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The fight around the launch of Spotify in India could change Indian copyright law and shape the way streaming services and labels interact around the world.
Earlier today, Bloomberg reported that Warner Music Group had asked an Indian court to prevent Spotify from being able to broadcast music from its catalog on the streaming service. continued. Spotify must be launched in India, even though it did not obtain a license for the Warner catalog. But, according to Indian law, he might be able to use the music from Warner's publishing division, Warner / Chappell Music, anyway. At the heart of this lawsuit: a 2016 reinterpretation of a 2012 amendment to a 1957 law used by Spotify in 2019 as a means of pressure against Warner as part of a global struggle to obtaining a license.
Spotify and Warner were involved in licensing discussions but could not come. to terms. According to Spotify, Warner "revoked a previously agreed publishing license for reasons quite foreign to the launch of Spotify in India." Because Warner owns a tiny percentage of many songs, Spotify says it simply can not be launched in India without agreement. As a result, Spotify has resorted to a controversial provision in the Indian Copyright Act that "broadcasters" may obtain a license for copyrighted works even if the copyright owner copyright refuses the use.
Warner asked India to block this claim, saying that Spotify was taking advantage of a law intended for traditional broadcasters – radio and television – and not for streaming on demand. "After months of negotiations," says Warner, "Spotify has suddenly changed course and falsely claimed a legal license for the music publishing rights of our songwriters in India. We had no choice but to ask an Indian court for an injunction to prevent this. Our goal is to reach an agreement that works for everyone. We hope that it is only a retarder in the development of our long and successful global partnership. "
In the filing of the legal license by Spotify (see below), it is written:" WCM still has to provide us with a justification Reasonably explaining why it refuses to grant Spotify a license for Works in India This is particularly striking since we believe that WCM has licensed various other services that allow it to use Works in India. absence of any reasonable justification, we conclude that WCM's intention is to prevent our entry into the Indian market, to prevent Indian users from accessing one of the main music services to the world and cause irreparable harm to Spotify. "
from 1957 has been changed six times in total, but the part that relates to Warner's grievance with Spotify begins with a change pbaded in 2012. This change occurred during the addition of the controversial article 31D, which extends the compulsory license for broadcasters of works protected by copyright. [19659008] Of all the things that have changed in Indian copyright law over the years, there is a part of it that has not changed – the definition of "broadcasting ". It is the same thing today as at the time of the adoption of the law in 1957. defined by "communication to the public". In 2016, the Indian Copyright Office issued a memorandum expanding the definition of "broadcasting" in 31D, stating that "the provisions of 31D is not limited to broadcasting organizations but covers also broadcasters on the Internet. This expanded interpretation is what Spotify relies on to access Warner's catalog – and likely to leverage Warner back to the bargaining table.
The possibility that streaming services use Indian copyright law as a means of defense against labels does not constitute a total shock, but is the subject of an international controversy. Kwee Tiang Ang, regional director of the International Federation of the Phonographic Industry for the Asia-Pacific region, said he feared that the 31D would be used in this way last year, stating: "If India continues to apply the interpretation of Section 31D, it would not meet its obligations. under international treaties. IFPI is pleased to work with the Government of India to address this issue and ensure that interactive online transmissions are not subject to a compulsory license. "
Aside from the legal fight, Warner would have significant consequences on Warner's earnings. Traditional voluntary agreements between broadcasters and labels may contain terms that go well beyond the amount paid per stream. The agreement between Sony and Spotify, for example, also included a reduction in advertising revenue and up to $ 9 million in additional advertising spots. If Spotify is able to bypbad a direct deal with Warner in India, Warner potentially loses the gap, not just on cash flow payments, but on a multitude of alternative revenue sources. And these other sources of revenue are a big problem in emerging markets such as India.
Most Indians get their music for free and those who pay do not pay much. For example, an Apple Music subscription in India costs 120 rupees, or $ 1.69, compared to $ 9.99 per month in the United States. It's likely that Spotify's ad-free price will be about the same brand and that his main income in India will not come from subscriptions, but from advertising and telecommunications subsidies, money that Warner can not Spotify Indian courts.
It is unclear why Warner and Spotify have so far not been able to reach an agreement – Warner has agreements with other streaming services in India, such as the broadcast service of continuous music JioSaavn. It seems that Warner knows that Spotify must launch in India to develop and uses its power to block this launch in order to extract other concessions. What will happen next could change the way artists, labels and streaming services work in India for years to come.
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