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Sound, Rights, and Revenue: Music Copyright in India’s Streaming Economy

 

Music no longer lives on shelves or inside record stores. Today, it exists on servers, playlists, recommendation algorithms, and in the background of cafés, hotels, malls, and smartphones. What once travelled through vinyl and CDs now moves instantly across platforms, borders, and business models.


Behind every streamed song, however, lies copyright—the legal framework that determines who owns music, who earns from it, and who may use it. From global superstars to local restaurants, from streaming platforms to AI developers, copyright has become central to how music is created, distributed, and monetized.


This tension was recently highlighted by Ed Sheeran’s copyright trial over Thinking Out Loud, where a simple four-chord progression became the subject of worldwide debate. The jury ultimately ruled that copyright protects original expression, not common musical structures, reaffirming the boundary between creative influence and unlawful copying.


While that dispute unfolded on a global stage, the same boundary is being actively enforced in India. As streaming platforms expand and courts take a firmer approach to licensing and public performance, music copyright has shifted from a background legal concept to a powerful commercial right. This article examines how India’s copyright framework is responding to the realities of a digital, streaming-driven music economy. 

 

The Anatomy of Music Copyright: What Is Actually Protected?


Before diving into Indian enforcement and digital licensing battles, it is essential to understand a foundational truth: a song is not a single legal object.


Music copyright is layered, and each layer carries separate rights:

1.         Musical composition – melody, harmony, rhythm, and arrangement

2.         Lyrics – protected independently as a literary work

3.         Sound recording – a specific recorded performance of the composition


Each of these can be owned, licensed, and enforced separately. As a result, a single track may involve multiple rights holders - composers, lyricists, publishers, performers, and record labels—each with distinct economic interests.


For users of music—especially streaming platforms and commercial venues—this creates complex licensing obligations. Permission is often required for both the composition (song rights) and the sound recording (master rights). Many copyright disputes arise not from deliberate piracy, but from this structural misalignment.

 

Copyright grants creators’ exclusive rights over their works so that those works can be controlled and commercially exploited. In music, these rights are commonly divided into “song rights” (publishing rights) for compositions and “master rights” for recordings. While both coexist within a single track, they are legally distinct.



Many modern copyright disputes arise when these layers are misaligned, when one set of rights is licensed, and another is not. Conflicts in streaming, sampling, and public performance often trace back to this structural reality.


Before examining how courts and lawmakers intervene, it helps to understand the two most common ways in which musical borrowing leads to legal disputes: sampling and substantial similarity. Both are rooted in artistic practice, but each is treated very differently under copyright law.



Sampling vs. Similarity: Two Paths to Infringement


Most modern music copyright disputes fall into one of two categories: sampling or substantial similarity.


Sampling: Borrowing the Sound Itself


Sampling is the act of taking a portion of an existing sound recording, a drum beat, a vocal line, guitar riff, and incorporating it into a new track. The sample may be looped, sped up, slowed down, or layered with new sounds. Even when short or altered, it is still derived from someone else's recorded performance.


In the early days of hip-hop and electronic music, sampling flourished in a legal grey zone. That changed with the landmark U.S. decision in Bridgeport Music v. Dimension Films, where the court adopted a strict rule: any unauthorized sampling of a sound recording constitutes infringement, no matter how brief.


The message was blunt- “get a license or don’t sample.”While this strengthened rights holders’ control, it also made sampling prohibitively expensive for independent artists and reshaped creative practices across genres.

 

Substantial Similarity: When Songs “Feel” Alike


If sampling is about copying sound itself, substantial similarity concerns something more abstract: whether one song is too close to another in its structure, rhythm, or overall character.


Williams v. Gaye: Protecting the “Feel” of Music

The most controversial example is Williams v. Gaye, the case behind Blurred Lines. The heirs of Marvin Gaye claimed that Robin Thicke and Pharrell Williams had infringed on “Got to Give It Up”. Crucially, the allegation was not that the melody or lyrics were copied. Instead, the claim focused on groove, instrumentation, bass patterns, and overall sonic atmosphere. The jury found infringement, effectively recognizing that a song’s “feel” could fall within copyright protection. The verdict sent shockwaves through the industry. Musicians feared that working within established genres, funk, soul, and disco, could expose them to liability simply for sounding stylistically similar. This case brought copyright to the center of popular culture, forcing artists and audiences alike to confront a difficult question: how much influence is too much?


