Debate over music royalty system resurfaces

Debate over music royalty system resurfaces

By Johannes Simbolon

JAKARTA (JP): Good news! The song You Came into My Life, which
was co-written by Indonesian songwriters Titiek Puspa and James
F. Sundah and Scorpions members Rudolf Schenker and Klaus Meine,
will be available to international audiences soon.

The song is one of 10 on the German rock band's newest album,
Pure Instinct, which is to be released worldwide on May 20.

"They are already famous in Europe. People there keep asking
about them 'Who are Titiek Puspa and James F. Sundah?'" said
Rudolf Schenker at a recent press conference to promote the new
album at Holiday Inn Crowne Plaza.

Titiek and James signed a contract on royalties with the BMG
publishing company in March in Jakarta.

It is a major landmark for the Indonesian pop music industry.
Firstly, it marks the entrance of Indonesian musicians in the
international market. Many Indonesian musicians have had overseas
success before, like winning international singing contests, but
none can compare with You Came into My Life in terms of reaching
international audiences. The name of Scorpions undeniably counts.

Secondly, the occurrence has also reawakened the debate over
the royalty system in Indonesia's music industry.

You Came into My Life is one of over 40 songs composed by top
composers from Europe, the U.S, and Asia during the Pacific
Harmony in October and November, 1995 in Bali.

The songwriter gathering not only aimed at providing
Indonesian composers the opportunity to meet world-class
composers, to learn from them and compose melodies which have the
potential of becoming international hits with them, but also
promoted the application of royalties in Indonesia.

The melodies composed during the gathering were to be recorded
and released by international firms, with the songwriters
receiving royalties according to the royalty system applied
internationally.

Then the composers in the Bali gathering called on local music
companies to apply the royalty system, otherwise they would turn
their backs on them.

The system followed by Indonesian music companies has long
been dismissed as unfair. It has made recording companies
affluent but left composers, who are the backbone of the
industry, in poverty.

Rights

Two rights are covered in the international system: performing
rights and mechanical rights. A performing right is the right of
a composer to receive a royalty from anyone who performs his or
her song for commercial purposes by singing it or playing a
recording of the song in public. A mechanical right is the right
of a composer to receive royalties from the reproduction of his
or her songs in the form of cassettes, compact discs, laser
discs, mini discs, CD Rom, etc.

In Indonesia, performing rights have been well applied since
the establishment of the Indonesian Creativity Foundation in
1990. The agency serves to collect a "music fee" from music users
and pay composers. In the beginning, few were willing to
acknowledge performing rights and pay a fee to the agency. Now,
it collects a lot of money each year.

Mechanical rights have yet to be applied properly. Thus far,
local music companies prefer the flat-rate system to the royalty
system. The amount of payment is based on deals between recording
companies and composers instead of on the number of cassettes or
discs sold. In most instances, recording companies get their way
in negotiations. Desperate for cash and to have their songs
produced, composers can't help but accept any deal offered by
their recording companies.

The agreement between James, Titiek and BMG illustrates how
mechanical rights work under the royalty system.

James told The Jakarta Post that royalties from his mechanical
rights for Pure Instinct varies from country to country. In
European countries, for example, the royalty is between 6 percent
to 10 percent of the price of each cassette, CD, laser disc, mini
disc and CD Rom sold. In the U.S., the royalty is between 6
percent to 11 percent, and in Asia it is up to 12 percent.

The composers of You Came into My Life will share the
royalties with the composers of the other nine songs on the
album. Thus, You Came into My Life will net only a 10th of the
total royalty. Next, since the song was co-composed by James,
Titiek and the two Scorpions' members, each of them will get one
fourth of the royalty from the song.

How will James and Titiek monitor album sales and collect
their royalties? Their producer, BMG, will do it on their behalf.
The agency will send them the sales results as well as a royalty
every three months. It will charge James and Titiek 30 percent of
the royalty as a service fee.

"Usually, a producer charges up to 50 percent. BMG will charge
only 30 percent this time as a good gesture to Indonesian
musicians. They might find many potential composers who they want
to sign up," said James.

If each cassette cost US$10 and the royalty is 8 percent then
the royalty totals 80 cents, meaning each of the 10 songs will
earn the composers 8 cents. Since You Came into My Life was co-
written by four persons, the royalty for James and Titiek is 2
cents each. After a 30 percent commission for BMG, each of them
will receive 1.4 cents per cassette.

The sum appears small, but if Pure Instinct sells 20 million
copies as previous Scorpions albums have, James and Titiek will
receive a big sum.

An equal royalty payment for all songs is called a pro rata
system. Under the flat-rate system, there is no equal payment.
The amount a composer receives depends on his or her popularity.
A composer who has just had a hit will be offered millions of
rupiah for his next new song, which will then be released in a
composition of lagu jagoan or top songs. The amount little-known
composers are paid can be as little as Rp 50,000 ($21.50) per
song, and their songs will be included on the cassettes or discs
as lagu bandit (literally "bandit song") or supplementary songs.

Reluctance

One plus point in the royalty system is that it gives
composers the assurance that they can make a living from
songwriting. They can seriously pursue their careers and
be earnest about writing good songs. The public can expect the
production of quality songs.

Under the flat-rate system, the career of a songwriter is
marked with uncertainty. A beginner whose song suddenly hits the
charts is unable to reap the benefits of such a hit since the
recording company obtained the rights to the song cheaply. A
composer who has just had a hit will be offered big money by the
companies for any new song, but once the composer has a flop, the
rate of payment will instantly drop. As a result, perturbed by a
lack of income, song writers are often unable to concentrate on
their work and fail to produce good songs. It is no wonder the
Indonesian pop music industry rarely produces quality songs.

Who is to blame? The recording companies, say songwriters.
They say the companies are unwilling to apply the royalty system
for fear that their profits will decrease. In response, recording
companies say the royalty system cannot be applied because not
all musicians like it.

"Under the royalty system, a famous composer would receive the
same amount of royalty as an unknown composer. Are famous
composers in this country ready for that?" Arnel Affandi, general
manager of the Indonesian Recording Industry Association, once
told the Post.

Arnel says the application of the royalty system is also
hindered by the lack of knowledge about royalties on the part of
people working in the local music industry, including composers,
singers and recording company owners. In 1990, he sent a
questionnaire on royalties to 500 musicians and recording
companies.

"As it turned out, only one person knew exactly what a royalty
was. He is singer Acil Bimbo, a law graduate," said Arnel.

Obviously some people, either musicians or recording
industries, are reluctant to apply the royalty system. But, BMG's
offer of a discounted producer's fee to Indonesian songwriters is
a clear message that international music industries are ready to
set foot in Indonesia. Indonesians will thank them if they help
promote local musicians. However, many people fear international
music industries will make contracts with all of the composers
here and gradually gain control over the Indonesian music
business, which is worth a profit of Rp 1 trillion yearly. Under
the royalty system, Indonesian composers and singers would sing
Indonesian songs and earn huge profits.

Thus, there is no choice any longer but to prepare everyone in
the music industry for the royalty system. Otherwise, the local
music industry will lose in the incoming free competition.