Tussle over RM30 million unpaid royalties for recording artistes

 

Close to RM30 million in royalties – owed to recording artistes, musicians and performers – is lying idle with two companies authorised to distribute the payments.

Around RM20 million is stuck with the now-defunct consortium Music Rights Malaysia Berhad (MRM) that comprised four licensed collection companies. MRM was closed down by the government earlier this year over complaints of irregularities in the collection and distribution system.

An additional RM9 million in cash and receivables is with Recording Performers Malaysia Berhad (RPM) that has a membership of 1,800 artistes.

The revelation by this column is a further blow to recording artistes who have been brought to their knees by the Covid-19 pandemic.

A further complication is a dispute between two other licensing bodies, Public Performance Malaysia Sdn Bhd (PPM) representing recording companies and an insolvent firm, Performers’ Rights and Interest Society of Malaysia Berhad (Prism).

In 2016, they fought a courtroom battle that centred on copyright ownership in royalty collection, in the first case involving licensing bodies in Malaysia. Prism was ordered to pay RPM close to RM2 million in damages and was wound up upon failure to do so.

PPM is claiming money from the MRM pot for its share of artistes’ fees owed by Prism.

While artistes and the government have resisted the claim by PPM, Prism wants several million ringgit as arrears in staff salaries.

The royalty issue has, embarrassingly, been played for 20 years, and for sheer discord, the music industry fiasco is in a league of its own.

The Malaysian Artistes’ Association (Karyawan), which acts in the interest of the welfare of artistes, performers, and creative workers, is furious that the various parties failed to react to the crisis with dignity, competence, and decorum.

Karyawan president Freddie Fernandez said: “It has dragged on for 20 years because of manipulation and coercion by various parties to maximise their profits at the expense of the artistes.”

Rewind 2000: In response to Malaysia’s international obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights, the Copyright Act was amended to ensure artistes are paid every time one of their recorded songs is played in public.

Before that, only Music Authors Copyright Protection Berhad (MACP), representing composers and publishers of music, and PPM collected royalties following an amendment to the Copyright Act in 1987.

In 2001, Karyawan requested a 50-50 split with PPM as artistes were not getting royalties.

Their case was on the premise that PPM earned an income from the recordings of artistes and that it was an international practice for performers and record companies to share public performance royalties equally.

PPM disagreed and set up Prism Sdn Bhd under former record company head Aziz Bakar to oversee the collection of royalties for artistes.

Matters came to a head when Karyawan confronted PPM over non-payment to artistes.

In an agreement signed around 2004, Prism authorised PPM to collect and administer royalties for its members.

Fernandez said artistes then received a paltry RM200-400 annually, adding “the payments were wrongly based on the number of albums produced by artistes instead of airplay.”

“By convention, songs that are played in public are entitled to royalties although more albums means more money,” he said.

After a few years, PPM terminated the contract with Prism following complaints of lack of accountability and an ineffective distribution mechanism.

With no source of income, Prism ceased operations around 2011.

The complaints against Prism prompted then minister of domestic trade and consumer affairs, Ismail Sabri Yaakob, to introduce licences for all collection organisations.

Enter RPM, set up in 2013 by the Recording Industry of Malaysia (RIM) and its subsidiary PPM, with Sheila Majid as chairman and several other popular artistes as board members.

Suddenly, a new Prism emerged, with Aziz Bakar this time as an advisor, and Anuar Dahlan as chairman and chief executive officer.

The new minister, Hassan Malek, granted Prism Berhad a collection licence as well.

Now, there were four companies collecting royalties for the same music – two firms for artistes and one each for composers and record companies.

Music users like radio stations, hotels and restaurants that had been paying only MACP and PPM were unhappy over having to pay four parties for the same music and complained to the government.

The ministry, then under Hamzah Zainudin, approved the formation of MRM as the sole collection organisation and initiated a new arrangement of sharing royalties among the four players.

MACP would get 50% of the collection, PPM 25% and the balance of 25% split between RPM and Prism.

Music users were happy to pay only one party but RPM and Prism were at odds over how to distribute artistes’ share because of membership issues.

Some artistes were confused and became members of both bodies while others are now having to prove their membership with Prism to RPM.

RPM general manager Maisy Yao said while they were trying to settle the issues, incomplete documentation by artistes was holding up disbursement of payments.

Yao said the distribution process was not “simple and fast”.

On the other hand, PPM lobbied the new government in 2018 to close down MRM.

Dissatisfied with getting only 25% of the collection, PPM sought the old practice of each entity collecting from the same users.

Earlier this year, MRM became history when the government allowed the licensees to revert to the old system of collection.

However, the nagging issue of how to divide the royalty fees in the MRM coffers between RPM and Prism persisted.

In August, the ministry of communications and multimedia took charge of the music industry and quickly moved to resolve the dispute between RPM and Prism.

Minister Saifuddin Abdullah called for a meeting of the three remaining bodies on Sept 10 but RPM was a no-show apparently over Covid-19 fears.

It is odd, as well as depressing, that artistes have been left in the lurch when the dues are their basic right.

In these troubled times when the music industry has been gravely disrupted, the conduct of certain so-called guardians has shown them at their absolute worst. - FMT

 

The views expressed are those of the author and do not necessarily reflect those of MMKtT.