling, which is only aiming to bring the royalty regime on par with fair global standards,... Hukmani said, adding, It is this decision which allows a licensed industry that provides free entertainment to the masses to progress, allows the smallest of stations to get out of the red....

Echoing a view generally shared by the Music industry, space veteran Achille Forler, MD of Deep Emotions Publishing, said: The Copyright Board is the proper forum for setting royalties rates but this Board clearly lacks expertise; as a result, both content owners and content users suffer. The Parliamentary Committee has rightly recommended that the Board should be reconstituted with full time experts on valuation and copyright law and be well-versed in industry practices. The ball is now in the government's court....

Apurva Purohit, CEO Radio City, said, "The copyright board judgment of 25th August 2010 was a result of over 9 years of litigation across various courts. Hundreds of hours of hearings and national and international precedents were taken into consideration by the copyright board to arrive at this judgment. Thus we were very confident that the supreme court would recognize the application of mind and diligence that had been put in by the copyright board."

Harrish M Bhatia, CEO MyFM, told RadioAndMusic.com, This news comes as a relief to the Radio players as music royalty is one of the key concerns affecting the viability of this medium. The 2% royalty move is a win – win situation for both the music industry and radio players as greater revenues means more royalty for music owners. We are very happy that our stand has been vindicated and the same affirmative action is expected from Madras HC. However, a lot more needs to be done by the government before Phase III rolls out....

Hukmani urged the Music industry to look positively at the promise Radio holds for it. The music industry must realize that they are attempting to kill the goose that lays the golden egg for them,... he said, adding, In Phase 3, with 800 stations, I'm sure their capacity to project revenues will help them understand and align with the fair way of doing things....

Ravi Nair, Director Programmes Radio Mango, said, "We welcome the Supreme Court decision and hope that this will pave the way for a quick decision on the royalty issue. Without a rational royalty structure in place, phase III proposal will be half baked. With over 800 new frequencies to come, Music Industry should be smart enough to realise that the Radio Industry is giving them the golden eggs and killing the goose will be plain stupid. If the rates remain irrational, increasingly radio stations will begin reduce quantum of music and adopt alternatives. So the attempt by the music industry should be on how to increase the quantum of music being played! Also, let us not forget that radio is the best medium for music companies to launch and promote new music."

The AROI statement released after the Apex Court's order, said that the rates were fixed by the Board after a very detailed assessment of the Radio and Music industry, taking into account international practices in various countries on the subject.

AROI also welcomed the revenue related rates fixed by the Copyright Board as the royalty revenue of music industry is now linked to the growth of the Radio industry. As the revenues of the radio industry grows, so will the royalties earned by soundtrack owners.

It noted that with over 800 FM stations to be auctioned by government shortly under Phase III, the revenues of the industry and consequently the royalty pie shall grow rapidly. AROI expressed the hope that the Music industry will abandon its confrontationist approach and join hands with the Radio Industry as partners in this growth story....

On 18 March 2011, the Supreme Court had stayed the Copyright Board's Order on Music Royalties and listed the matter for 29 March, when it was adjourned to 5th April, as the Court wanted to hear the matter in detail.

It will be recalled that the Copyright Board had, on 25 August 2010, fixed a royalty of two per cent of the net advertising revenue of each radio station including Entertainment Network (I) Ltd (ENIL) after earlier Supreme Court directions. This two percent royalty was to be proportionately divided between all parties.

Phonographic Performance Ltd. (PPL) had argued that many voluntary licensees are paying between Rs.500 to Rs.900 per hour of broadcast as compared to Rs. 600 paid by All India Radio (AIR) per hour of broadcast. They argued that both the rates are more than the rate fixed as per the Copyright Board's order of two percent of the advertising revenue. (Till the order came, the radio stations had been paying royalties on an hourly rate which was around Rs 850 per hour of broadcast.)

An initial order fixing the rate at Rs.661 by the Copyright Board had been set aside by the Bombay High Court and the Supreme Court had affirmed that order and directed the copyright board to set a revised rate after taking into consideration rates being paid by various broadcasters including that of AIR.

The Bench had stated that in its view the benchmark should be the rate as paid by AIR. However the Copyright Board had decided not to apply the rate as was being paid by AIR.