Understanding Royalties in the Music Industry: From Definition to Dispute

Background

Recent disputes concerning royalties are part of copyright disputes. Royalties are collected and distributed by the Collective Management Institution (Lembaga Manajemen Kolektif / “LMK”), a non-profit legal entity authorized by creators, owners of copyrights and/or owners of related rights to manage their
economic rights.

One of the recent disputes was between Sentra Lisensi Musik Indonesia and PT Mitra Bali Sukses (the manager of Mie Gacoan outlets in Bali and outside Java, “PT MBS”), in which PT MBS was reported
to the police in Bali for playing songs at several outlets of Mie Gacoan without paying any royalties. The dispute was eventually resolved amicably, with PT MBS paying royalties in the amount of Rp2.2 billion.

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