Rethinking Statutory Licensing for Music Streaming Platformsin the Digital Age

By Aldrin Kolakkal

I. Introduction

Music streaming has taken over as the main way people in India listen to music. Cheaper mobile data, smartphones, and internet access have brought millions of users online, and platforms like Spotify, Wynk, and Gaana have become central to how we access music. But the copyright laws that govern this space haven’t kept up. 

Section 31D of the Copyright Act, 1957 was added in 2012 to help with licensing for traditional broadcasters like radio and TV. It wasn’t designed with internet streaming in mind. The statutory licensing regime under Section 31D of the Indian Copyright Act was introduced with good intentions, to balance access to content with the rights of copyright holders. But the way it has evolved, especially in the digital space, has raised serious concerns about its fit with the realities of music streaming, artist rights, and market dynamics. 

II. Legislative Intent Behind Section 31D of the Indian Copyright Act, 1957

When Section 31D was introduced through the 2012 amendments, the idea was to allow radio and TV broadcasters to use sound recordings by simply giving prior notice and paying royalty at a fixed rate. It was a way to reduce negotiation friction and ensure wider public access. The Parliamentary Standing Committee that reviewed the Bill made it clear that this was meant for traditional broadcasting, not for online streaming platforms.

III. Constrictive Interpretation of the term “Broadcasting”

Once streaming services like Spotify, Wynk, and Gaana entered the picture, they tried to claim they also qualified for statutory licensing. This led to lawsuits, like Tips v. Wynk[HR1] , where Tips Industries challenged Wynk for using its music catalogue under Section 31D. The Bombay High Court initially restrained Wynk, agreeing that streaming services weren’t covered. But as more streaming platforms pushed the argument, courts began softening their stance.

The issue lies in the language of the provision. Section 31D talks about “broadcasting,” but doesn’t define it tightly enough. This ambiguity has allowed digital services to sneak in under its umbrella, even though streaming isn’t broadcasting in the traditional sense. In the Saregama v. Next Radio case, the Supreme Court briefly touched upon this distinction. Yet, an authoritative judicial pronouncement remains absent Still, no authoritative decision has in settling settled the issue. definitively. Streaming services have argued that excluding them from statutory licensing would harm access and competition. But this ignores the core problem that streaming is not a passive transmission like radio. It’s on demand, user-controlled access to specific content. The Bombay High Court's Division Bench emphasized this distinction, noting that the key factor is not the method of transmission but the user's control over the content.

Interactive streaming involves complex technology, recommendation algorithms, and user data tracking. Grouping it with FM radio under the same legal treatment doesn’t make sense. This functional difference is paramount, on demand services act as a direct substitute for purchasing music, implicating the owner's core economic rights in a way that linear broadcasting does not.

At the heart of the debate is the impact on authors and performers. Under a statutory license, creators have no bargaining power. They can’t negotiate better terms, control how their work is used, or withdraw rights. Platforms can use their music by just depositing royalty rates decided by a board. This might make sense for linear, scheduled broadcasting, but in digital markets, it strips creators of control and fair compensation.

This is especially problematic because statutory licensing was originally seen as a workaround to market failures. If a broadcaster couldn’t strike a deal with a rights holder due to monopolistic behaviour or unreasonable pricing, Section 31D gave them a way to still use the content legally. But with music streaming, the market isn’t failing —it's thriving. Most labels and artists are willing to license their work. So, forcing statutory licensing here seems unnecessary and even harmful.

International law also leans against what India’s current interpretation allows. Treaties like the WIPO Copyright Treaty (WCT) and the WPPT stress the need for prior authorisation, not blanket compulsory licensing. They require member states to protect the right of authors and performers to control how their work is communicated to the public, including through interactive platforms. India is a signatory to both, but its statutory licensing regime risks violating these obligations. Then there’s the moral rights angle. When artists don’t have the ability to withhold permission or shape how their work is used, their personal connection to the music gets diluted. The Supreme Court in IPRS v. Eastern Indian Motion Pictures case emphasized the need to protect authors’ moral rights. Yet Section 31D forces a situation where artists lose meaningful control over usage. Critics argue that the Copyright Board can still set fair rates, so artists aren’t underpaid. But this assumes that rate-setting bodies can fully grasp the value of music across different platforms, user demographics, and technologies. The Warner/Chappell v. Spotify case in Bombay High Court showed how difficult it is to quantify streaming value uniformly. Flat royalty structures just don’t work well in a dynamic digital ecosystem.

The problem worsened with regulatory confusion. In 2016, the DPIIT issued a memo suggesting that internet broadcasting platforms are covered by Section 31D.  This received significant criticism and was subsequently withdrawn was heavily criticised and eventually withdrawn in 2020. But in the meantime, it muddied the waters and gave platforms a legal excuse to press for statutory licensing.

