* A fair decision, says Vijay Lazarus, President IMI
MUMBAI: A Division Bench of Supreme Court comprising of Justice Altamas Kabir and Justice Cyriac Joseph, Friday awarded a stay in favour of Phonographic Performance Ltd. against the order of the Copyright Board concerning royalties to be paid for broadcasting music by Radio operators, lawetalnews.com has reported.
The rate of royalty fixed by the Copyright Board, after earlier Supreme Court directions, was two percent of the net advertising revenue of each radio station including Entertainment Network (I) Ltd (ENIL). This two percent royalty was to be proportionately divided between all parties.
(Vijay Lazarus, President, IMI, told RadioAndMusic.com, This is a fair decision as far as we are concerned, because 2 percent was a very unfair rate....
Anurradha Prasad, President AROI, told RadioAndMusic.com, "This is a stay till the 29th of March only. I have complete confidence in the judicial system of the nation, and I am sure that the Honble Supreme Court will consider the complete scenario in depth and give a fair verdict. As far as my view on the issue of quantum of music royalty is concerned, I believe the radio industry will suffer and will not be able to grow if, along with humungous license fees, it is also saddled with unrealistic and unfair music royalties. Let us wait and watch what the Honorable Supreme Court decides."
Asked what would be a fair rate of royalty acceptable to the Music Industry, Lazarus added, A lot of application of mind will be required to determine a reasonable rate....
Prashant Panday, ED & CEO - ENIL, told RadioAndMusic.com, "Supreme Court has not gone into the merits of the case yet. They have only given time for both parties to put thier case across. At this point in the time the honourable supreme court has stayed the Copyright Board order till 29th March, however whilst staying the order till 29 th March they have not fixed any rates at all to be paid to music labels, which has put the rates issue in a limbo. This has led to a confusion. We are sure once we are heard, the matter will go in our favour as we will be able to prevail on the Court our point of view".
It will be recalled that in its order of 25th August last year, the Copyright Board had directed that FM radio companies would have to share 2% of their net advertising revenues (total ad income minus agency commission and government taxes) with the music companies as royalty. The new revenue share model worked in favour of the FM radio broadcasters while upsetting the music companies which saw their earnings from the sector shrink. The FM radio broadcasters coughed out Rs 1.2 billion, or 18 per cent of their net ad revenues, as music royalty in FY'10, according to industry estimates. A 2% cent share, as the Copyright Board had directed, would mean the music companies would have taken away just Rs 140 million in FY'10.
Vineet Singh Hukmani, MD, Radio One, told RadioAndMusic.com, "It is what is expected given the judiciary needs time to look at the case on merit. We have faith in the judiciary to do whats right on 29 March by upholding the copyright board order of royalties at a max 2 percent. With this out of the way the govt needs to allow extension to 15 years and release more spectrum so that auctions for phase 3 allow rescue of return on capital of existing players....
Apurv Nagpal, MD, Saregama told RadioAndMusic.com, "Thank God for the judiciary. We are very happy that our stand has been vindicated".)
Appearing for Phonographic Performance senior advocates Mukul Rohatgi and Rohington Nariman 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.
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.
ENIL represented by senior advocates KK Venugopal and Abhishek M. Singhvi, argued that since the rate of two percent was fixed by the Board after taking copious evidence and on the direction of the Supreme Court, the same should remain in force.
The Bench 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. After hearing both parties the court posted the matter for further hearing on March 29 while granting interim stay on the rate fixed by the Copyright Board.
Petitioner ENIL is a subsidiary of Bennett, Coleman & Company Limited and owns 32 radio stations across the country under brand name of Radio Mirchi 98.3 FM.