The Quiet Royalties Heist

The Copyright Bill could dramatically change fortunes in India’s film industry. But the drama behind it is even more interesting

It is further agreed that the LYRICIST, on receipt of such payment, shall have no claim or right whatsoever including copyright, per­forming rights and all other rights in respect of the literary works, and that the COMPANY shall have unfettered freedom to assign, per­form in public or in private in whatsoever manner they choose the Said Film and all its ingredients, including the songs, separately or otherwise, and that such rights of the Songs shall be vested in the COMPANY to the exclusion of all others.

– A clause in a contract signed by the lyricist Saleem on 11 December 2008 with the producers of Prince, giving up all rights to his work in the movie

At short notice, film producers, writers, musicians and lyricists hurried to a meeting room at the Hyatt in Mumbai on Valentine’s Day last year. There was very little love in the air. The producers took their place on one side. Everybody else sat apart.

The meeting had been called by Kapil Sibal, Union Minister for Human Resources and Development, to discuss new provisions in a draft of the Copyright Bill that would be introduced in Indian Parliament in April. Unlike the rest of the Bill, these provisions had not been discussed earlier, and because of their tilt towards musicians and lyricists, music companies were up in protest. That’s why they were here.

Among other things, the Bill would make it impossible for writers, lyricists and musicians to give up their right to royalties. This prohibition was a calculat­ed act, for it bypassed music companies and producers—who usually made mu­sicians and lyricists sign over the rights to their work to them—and told creators: we’re making it mandatory for you to get roy­alties. They could certainly sign away the rights to songs, but not the right to collect royalties for those songs.

The restriction pleased writers and musicians. Their surge of optimism, however, stood in stark contrast with the apocalypse predicted by producers and music companies. “If this goes through, it’s the end of the road,” a music compa­ny executive said to me.

In the months before this meeting, they had visited Sibal alone, or in small­er groups, each side eager to push forth a point of view. They represented a society, an association, or simply a brotherhood, and they found the minister willing to listen. Even before these meetings, pro­ducers and author-composers had ar­gued over how royalties were allocated. This had gone on for years, but these were mostly individual dealings. Now the Government was about to take the mat­ter out of their hands entirely and cryst­allise it in law. And so, when they looked across the room, men who knew each other personally and had spent months and years working closely together saw not colleagues, but perpetrators of injus­tices future and past.

Most contracts in the film industry to­day are written to ensure that song-writ­ers and musicians sign away their rights to all royalties for a one-time lumpsum payment, even from unforeseen avenues that could come around in the future (such as internet downloads and mobile phone ringback tones that nobody had foreseen in an earlier era). Producers, in turn, are free to assign these rights to mu­sic companies for a minimum guarantee by way of payment. This is the system prevalent today.

If the new version of the legislation is passed, it will affect producers and music companies directly. The proliferating royalty streams currently not shared with author-composers will henceforth have to be split. The legal ground they currently have, to write contracts that make author-composers forfeit their right to royalties, will be a thing of the past. The industry is not amused. “How can the law become Big Brother?” asks Apurv Nagpal, CEO of Saregama (which owns Open) in an interview. The Government, he adds, has no business in­volving itself in contracts between two independent parties. Producer Mukesh Bhatt has demanded some answers too. “I want to ask the Government one single question: don’t I have the fundamental right to make a contract and decide on the percentage I want to give? How can you take away my right from me?” he plead­ed in Film Street Journal last December.

When Ameet Datta, an intellectual property lawyer at Luthra & Luthra, a New Delhi law firm, first studied the way India’s film industry operates, he sifted through hundreds of contracts be­tween writer-composers and producers or music companies. “We gathered them as part of a sample to see where author-composers had the ability to negotiate,” he says. Not one of those contracts let au­thor-composers retain “even a sliver of rights”, he found.

The film industry, like others, works on the basis of contracts. But unlike most other industries, the ties that bind a pro­ducer to, say, a writer, aren’t simply con­tractual. The nature of employment en­sures that most unit hands move from one project to the next as independent agents. Film hands speak of the insecuri­ties they live with, given how informal the arrangements—with or without con­tracts—actually are. They speak of the fickle nature of employers, who have the power to make or sully reputations. This, several industry insiders say, is why con­tract signers take the path of least resis­tance and accept legal agreements with­out much negotiation.

Datta draws a connection between the lack of negotiation and the fact that em­ployers don’t just take complete owner­ship of music rights, they more or less run the industry. “These 10-15 people dictate the course of their lives: ‘This is how you will live; I pay you like this; you sign away your rights; and you come back to me be­cause you have nowhere else to go.’”

In mid-2009, Datta had met Javed Akhtar at the lyricist’s behest. The meet­ing was connected to unexpected devel­opments on the amended Copyright Bill, the latest version of which has been 11 years in the making now. On 17 February 2000, a group of representatives from the education and law ministries, law schools, and the film industry, among others, met at a conference room in Shastri Bhavan, New Delhi. (Coincidentally, Datta was present too, as an assistant to advocates of Anand & Anand, a law firm.) Minutes of the meet­ing, the first of many, depict representa­tives tugging at provisions in the just-amended Copyright Bill of 1999. At the next meeting, five months later, a large part of the discussion centred on the rights of performers in cinema. One rep­resentative ‘argued vehemently’ for a ‘tilt in favour of film producers’. He said that “it’s the producer’s money that’s at stake and most films are flops and, therefore, there’s a need to provide favourable pro­visions for the film producer”.

