 to welcome here at the virtual summit of music in 4.0 is Warnoli. Maybe don't keep music and publishing. Mr. Atul Choracharabali right now with us as he joins us with a very happy face always and when he smiles seems like the music is always going in. Thank you so much. All those wonderful lies that you told about me, I'm very flattered. It's an honor to be here. And yeah, you know, this is an interesting one for me as well because you know, normally we sit on panels and we do keynotes with something that exists. Today, what I'm going to talk about is a flight of fancy. You know, it's a great thing when you're available because you have nothing to do. You know, so you keep sitting and thinking of city things and you say, What can we do? What can we do? And one of the things that always kind of bothered me is the fact that when I joined the music industry, you know, with music labels back in 1987, our industry was supposed to be about a thousand crores. Turn over, right? In those days, we only had cassettes. CDs hadn't come in, LPs were vanishing. Today, we have digital, everyone's listening to music. You know, it's very widespread and there is publishing and there is sync and there is this, that and the other, IPRS, PPL, etc. We are at 1500 crores. Radio which started, FM radio which started about 15 years ago is about 3000 crores already and it runs only on music. So obviously, there is something that holds the music industry back despite which we've been growing and we've been going very impressively because it's normally double digit figures. Of course, the pandemic has changed numbers, etc. But in normal years, the industry and blaze is, you know, the man with the numbers and he's always pointed out how we are growing rapidly. Our digital uptake is absolutely fantastic. In fact, it's so good that I think the last numbers that came out showed that about 80 to 90% of our revenue is sitting in digital and today we all know digital is about streaming, which is great. Which is absolutely fantastic because I personally never thought the adoption would be so fast and so great. The problem to me then is that are we becoming a one horse town? If 80 to 90% of our business is digital, what happens if the digital bubble gets punctured? Where are we? So obviously, there is need to beef up revenues, both from the fact that over the last 30, 34 years we are pretty much stagnant and the other thing being that we can't have all our eggs in one basket. So again, you know, will I be sitting there thinking where is the big opportunity? And to me, the really big opportunity is in public performance. Now, before we start off about that, one thing I must admit and I think Blaise was talking about free markets and you know, free markets are very important. You have to develop a business, but there are also times when the industry itself needs help and that help sometimes can only come from a government and I'll tell you why I'm saying this. If you look at law, we have an income tax law. The income tax law requires you to pay tax on your earnings and to file a return. Even if you're not eligible to pay tax, which you all know is called a zero return. So you're supposed to file as an individual of this country. The law says you're supposed to file a return. You're supposed to pay tax. Great. We understand that. We also have a copyright act and this is a copyright act that the music industry has not created. This is a copyright act that the government has created. That copyright act says that when you utilize music, when anyone plays music, you're utilizing a copyright which requires you to pay for it. And the copyright act in India as globally says that any violation, which means that if you're utilizing music without paying is a criminal offense. So there are two parallels here. There is an income tax act which says that if you don't pay your taxes, it's a criminal offense. There is a copyright act which says that if you don't pay when you use music, it's a criminal offense. Music industry had nothing to do with that. This is what the government says. The difference between the two is that when you don't pay income tax, the income tax department comes after you and says, why haven't you paid tax? And so everyone's received a notice saying that you have 3,000 rupees, no, they ate something, something. So down to the smallest payment, the income tax department is watching. They're looking at your returns. When it comes to music not being paid for, the onus lies on the industry to collect its money. So the government says we have an IPRS. We have recognized that for composers and authors, they will collect the money. There is an ISRA, which is for the performers, they will collect the money. There is supposed to be one for sound recordings so that labels and owners of sound recordings collect the money. Whose onus? The people who are supposed to earn the money. Obviously, I didn't understand this. I'm not a very educated person. So I have to ask people. So I have a guru in our business on copyright. He's our director legal attorney, Hadeep Anand. So I called him and I said, Hadeep, what's the difference? So he explained, he said, listen, on one hand, the government is collecting that money. They are responsible for collecting income tax. It goes directly to them. So they are, let's say, the aggrieved party if you don't pay. However, in the case of music, the money is going to private individuals. It's going to private companies. It's going to artists. It's going to creators, which is not the same as going to the government. So therefore, the onus is on the aggrieved party to take action in that case. Fine. I understand that. But on every transaction that we do in the music business, we pay a GST. The GST ranges in different industries. Currently, we are paying 12% in the music industry. So keep this in mind. We pay GST to the government, which is a direct tax that goes to the government, just as income tax goes to the government. So here again, you know, uneducated people thinking, saying that, okay, so if the government stands to gain, can we join hands with the government and see what we can do about public performance? So now let's come to the public performance collection from the societies. IPRS collects, give and take, about 50 odd crores from public performance. And when I say public performance, I'm referring only to establishments, including hotels, restaurants, shops, shopping malls, etc. These are establishments that play music in the background. So if you go to the IPRS website, it will be called background music. Similarly, ISRA, the Performance Rights Association goes to the same people and collects money on behalf of the performers. PPL, or the sound recording owners, when PPL was a society, it was doing it as a society, today it does it as a copyright owner of sound recordings. PPL goes and collects from the same people for the sound recording. So the money goes to three different people. There is composer and author who need to be paid, there is performer who needs to be paid and there is copyright owner who needs to be paid. And this was the intention of the 2012 copyright amendment. The government for the last 15 years or so has been extremely supportive of the industry. They have got involved at every level down to the micro details of recently the rules came out about how collecting society is needed to disperse the money that they collected. And there are lots of rules, regulations which are necessary for making sure that the monies are going out to the correct people. However, my problem with this is that we are always talking about distribution of money. Why aren't we talking about growing that pile? So as I was saying, IPRS collects about 50 crores a year from public performance. PPL in its best year I think collected about 90 to 100 crores. There is an ISRA collection which is very small and there are non-IPRS, non-PPL players who also collect. So give and take, so 150, about 200 crores is what the industry collects from establishments. How many establishments do they license? They license about 20,000 unique establishments. How many establishments actually play music? We don't know. But what we do know is, okay, so there was a Times of India article that came out on the 18th of May which said that in India we have 53,000 hotels in the organized sector. We have 70 lakh restaurants in the organized sector. 