IV. Comparative Legal Perspective on International Models for Digital Licensing

Globally, things are moving in a different direction. In the United States, the pre-2018 system for licensing musical works for streaming was fragmented and inefficient. The solution was the Music Modernization Act, 2018, a landmark statute that created a new blanket compulsory licensing system specifically for interactive streaming services. A central innovation of the MMA was the establishment of the Mechanical Licensing Collective, a non-profit entity designated to administer this blanket license, collecting royalties from digital services and distributing them to songwriters and publishers. Crucially, while the license is compulsory, royalty rates are set by the Copyright Royalty Board (CRB) using a “willing buyer, willing seller” standard, which aims to replicate a fair market rate, thus incorporating market principles into a statutory framework.  

The EU adopted the Directive on Copyright in the Digital Single Market, its primary target was the “value gap”, where large user-upload platforms profited from creative content while avoiding liability. Article 17 of the Directive fundamentally altered this dynamic by clarifying that such platforms perform an act of “communication to the public” and are therefore directly liable for the copyrighted content they host. These platforms are now obligated to make best efforts to obtain licenses from rights holders and, failing that, to demonstrate they have taken effective measures to prevent the availability of infringing content. The EU model focuses less on a statutory license and more on strengthening the negotiating position of rights holders by increasing platform liability.

In India, though, the judiciary hasn’t taken a strong enough stand yet. In IPRS v. ENIL, the Delhi High Court acknowledged the unique nature of streaming but didn’t go so far as to categorically exclude it from Section 31D. This reluctance to draw a clear boundary keeps the door open for misuse.

The real casualty in all this is the music creator. Whether it’s a lyricist, composer, or singer, their work becomes a public utility under Section 31D without their say. The legal system should be empowering them to license their work on their own terms, not stripping them of agency. Artists are often told to accept statutory licensing “for the greater good”, but this ends up benefiting platforms more than creators.

A better approach would be to limit Section 31D strictly to traditional broadcasting, as originally intended. Streaming platforms should be required to negotiate licensing deals or go through collecting societies. This would restore bargaining power to right holders and encourage healthier market practices.

Statutory licensing was meant to correct specific, rare problems—not become the default mode of operation for one of the world’s largest music markets. Its use in streaming is legally shaky, economically unfair, and morally questionable. The longer India clings to this outdated framework, the more it risks stifling its own creative economy. 

V. Conclusion

The Indian legal framework for music licensing is in a state of arrested development. The Bombay High Court's ruling in Tips v. Wynk, while a coherent exercise in statutory construction, has resulted in a functionally problematic status quo that risks impeding the growth of a key sector of India's creative economy. A passive reliance on judicial interpretation of anachronistic laws is a recipe for continued conflict and market failure. The path forward requires proactive and balanced legislative reform. A simple amendment to insert "internet broadcasting" into Section 31D would be a blunt instrument. A more sophisticated solution is necessary. First, Section 31D should be comprehensively amended to explicitly cover digital music services, but this must be coupled with a tiered royalty framework. The law should empower a specialized body and perhaps a reconstituted Commercial Court or a new Copyright Royalty Board modeled on the US CRB—to establish distinct royalty structures for different service types. Non-interactive, radio-style services could be subject to a revenue-based royalty, while interactive, on-demand services require a more complex, hybrid model reflecting a "willing buyer, willing seller" standard. Second, such reform must be accompanied by a strengthening of India's collective management infrastructure. The role of Copyright Societies like the Indian Performing Right Society (IPRS) must be enhanced, with governance made more transparent and accountable. Legislation should mandate these societies to function as central, trusted intermediaries for royalty collection and distribution, akin to the US Mechanical Licensing Collective. 

This would not only streamline licensing for platforms but also directly address the legitimate concerns of authors and composers regarding the equitable and transparent payment of their unwaivable right to royalties. Proactive legislative intervention is essential to compose a future where technological innovation, fair compensation for creators, and broad public access to culture can finally exist in harmony.

References:

1.Parliamentary Standing Comm. on Hum. Res. Dev., 227th Report on the Copyright (Amendment) Bill, 2010, Rajya Sabha (2010).

2. Tips Industries Ltd. v. Wynk Music Ltd., 2019 SCC OnLine Bom 1129.

3. Saregama India Ltd. v. Next Radio Ltd., (2022) 1 SCC 701.

4. Indian Performing Right Soc’y Ltd. v. Eastern Indian Motion Pictures Ass’n, (1977) 2 SCC 820.

5. WIPO Copyright Treaty, Dec. 20, 1996, 36 I.L.M. 65.

6. WIPO Performances and Phonograms Treaty, Dec. 20, 1996, 36 I.L.M. 76.

8.Warner/Chappell Music Ltd. v. Spotify AB, 2019 SCC OnLine Bom 6469.

9. Dep’t for Promotion of Industry & Internal Trade, Office Memo. No. 14-33/2016-CO (June 5, 2016).

10. Music Modernization Act, 17 U.S.C. § 115 (2018).

11. Art. 17, Directive (EU) 2019/790 on Copyright in the Digital Single Market.

12. Indian Performing Right Soc’y Ltd. v. Entertainment Network (India) Ltd., 2021 SCC OnLine Del 144.