The argument has not changed. Says Nagpal, “The risk of the music is entirely the producer’s, and huge investments are made for film music in terms of sets, shooting days and star fees. All these are made keeping in mind different revenue streams. Else, today no one in their right mind would invest such amounts in film music, given the extremely short shelf life and low success rate.”

In 2007, the Bill’s final draft was put up on the Copyright Office’s website. It was as they had discussed, with nothing un­expected. And then, quite abruptly, for reasons that Saregama executives say they didn’t understand, it disappeared. (A lawyer explains that the website had changed, and all the content on it was tak­en off for a while.) By the time Akhtar met Datta in 2009, according to sources with a stake in the amendment, there were in­dications that an even newer version of the Bill was being drafted. The news un­settled music companies and producers.

Akhtar, who among others was cam­paigning for a better deal for author-com­posers enshrined in law, wanted profes­sional advice from Datta. Akhtar and others had been pressing for a sizeable share of royalties for some time, but in­stead found that even the regular royal­ties due to them had stopped coming by mail. For Akhtar, this amounted to about Rs 20 lakh for one year, and he suspected that the royalty collection agency, the Indian Performing Rights Society (IPRS), had been hijacked by a small group of powerful music companies.

Akhtar told Datta that he wanted to do something about this for the industry he worked in. Datta was doubtful at first, but agreed to take on the case pro bono. (A consortium of music entities, including Saregama, had shortlisted Datta’s firm until they found he was advising the oth­er side.) He sifted through industry re­ports to calculate the size of the recorded film music business, and later learnt that Airtel’s music-related services alone ac­counted for Rs 400 crore.

Datta offered Akhtar and the others a simple way to run their campaign. “I told them it had to first be about money, and at a higher level about your right to be identified as an owner of your work.”

The money that funds the modern music industry streams in primarily from the sale of cassettes and CDs, broadcasts on radio and television, and phone ringback tones. These revenues are garnered mostly in the domestic market, where demand for Indian music is strongest, although a fair chunk comes from overseas as well. Of the three categories, sales of music in physical form has fallen by a third since 2005—from over Rs 450 crore to a little under Rs 300 crore now. At the same time, overall recorded music sales have risen from about Rs 490 crore to about Rs 627 crore in 2009 (source: IFPI). This increase is powered by growth in performance rights (radio, restaurant music) and digital sales (ringback tones, internet downloads and so on).

For at least two  Indian companies, the growth in earnings has coincided with a dramatic increase in ringtone revenues. Between 2006 and 2009, T-Series’ income from royalties increased from Rs 22.9 crore to Rs 227 crore, an 891 per cent increase in just four years. Sony BMG, another unlisted company, also saw its income from domestic royalties soar from Rs 6.2 crore to Rs 52.8 crore in the same period. If the revenue streams of the overall industry are an accurate indicator, the majority of these royalties came from performance rights and ringback tones.

When discussions on the Bill came to a close in 2005, ringback tones were a nascent revenue stream. Musicians and lyricists knew that the stream was promising, but few would have known that within five years, the biggest influence exerted on their industry would come from people with cellphones who bought song clips they themselves would never hear.

In August 2006, at a screenwriters’ conference at the Film and Television Institute of India (FTII), a discussion on the working conditions of film writers led to pandemonium. It seemed as if everybody there had a story to tell. Three writers told me, in as many words, that they realised then how widespread the misery was. “They talked of rampant exploitation,” according to Anjum Rajabali, who was at the discussion. That writers felt aggrieved was no surprise, but the extent of it was. “The humiliation of being a writer never leaves you,” confides Saket Chaudhary, writer and director of Pyaar Ke Side Effects, who was present that day.

The self-realisation that day at the FTII served to focus minds. In a couple of years, after meetings at Akhtar’s home, a new administration swept elections of the Film Writers Association on the promise of a better deal for writers. Rajabali, who wrote the story, screenplay and dialogue for Rajneeti, was among them, and he spearheaded the push to draft a standard contract for writers. The association tried to set a standard fee of Rs 3 lakh each for story, script and dialogue. But the amounts were reduced to Rs 2 lakh after a group of filmmakers complained that these costs were prohibitive, while some upcoming scriptwriters protested that it would price them out of the market. (To put this amount in perspective, the producer Sajid Nadiadwala, whose company had revenues of Rs 82 crore in 2010, offered a writer Rs 50-60,000 to write dialogue for a film with a budget of over Rs 50 crore.)