70 lakh restaurants, 53,000 hotels, organized sector which probably means hotel chains, etc. And we have 2.3 crore restaurants in the unorganized sector. What are these 2.3 crores? They are Dhabas. The Dhabas would come in the unorganized sector. If you've ever been to a Dhaba, I doubt there is a Dhaba that doesn't play music. There is a transistor on. These days there will be a mobile phone. Everyone is playing music. The problem is that all these establishments, and you know where I am going with this, right? The size of the pie can be huge. We have 2 problems. One is that people don't want to pay for music. The establishments don't want to pay. We've had cases and cases with the Hotel Federation of India, etc. Restaurant Association of India. So we have a problem where people don't want to pay. But they're breaking the law. Remember that they're breaking the law by playing music and not paying. They're breaking the law. That's why. The second is how do you collect across this vast country with establishments sitting in cities, towns, villages, districts. It's very difficult and one knows what's happening. So you can't expect an IPRS, a PPL, an ISRA, to actually have so much field staff that they can go to these people and collect that money. And this is where I think the government can come in and play a role. So you need to join hands with the government on this. Now, everyone knows that if you have an establishment, there is something called a shop and establishments license that you're supposed to take. This comes from the Ministry of Labor and Employment. In the old days, you had to renew your license, maybe annually or by annually or whatever. These days, it's a one-time license. However, the data is sitting inside the government as to who has a shop and establishments license. So just as a simple thing, if the labor ministry were to share that data with the collecting societies, it would give them a database of people they could go and talk to to collect these money from. That is a great starting point. And as you know, the collecting societies have to file annual reports to the registrar of copyrights. So they detail the people who they have collected money from. We are looking at the list of people who are not licensed. It will be of immense help to the collecting societies if they could look at those two databases, merge them and say, okay, these guys are paying, these guys are not paying. Let's go and collect. However, we'll still have the problem that I mentioned earlier of people not wanting to pay. Where can the government come in on this? The government simply has to tell people who have a shop and establishments license that you need to take an annual music license which has to come up in your returns. So whether it comes up in an income tax return, whether it goes to a labor ministry, wherever it goes. It's not for me to say, but I'm sure if the government, the guys put their heads together with our industry captains, we can work it out. The point is that the government has to have the will to turn around and say, listen, these guys are not asking for anything that is illegal. It's nothing that is below the table. They are only talking about us being able to uphold our own law. Our law says you can't play music without paying for it. We need to introduce one measure, just one measure of an annual music license that needs to be taken. And then we'll see the change in this collection of public performance. My own estimate, humble numbers, not looking at too big is this. This can grow from our current 200 crores to anywhere between two and a half thousand to 10,000 crores, depending on the number of people you get in. Of course, you'll rationalize today a license across everybody probably costs 40,000 rupees annually. That will obviously come down because it's based on the size of the establishment, etc. But if you are able to get this into the bag, just the number of outlets that you're servicing, if it goes from the current about 20,000, pick a number to 10 lakhs. You're straight away talking a jump of at least 10 to 12 X in terms of industry revenue. And a 12% of that going to the government. So the current government earning on GST on public performance should be in the region of about 25 crores. This can jump to 1200 crores. Now this is a simple conversation to simple people like me. The God is in the detail. If there are people sitting here who understand this and who have a connect within the government. Let's open this conversation. I know Blazer sitting and listening. We will have this conversation. Let us see how to engage. If we can engage the labor ministry, the commerce ministry, whoever else needs to be involved. It's a simple matter. It is not difficult if we have the will to do it. There are certain challenges that will come up. But we need to look at things in a positive fashion to say that listen, okay, we understand there are challenges. Of course, there are challenges. This is not simple. It's never simple. I mean, if it was simple to grow from 200 to 10,000 crores, why wouldn't anyone do it? So obviously it's not simple. But if we have the will to do it, there is definitely a way to do it. So again, going back to something Blazer said about the government being involved with the industry, etc. Let's for a minute pause on the government's intent in looking at only distribution of monies in the industry. Let's look at growing the pie. So if you're talking a growth from 200 crores to two and a half thousand or 10,000 crores. That to me is not a silly idea. And that's my case. So World Music Day actually is about free music. Music being played by everybody. It started in France in 1982, right? It's about amateurs getting out onto the streets, being able to perform. There are free gigs everywhere. So I just talked about music not being free and about it being paid for. So it's a slight divergence from what World Music Day is about. But I think music should be everywhere. Music to me because that's what you ask the other people. Music to me is your heartbeat. Without music, there's no heartbeat. You know the heartbeat is giving you music. It is. And if you look at the rhythm, the pulse rate, you'll find a lot of music that is created with that. Anyway, that's a different concept. I love the point you mentioned the contrast of music being free and for every artist. I love the thought as well. Thank you so much for joining us. I wish you great luck in coming future. And happy World Music Day. Thank you so much. Thank you for having me. And let's connect very soon. Thank you so much for your time. Thank you.