Trends in Music Royalty Collection in Indonesia

The National Collective Management Institution (LMKN) reported fluctuating music royalty values in Indonesia from 2019-2024.

In 2019, the value was Rp63.79 billion. Two years later, the figure dropped due to the Covid-19 pandemic; specifically, Rp29.16 billion in 2020 and Rp19.86 billion in 2021.

Music royalty collection experienced exponential growth for the following three consecutive years.

In 2022, the value soared by 76.23% to Rp35 billion. A further surge occurred in 2023, increasing by 57.55% to Rp55.15 billion. The latest data for 2024 shows a significant 39.89% increase, reaching Rp77.15 billion.

Royalty Controversy

Recently, Katadata reported that singer Vidi Aldiano was sued by Keenan Nasution, the composer of the song "Nuansa Bening." Vidi was ordered to pay Rp24.5 billion for allegedly performing the song at various concerts and events without Keenan's permission. Agnes Monica experienced a similar situation, ordered to pay Rp1.5 billion in damages after being sued by the composer of "Bilang Saja," Ari Bias, for performing the song without permission.

This royalty controversy has also caused concern among cafes and restaurants about playing commercial music in their establishments. This is also a consequence of the designation of the director of PT. Mitra Bali Sukses, IGASI, the franchise holder of Mie Gacoan in Bali, as a suspect in an alleged copyright infringement case.

Sutrisno Iwantono, the chairman of the Indonesian Hotel and Restaurant Association (PHRI) in DKI Jakarta, confirmed that many parties are worried about playing commercial music.

"Yes, many are worried, like what happened in Bali; they probably saw the news," said Sutrisno when contacted by *Katadata* on Monday (August 4th).

LMKN is the most scrutinized party in this controversy. This is because the institution, established under Law Number 28 of 2014, has the authority to collect royalties from commercial users according to the rates set and ratified by the Decree of the Minister of Law and Human Rights of the Republic of Indonesia.

These royalties are then distributed to creators, copyright holders, and owners of related rights through Collective Management Organizations (CMOs).

Based on the Decree of the Minister of Law and Human Rights No. HKI.2.OT.03.01-02 of 2016, the business sectors subject to royalty fees include:

• Airplanes, buses, trains, and ships

• Concerts

• Shopping centers

• Hotels and hotel facilities

• Radio

• Recreation centers

• Cinemas

• Television broadcasting institutions

• Exhibitions and bazaars

• Telephone ringtones, banks, and offices

• Restaurants, cafés, pubs, bars, bistros, nightclubs, and discotheques

• Seminars and national conferences, karaoke

The amount and calculation of royalty fees vary depending on the type or category of the registered business sector.

For restaurants and cafes, for example, the royalty fee is based on the number of seats, with a royalty fee for Copyright and Related Rights of Rp60,000 per seat, payable annually.

(Read: This is the Problem with Indonesia's Music Royalty System According to Citizens)