By Emmanuel Legrand
[This story was initially commissioned by the UK’s
BASCA. Here’s an expanded version of the story published in the winter issue of
the organisation’s magazine.]
China and India have been catching the attention of
the British music community for decades. But while quite a few British artists could claim to be “big in
Japan”, few can pretend to be “big in India” or “big in China”. For how long?
The ambition to crack the world’s two most populated countries in the world
should come a normal career step for any act, since they are extremely
attractive markets.
It is easy to
see why China and India may look like ideal playgrounds for British
songwriters, composers, artists, labels and music publishers: both countries
have an impressive population (1.3 and 1.2 billion inhabitants, respectively),
with a large share of under 25. Despite remnants of poverty, they have booming
economies and a growing middle class counting hundreds of millions of people
with purchasing power and an eagerness to consume; plus they are the two
largest markets in the world for mobile phone usage.
But the
conditions for a thriving music market have not been achieved yet in both
countries - although they offer a lot promise, they certainly have their own
market idiosyncrasies to deal with. On the positive side, both India and China
have made efforts in the past decade to bring their copyright regime in line
with that of other countries.
“Generally
speaking, the Chinese copyright law in itself is adequate enough to build a
sound business, and like in China, India’s Copyright Law in itself is generally
speaking adequate,” says KT Ang, the Singapore-based Regional Director
& Regional Counsel of the International Confederation of Societies of
Authors and Composers (CISAC) for the Asia-Pacific region. But, added KT Ang, in China the problem
stems from the “implementation of the law” that has been “less than desirable,”
while in India “the difficulties are the market practices and interpretations
being made of it by the courts.”
 |
Taste Media's
Safta Jaffery |
For Safta
Jaffery, Managing Director of London-based Taste Media, one of the key issues
in India is the “lack of philosophy of paying royalties and no culture of
respecting copyright”. Jaffery spent the most part of three years, between 2008
and 2010 focusing on the Indian and Chinese markets. He was working on a
project together with ‘Slumdog Millionaire’ score composer A.R. Rahman and an
established music publisher, with the ambition to create a credible publishing
company in India, but the project was stopped because, in Jaffery’s words,
“nobody believed we were going to get paid”.
“I think we were
blindly optimistic,” explains Jaffery, who adds that it is unlikely that the
system would change in the foreseeable future. “It is a system that has been working
for a long time and which benefits all the main players, who are incredibly
powerful and who have no interest at all in changing the way it works,” he
continues. “If you have a good song, film producers will take it, pay a flat
fee and that’s all. Who is going to break this mould?”
 |
Bollywood legend Javed Akhtar
speaking at the World Copyright Summit |
One who has
tried and still does – with some success – is Bollywood legend Javed Akhtar.
The Indian lyricist, poet and screenwriter is the most prominent figure in the
fight to try to get the government and legislators change the copyright regime
in the country. Thanks in part to his efforts, the Indian Parliament is about
to debate and, hopefully adopt, this autumn a new Copyright Act, which will
amend the Copyright Act of 1957. One key amendment in the bill proposed by the government asserts
that authors of underlying works and those to whom they assign their works are
each entitled to an equal share of the royalties received for non-film uses,
including for performing rights.
This will mark a
radical transformation from the previous regime, which was centred on the
“work-for-hire” philosophy and transferred all ownership of works from
composers, lyricists and performers to film producers. In his keynote speech at the World Copyright Summit in June in Brussels, Akhtar noted that even the
greatest composers in the country such as A.R. Rahman did not earn royalties
from the use of their works in India, but ironically did so when their works
were played outside the country.
“Historically,
India’s songwriters have not been able to exploit performing rights,” explains Karen Buse, MD of
International at PRS for Music. “The major change in the new proposed Copyright Act is that
it prohibits composers from waiving all their rights. We believe this is a good
thing.”
For Universal
Music Publishing Group Executive Vice President for International, Andrew
Jenkins, the proposed
changes in the Indian copyright law, introducing a non-cessible performing
right to songwriters will be a game changer. “Songwriters and composers will
not be able to assign all their rights, so this will change the situation
significantly,” he explains. “Indian songwriters will enjoy an ongoing right to
royalties when their songs are used in future. At the moment, there is not much
incentive for [non-Indian] composers to write for Bollywood movies if they have
to give up all their rights.”
Jenkins believes
that the Indian government “is determined to bring India’s copyright practices
in line with the rest of the world; it will create a level playing field for
both local and international songwriters from the world in India.”
