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Govt sets music royalty rates

Ni Nyoman Wira
Ni Nyoman Wira

The Jakarta Post

Jakarta  /  Mon, October 17, 2016  /  01:34 pm
Govt sets music royalty rates

Published in May, the government established royalty tariffs for 12 commercial sectors. (Shutterstock/File)

The government through the National Collective Management Agency (LMKN) has set the royalty rates for music played for commercial purposes.

As quoted by, the director for copyrights and industrial design from the Law and Human Rights Ministry’s directorate general of intellectual property, Erni Widhyastari, said the tariff had actually become effective Jan. 1 last year and would run until Dec. 21, 2017. Following Law No. 28/2014, Erni added that the LMKN had the authority to set the rates.

Published in May, the government established royalty tariffs for 12 commercial sectors. The first was for exhibitions and bazaars where the valid rate was a lump sum of Rp 1.5 million (US$114) per day. Second, for music concerts with ticketing systems, the royalty would be 2 percent of gross ticket sales, plus 1 percent of any free tickets given out. Meanwhile, for concerts of free admission, 2 percent would come from music production fees. Also, royalties for music played at banks and offices would be Rp 500,000 per day.

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As for cafes, restaurants, pubs, bars, bistros, and night clubs, the royalties differed. The rate for restaurants and cafés depended on the amount of chairs, while the royalty for both the creator and affiliates would be Rp 60,000 per chair per year. On the other hand, for pubs, bars and bistros, a venue’s area would determine the rate. Creators would gain Rp 180,000 per square meter per year, while affiliates would receive Rp 60,000. Night clubs followed the same calculation with Rp 250,000 per square meter per year for creators and for affiliates Rp 180,000. Lastly, the royalty rate from karaoke venues depended on type and started from Rp 20,000 to 300,000.

The royalty rate for karaoke venues has caused protests, especially from the legal director of Inul Vista Herman Kemala, saying “the royalty doesn’t take into account entrepreneurs”. Also, he believes that the rate is overly expensive given the usual customers of karaoke venues, who often come from the younger demographic.

On the other hand, musician and commissioner of the LMKN Ebiet G. Ade, said the royalty rate was based on sound reasoning, which included international standards, internal recommendations from the LMKN and suggestions from users. (asw)