While these landmark cases emerged from Western courts, copyright is not merely a global doctrine debated in appellate judgments. Its real-world consequences are increasingly visible in national markets, commercial spaces, and everyday business practices. Nowhere is this more apparent than in India, where digital growth, streaming adoption, and judicial enforcement have transformed copyright from a background legal concept into an actively applied economic right.


India’s Shift from Passive to Active Enforcement

India’s music copyright framework is governed by the Copyright Act, 1957, substantially amended in 2012. The Act clearly distinguishes between musical works, literary works (lyrics), and sound recordings, and places strong emphasis on author rights. A distinctive feature of the Indian regime is that composers and lyricists retain the right to receive royalties even after assigning their economic rights, ensuring that creative contributors remain economically connected to their works.


Under this framework, a Public Performance License is mandatory for the use of copyrighted music in public or commercial settings. This requirement applies not only to pre-recorded tracks played in hotels, restaurants, cafés, malls, and clubs, but also to live musical performances, DJ events, weddings, and organized entertainment programs. Licenses for sound recordings are issued by Phonographic Performance Limited (PPL), while rights in the underlying musical and literary works are administered by the Indian Performing Right Society (IPRS). Importantly, the obligation applies even when only a portion of a song is used, underscoring that there is no legal distinction between foreground and background music in commercial spaces.


For decades, copyright enforcement in India’s music industry remained inconsistent. However, recent years have witnessed a marked shift. Courts, rights holders, and licensing bodies have begun treating music copyright as a serious commercial right rather than a procedural formality. This change has been most visible in on-the-ground enforcement across hotels, restaurants, bars, cafés, and event venues, where copyright societies have actively verified whether music is being played without authorization. Where violations were identified, legal notices, injunctions, and court proceedings followed.



Judicial Reinforcement: Music Licensing is No Longer Optional

This transformation has been driven in large part by the courts. In January 2024, the Bombay High Court affirmed that copyright owners and licensing bodies have the exclusive right to license sound recordings before they are publicly played in commercial establishments. The ruling made it clear that restaurants, hotels, bars, and event spaces cannot treat music as a free amenity. There is no legal distinction between foreground and background music when used in a commercial setting. Permission is a legal requirement, and non-compliance carries real consequences.


Licenses are typically administered by:

•           PPL – for sound recordings

•           IPRS – for musical and literary works


Even partial use of a song can trigger liability.


The message was reinforced later that year by the Delhi High Court, which issued a series of injunctions against prominent hospitality brands, including Hyatt, Lemon Tree, Trident, and Leopold Café, for playing copyrighted music without valid licenses. These decisions demonstrated that even well-known and established businesses are not exempt from compliance. Commercial scale or brand reputation does not dilute copyright obligations.


“No Music License, No New Year Party”: A Defining Moment

The courts’ firm approach became especially visible in late 2025, when the Calcutta High Court halted a New Year’s Eve event at Chocolate Hotels due to the venue’s failure to obtain the necessary music licenses. The action was initiated by the Indian Performing Rights Society (IPRS), which represents composers and lyricists. Despite receiving repeated notices, the hotel proceeded with preparations without securing authorization.


The court held that any public performance of copyrighted music, whether through DJs, live bands, karaoke, or even background playlists, requires a license under Sections 13, 14, and 51 of the Copyright Act. As a result, the hotel was restrained from using any copyrighted music until proper permissions were obtained. The ruling sent an unmistakable message: without a license, the music stops.


Across multiple proceedings, courts have consistently restrained restaurant chains and hospitality groups from playing sound recordings without licenses from bodies such as PPL, and have intervened to halt events where organizers failed to obtain copyright clearance. Together, these decisions have established a clear principle in Indian law: background or ambient music in a commercial environment is not exempt from copyright enforcement.


In practical terms, Indian courts have made one point unmistakably clear: when music adds value to a commercial setting, it must be licensed. The era of casual or assumed use of copyrighted music in public spaces is coming to an end.


The Myth of “Background Music”

One of the most persistent misconceptions in music copyright relates to public performance. Many commercial establishments assume that playing music incidentally or at low volume does not trigger legal obligations. Indian courts have consistently rejected this view.