Most industry executives agree that India presented opportunities in the music field. “There have been three quite welcomed developments in India in the past 10 years: they have reduced significantly the level of piracy in the country, there is the beginning of a retail structure, and commercial radio is emerging as a sector,” comments Dominic McGonigal, Director of Government Relations at performers’ and record companies’ music licensing organisation PPL.
 |
Deep Emotions's
Achille Forler |
Universal Music
Publishing was until recently the only major publisher operating with a
stand-alone company in India - Mumbai-based Deep Emotions Publishing, a joint
venture initially set up by BMG and a French expat, Achille Forler. Meanwhile,
in September, Sony/ATV announced a joint venture with Sony Music India to
administer and develop the company’s publishing catalogue. “This is good news,”
says Forler, Managing Director of Deep Emotions Publishing. “The more the
players, the better.”
Forler, who has
been working in the music business in India for almost 20 years, has been
focusing, alongside Akhtar, on the status of local collection society, IPRS. For
historical reasons, the society has been controlled by record companies and the
current situation is challenged by Akhtar and a few other authors and composers
who are pushing for changes and more transparency. “Our idea is to simply say
that authors’ societies must be controlled by authors,” says Forler.
 |
PRS for Music's
Karen Buse |
“There are
challenges in certain areas,” PRS’ Buse says, rather diplomatically. For her,
revenues collected by IPRS are growing and progress has been made in many areas
and there are potential benefits for UK songwriters/composers with new
satellite channels that could play international movies. “We are seeing double
digit growth with public performances this year,” she explained.
However, the
level of revenues remains low: PRS for Music PRS regularly receives about
£5,000 per year from China and is expecting £50,000 in 2011, while streams from
India should reach £50-60,000 for 2011. On the flip side, she said, PRS does
collect significant amounts of money that go back to Indian and Chinese
songwriters.
On the question
of performance rights for recordings, PPL’s McGonigal, reports some
progress in India, where revenues from performance rights for recordings grew
from $26.2 million in 2009 to $40.1 million in 2010, according to the IFPI.
“Revenues in India are still low but they are there and they are growing,” says
McGonigal, who was the signatory of the reciprocal agreement between PPL in the
UK and its sister society PPL India in 2006. He attributes most of the growth
to positive developments in the mobile sphere.
 |
Mobilium International's
Ralph Simon |
According to
local data, Indians bought roughly 150 million portable devices,
in 2010. The mobile market reaches over 800 million consumers in India. Ralph Simon, Chief Executive Officer of
Mobilium International, believes that a lot of progress has been made in India
thanks to what he describes as “the mammoth rise of mobile and the delivery of
all kinds of IP and copyrighted content to phones – including audio content
from Bollywood movies”.
Simon notes that
with “the rise of the Indian ‘underground’ music scene, more artists and
writers are opting for their own control and holding all digital rights” but
admits that Copyright laws in India “are vastly outdated and urgently in need
of addressing digital developments of all kinds”.
In addition, the country only opened up its radio
airwaves about a decade ago. However, even though about 250 stations operate in
the country, very little revenues go back to songwriters and publishers in
terms of rights, according to Forler. But despite administrating over 2.7
million works, Deep Emotions receives a mere $40-45,000 per year from IPRS.
“Public performance rights barely exist,” he said. For Indian songwriters, it was not that
there were no performance rights, but they were not getting a penny of it as
they had relinquished their rights to Indian film studios, according to Forler,
who wants the system to change.
Not only do radio stations pay very little right, but
many of them challenge in court the validity of performing rights. To make
matters worse, IPRS and authors recently suffered legal setbacks. “A couple of Indian High Court decisions
that effectively held that when a composer or author agrees to have his musical
work included onto a sound recording, he thereafter loses his exclusive right
of public performance or broadcast to the producer of the sound recording,”
explained CISAC’s KT Ang.
But even is
the situation was to be rectified, western artists would not stand to gain much
as there is a very limited amount of non-local music played by Indian radio
stations. “There is very little pop on Indian radio – it’s mostly Bollywood
music,” confirms Buse.
The same
applies to China, where local repertoire dominates the market and where MCSC,
the Music Copyright Society of China, is in charge of collecting and
distributing royalties. PRS
for Music CEO Robert Ashcroft went recently to China to meet the key players,
including sister society MCSC, and assess the importance of the market.
For Buse, at
best, western music accounts for 10% of the total music played in China, and
PRS could claim 2 to 3% of that amount. “In China, the biggest challenges are
the still rampant piracy and the very low tariffs,” explains Buse. “Up until
last year, broadcasters were not paying performing rights and the new tariff is
so low – 0.2% of their revenues – that it will not generate much revenues.”
CISAC’s KT Ang
confirmed that British songwriters could potentially generate revenues in
China, mostly through covers of songs. “If a UK work is being covered or used in
China, it would be perfectly possible to make money,” he says. “However, it is
important to the writer to have a good representative in China who knows the
market and has the right connections in the industry.”
