Indonesia Implements Mandatory Royalty Payments for Commercial Music Use

New Regulation Affects Various Business Sectors

The Indonesian government has introduced a new requirement for businesses that use music in public spaces for commercial purposes. Through a circular issued by the Directorate General of Intellectual Property, Ministry of Law and Human Rights, businesses such as restaurants, cafes, shopping malls, entertainment venues, and transportation services are now mandated to pay royalties for playing music.

Key Aspects of the New Regulation

1. Scope of Application: The regulation applies to all commercial establishments that play music or songs to support their business operations. This includes:

   • Restaurants and cafes
   • Shopping centers and retail stores
   • Hotels and accommodation services
   • Entertainment venues
   • Transportation services

2. Payment Mechanism: Royalties must be paid through the National Collective Management Organization (LMKN). This organization will be responsible for collecting the royalties and distributing them to the rightful copyright holders and creators.

3. Legal Basis: The new rule is supported by existing copyright laws and regulations in Indonesia. The Directorate General of Intellectual Property has emphasized that this measure is necessary to ensure that creators and copyright holders receive fair compensation for the commercial use of their work.

Implications for Businesses

Businesses affected by this new regulation will need to comply by making the necessary royalty payments. This may involve:

• Registering with LMKN
• Reporting music usage
• Making regular royalty payments

Failure to comply could result in legal consequences. Businesses are advised to familiarize themselves with the specific requirements outlined by LMKN and the Directorate General of Intellectual Property.

Impact on Copyright Protection

This regulation represents a significant step forward in Indonesia's efforts to strengthen copyright protection. By ensuring that creators receive fair compensation for their work, the government aims to encourage continued creativity and innovation in the music industry.

The implementation of this rule also brings Indonesia's practices more in line with international standards regarding intellectual property rights. It demonstrates the government's commitment to creating a more robust framework for protecting creative works.