How to help the music industry

The first-ever music policy to address piracy, copyright and other issues has been prepared by Minister for Information Maryam Aurangzeb.

The government plans to submit the policy to the cabinet for approval before implementation. Since the government tenure ends within a week’s time, chances of the policy translating into an effective legal regime look bleak. Moreover, since copyright and other major issues are within the ambit of the Copyright Ordinance, 1962 and other enabling laws, just a mere policy cannot bring major changes as it would require amendments in the Copyrights Ordinance and the Copyright Act.

How much progress can be made on the initiatives taken by the honourable minister would largely depend on the future governments. Nonetheless, the steps taken by the incumbent government are highly commendable. The music industry is not just a source of entertainment; rather it is an industry that can support thousands of lives and is a major source of revenue for the government.

In India, apart from being a major cultural export, the music industry earns a revenue of around $300 million annually. Tencent Music Entertainment (TME), one of the biggest music companies in China is valued at over $40 billion with annual revenues of over a billion dollars. TME employs over 100,000 people.

The following are some key areas where the government can bring procedural, legislative, and judicial reforms to create a self-sustaining, artist-centric and business friendly music industry which can benefit both the artists as well the investors.

The government should be mindful of the fact that a policy tailored to benefit the artist but neglect the investor will only prove to be short-lived. A thriving ecosystem of music requires investment from music companies both locally and globally – which in turn would require creating business friendly opportunities and amendments in law.

In Pakistan, copyright can only be assigned for a period up to ten years as per the prevalent law. Assignment of copyright is basically like sale-purchase of a commodity. This assignment period is restrictive and limits how the parties can set their contractual terms. In many countries, the assignment period is far more than ten years. In India, copyright assignment can be done for an indefinite period and purely depends on the artist. Such a restriction in Pakistan’s copyright laws is obstructing investment in the music industry as global music companies and record labels seek more liberty when entering contracts for investment into music catalogues.

Moreover, administrative changes in the Intellectual Property Organization (IPO) need to be implemented on an urgent basis. At the moment, there is only one copyright registrar in the IPO who is relocated after every few months in Pakistan and thus copyright matters are needlessly delayed. A registrar should be appointed in every major city to fast-track the IPO’s workings.

Along with appointing more registrars, a dedicated music copyright desk can also be established in the major cities of Pakistan where officials well-versed with music-related matters are appointed. Furthermore, to ensure better streamlining, the IPO needs to improve its online registration portal and re-model it similar to the SECP in order to ensure that applications are submitted online with minimum physical visits to the IPO. This will also help the IPO in gathering data of copyright matters in Pakistan which it can release in the form of an annual report accessible to local and international stakeholders.

Pakistani artists struggle with collection of royalties. The Collective Organization for Music Rights in Pakistan (Guarantee) Limited (COMP), is a government sanctioned body supposed to ensure that artists receive their fair share of royalties from the public performance of their music by other parties in Pakistan. However, the COMP is dysfunctional and is not fulfilling its object and purpose.

The COMP needs to be revamped so that it becomes an autonomous and adequately funded body. The money the COMP collects can also be used for other beneficial purposes for the artists. Royalty which is not claimed from the COMP within three years by the concerned artists can be used to create a welfare fund to address the financial worries of seasoned, retired and old musicians.

In the modern age of data-analytics and AI, the music industry as a whole can be incentivized to adopt practices which ensure better results. In this regard, it is important to treat songs just like any other asset and property which can be valued against time. Standard data-related metrics, such as measuring total views across all digital platforms, should be used to evaluate the value of the songs with time, so that artists know their true worth and are able to maximize their profits when selling, licensing, and assigning their songs to other parties.

The protection of online global streaming platforms is highly important. Digital music streaming platforms such as Spotify and YouTube should be given protection from arbitrary government bans as such bans harm the revenues of artists. In this concern, the government of Pakistan also needs to negotiate with digital music streaming platforms for better streaming revenue for Pakistani artists. Currently, Pakistan is ranked among the lowest in terms of revenue per stream for artists.

All the changes recommended above cannot come to fruition, if the dispute resolution mechanism is not revamped. In this regard, specialized music tribunals may be established where the judges are assisted by music experts. The present IP tribunal judges may be given training on music copyrights and in a case where the judge is not adequately trained then a music professional, such as a renowned producer also having relevant knowledge of the law, may be appointed by the court in order to assist the court in hearings.

Yahya Farid Khwaja is the CEO

of and Abdul Rafay Siddiqui is the head of legal at Freebird Music

Entertainment.