Towards the end of 2009, by which time Akhtar had met officials in the ministry and put forward his case for lyricists and musicians, Rajabali came across a press release stating that the ministry would hear the views of stakeholders in the Bill only till the last week of November. It gave him less than a week to prepare his appeal to the ministry. He pulled strings and wrangled a 10-minute meeting with Sibal. The encounter stretched on, with Sibal’s aides listening intently. Rajabali, who teaches at FTII, recalled them nodding their heads in a manner he found encouraging.

On 24 December 2009, the ministry released a statement that felt like a sucker punch to the music companies. It would give ‘independent rights to authors of literary and musical works in cinematograph films, which were hitherto denied and wrongfully exploited by producers and music companies’. Not everybody understood the implications of the new amendments immediately. But Rajabali, who had worked for writers’ rights, was excited by the release. “I was like,  yeah!”

Industry attention turned soon enough to Akhtar’s influence in Delhi. “We met him at a film party,” said a music company executive, recalling how Akhtar mentioned that he had influenced the shaping of the Bill. The executive’s financial officer nodded vigorously. “He calls this [the current system] indentured labour! Do you know how much he made on a non-film album?

Rs 25 lakh. If that’s indentured labour, I want to be indentured.” There were darker murmurs about Akhtar’s proximity to Sibal, and the meetings they’d had. He had lobbied. I asked the financial officer about his own lobbying efforts. “It was more of an education,” he said. The perception of Akhtar as underdog needed to change, they both felt.

Before the Bill was presented in Parliament on 19 April 2010, everybody with a stake in the matter met an assortment of ministers. The companies spoke of injury to the industry. Authors and composers narrated tales of human suffering. They gave Delhi a story.

“It began five-six years ago,” says Ravi Shankar Sharma, a music director. “They (the Indian Performing Rights Society) stopped sending me royalties. They told me that I had to sign a letter that declared that all rights belonged to music companies. I didn’t know what would happen if I signed it.” Instead, he gave the IPRS an ultimatum. If they didn’t give him his royalties, he would approach the Registrar of Copyrights for redressal. “If we sign the document,” Sharma says, “we’d be reduced to nothing.”

Sharma’s career has spanned half a century, during which he composed popular songs such as Chaudhvi Ka Chaand and Chanda Mama Door Ke. “Many years ago, this society was made for artistes. But what music companies have done is not good. They say all rights are theirs. Arre bhai, these are not your rights.” Frustrated, Sharma wrote them a poem:

Muft mein mehnatein insaan ka sauda naa karo.  / Gul ho tum , saare gulistaan ka sauda naa karo. / Jin ka haq hai, unhe pehchaano./ Dhan kamaao, lekin imaan ka sauda naa karo.

He then followed up on his threat, writing to the Registrar, GR Raghvendra, that the society owed 16 musicians and lyricists their royalties. Raghvendra was unaware that the IPRS, which is under the Copyright Office’s jurisdiction, had strayed so far from its intended purpose. He wrote to Rakesh Nigam, CEO of the IPRS, demanding answers. The answers were unsatisfactory. The Registrar then visited Sharma at his home in Mumbai, where a meeting was held with other composers and lyricists with similar complaints. Sharma had a tale so hopeless, it was funny: at a show to honour his achievements, worried organisers had told him that agents were demanding money for performance rights.

Sharma didn’t miss the irony of the moment. It was his show. These were his songs. But the royalty collection agency at the door would take home all the money, showing him none of it.

The Valentine’s Day meeting happened a year after Sharma’s complaint. Akhtar and Aamir Khan had a discussion, in which they disagreed about the importance of lyricists and actors. The next day, this “civil discussion” (in Chaudhary’s words), was reported in newspapers as a heated argument. But the media coverage had a wider effect: it took the matter mainstream. Regular folk were now interested in what had been a tug-of-war behind the scenes.

Another meeting, set up by the HRD ministry at the Sun and Sand Hotel in Mumbai, ended in a bitter impasse, with directors and author-composers yelling and shaking fists. “I realised then that nobody in Bollywood knew how to behave in a meeting,” says Chaudhary, laughing. There were no more meetings.

Over 15 back-room and front-room meetings with a parliamentary standing committee took place, including three with Rahul Gandhi. The recommendations of the committee, published in late November, left author-composers jubilant. Union ministers had been unanimous in their support. “It was too much to ask of politicians to understand the complexities of copyrights,” a music company executive told me.

A writer who was present at the Valentine’s Day meeting says that producers will likely introduce one-rupee contracts to keep their production costs low. So far, he had kept informal channels with producers open, and preferred not to speak about the matter publicly, so that he could play a credible mediator’s role. But now, he feels, things have changed. Reflecting on that day, he says the issue has strained his relationships with producers. It is awkward, he says, to publicly criticise them in the morning and work with them in the afternoon. “That’s why I never went to the press. Regardless of everything, this is a matter of trust. I’m telling you… I saw an elderly gentleman stand up and say ‘Why should I give these technicians [royalties]?’ That’s what we were to him, ‘technicians’. They really do believe this. But I could really see what he meant. We’ve grown up in this world where we hear of royalties. For him, in the world he comes from, it’s unthinkable. That’s why this is not a battle to be won in contracts. This battle has to be won in people’s hearts.”

copyrightfilm industryintellectual property