MCSC was established in 1992, in the wake of the
country’s first Copyright Act, implemented in 1991, which established the
framework for authorship, ownership of works and copyright regulation. The
copyright law was amended in 2001 and the main issue for rights holders has
been the slow pace of its implementation and enforcement. In addition, for Ralph Simon, “There is
still a lot of teething that both countries and their collection societies have
to overcome to be fully cognisant with the digital and mobile age and its new
demands.”
 |
UMPG's
Andrew Jenkins |
UMPG’s Jenkins agrees that, “China is a difficult place to do
business because it does not fit any rules that we are used to working with”.
“But the Chinese government is slowly moving forward to try to make things
easier [for foreign businesses]. We ourselves must adapt to fit in there just
as much as we look for changes in the Chinese market,” he adds.
For all those
who have worked with China, one of the factors to take on board is that the
political system is centralised with decisions made by the ruling Communist Party.
MCSC, for example, is under the supervision and management of the General
Administration of Press and Publication of China (GAPP) and its offshoot, the
National Copyright Administration of China (NCAC).
“Everything goes through the government
and no company eager to do business there wants to damage the relationship with
the government,” says a music industry executive, pointing out to the recent
difficulties of Google in China, which have shown that no matter how big the
company, trading is China can be hazardous.
One industry
executive suggests that the pace of change in China is likely to be slow as the
current status quo benefits local artists, and that the country will open up
when it will also have guarantees that revenues will come from the foreign
exploitation of Chinese repertoire. “They have no advantage in speeding up the
process,” says the executive.
Yet, many
executives also believe that China is a land of opportunities. Stuart Watson,
founder of Singapore-based music company SWAT, has organised several trade
mission to China and India for western companies. “It is very
exciting to be in Asia at the moment and China epitomizes the excitement,” says
Watson.
He notes that many encouraging changes have taken
place in China recently. Until recently, he explained, karaoke bars did not pay
royalties in China, although they were by law supposed to since 2006. It is
estimated that over 3,000 establishment (out of an estimated 100,000 in the
country) will be licensed in 2012 and start paying royalties per booth rather
than as a percentage of their turnover. “This could be huge,” says Watson.
Thanks to a rise
in karaoke and sync revenues, Jenkins reported that UMPG “has seen an
incredible growth in revenues year on year in China and expects the trend to
continue.” Jenkins mentions, for example, a recent $100,000 sync deal based on
a Bee Gees song to be used in an advertising spot. “If a Chinese company wants
to use a certain type of music, they are prepared to pay for that,” he says.
Jenkins also
points to a deal made in July 2011 by major labels and China’s leading online
platform Baidu, for long considered a rogue site. In July 2011,
Baidu announced an agreement with One-Stop China – a joint venture formed by
Universal, Warner, and Sony – to distribution their catalogues and the launch
of its music online platform Baidu Ting. “This is a breakthrough that will monetise key areas of digital
music use in China,” says Jenkins.
Overall, most executives appear to believe that there
is potential in both countries. Forler is buoyant regarding the future of the
music market in India. “Very few countries have such a passion for music like
India, so that’s why I am optimistic,” he says. “We need to fix a few things,
and I do expect that in the near future, it will not be $45,000 a year that I
will get from IPRS, but rather $400 or 500,000!”
SWAT’s Watson advises to adopt a strategy of localised
efforts. For example, he suggests to pitch Indian film producers and try to
work with them, and also advertising agencies, both in China and India. But for
that strategy to work, “you need people on the ground,” he explains. “In Asia
it is all about knowing the right people and establishing long-term relations.”
Mobilium International's Simon considers
that India and China are both “in the middle of a tussle and a transition
between the pre-digital view and the post-digital cross platform era”. However,
he seems more confident about building digital business in China than in India.
He explains, “One can build a sound business [in India], but the waste of
money, time, productivity and energy on non commerce producing administration –
vital as it is – saps a lot from growing young new age companies. In China,
there appears to be an earnest attempt at safeguarding creative rights – as
this is also in accordance with the WTO rules that China has signed up to.”
Universal’s
Jenkins believes that both India and China will become in the next 5-10 years
Top 10 music markets, with India perhaps leading the way. “Undoubtedly these
are the two most exciting and challenging markets we operate in, both of them
with huge potential,” he said. “If you plan to invest in China, you should take
a longer term view. In India, we are already seeing double digit annual growth
in the music business and you might see a more immediate result.”
[Update (08/03/2012): MCSC has signed early march 2012 an agreement with Chinese broadcasters' organisation CRTA that will see domestic and international creators receive remuneration for the use of their works by Chinese public TV and radio channels. In a statement, international trade body CISAC notes that the tariffs paid by broadcasters in China are very low compared to those in other markets but the streams of revenues to songwriters and composers should increase in the long term. However, only a very small portion of these revenues will go to international creators since most of the music played on Chinese airwaves is domestic.]
9 – Lana Del Rey’s ‘Video Games’ is brilliant…
