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.