When music is played in a commercial environment, whether through speakers, televisions, or streaming services, it enhances customer experience and contributes indirectly to revenue generation. Such use constitutes communication to the public, regardless of whether customers are charged specifically for the music. A song’s copyright holder has rights to compensation when their music is publicly performed. Without a public performance license, each song you play could be subject to fines.


Since restaurants, cafés, and similar establishments qualify as public places, playing copyrighted music in such venues requires authorization from the copyright holder. Copyright law grants exclusive rights to copyright owners, including the right of public performance, which is triggered when music is played in a space accessible to the public or transmitted through radio, television, or the internet. A public performance license is the legal authorization that allows music users to play recorded or live music that they do not own or have created. Such licenses are generally managed by Performance Rights Organizations (PROs), which issue blanket licenses, monitor music usage, collect license fees, and distribute royalties to songwriters, composers, publishers, performers, and record labels after deducting administrative costs. License fees vary based on factors such as venue size, duration, and frequency of music use, type of establishment, and city category, with different tariff structures applicable under bodies such as IPRS, ISRA, and PPL. Failure to obtain the required licenses may result in financial penalties and interest liabilities.


Indian courts have consistently enforced public performance rights. In Chapter 25 Bar and Restaurant v. The Indian Singers Rights Association (2016), the defendant was held liable for playing music without obtaining the required performers’ rights clearance and was directed to pay damages for infringing public performance and royalty rights. Similarly, in Hawthorns Hotel v. Performing Rights Society (1993), the court held that organizing musical performances for hotel guests without a license constituted infringement, as the public performance was conducted in exchange for commercial benefit. These decisions reinforce the principle that playing music in commercial public spaces requires proper licensing to avoid infringement, emphasizing compliance as a legal necessity for restaurants, bars, cafés, and similar establishments.


Streaming, Statutory Licensing, and Section 31D

India’s explosive growth in smartphone usage and affordable data has made streaming the dominant mode of music consumption. This convergence of legacy control structures and digital demand has placed significant strain on existing copyright mechanisms.


Why Section 31D Doesn’t Save Streaming Platforms

Section 31D of the Indian Copyright Act, 1957 provides a statutory licensing framework that allows broadcasting organizations to use copyrighted literary and musical works, as well as sound recordings, without negotiating individual licenses, provided they give prior notice and pay royalties at rates fixed by the competent authority. Introduced through the 2012 amendment, the provision was intended to facilitate radio and television broadcasting by ensuring public access to works while guaranteeing fair remuneration to rights holders. However, its scope has been contentious in the digital era, as courts have generally distinguished traditional broadcasting from on-demand, interactive streaming services, which allow user choice and control. As a result, Section 31D is widely understood to apply primarily to radio and television broadcasters, with its applicability to online streaming platforms remaining limited unless expressly expanded by legislative action.


Crucially, its scope was intentionally limited. The legislative intent focused on non-interactive broadcasting, where content is disseminated uniformly to the public without user control. This distinction became central as streaming platforms attempted to position themselves within the statutory framework.


Tips v. Wynk: Streaming Is Not Broadcasting

In Tips Industries v. Wynk Music, the Bombay High Court decisively rejected Wynk’s claim that it could use sound recordings under Section 31D. The court emphasized that Wynk’s service was interactive: users could select songs, pause, rewind, download, and replay on demand. Such features, the court held, are fundamentally incompatible with the concept of broadcasting envisioned under Section 31D.


The ruling reaffirmed a core principle: on-demand platforms must negotiate licenses; they cannot rely on statutory shortcuts. The decision reshaped India’s streaming economy and strengthened the bargaining position of rights holders.


AI-Generated Music: The Next Copyright Crisis

If sampling and similarity challenged copyright boundaries, AI-generated music threatens to upend them entirely. So far, copyright disputes have centered on how humans copy music. But what happens when music is created by machines? Imagine a song generated entirely by AI, no composer, no performers, yet unmistakably shaped by decades of existing music. The immediate question is not only who owns it, but what the AI had to copy in order to learn how to create it.


Training AI models requires ingesting massive quantities of copyrighted recordings and compositions. 


This raises unresolved legal questions:

•           Is training AI on copyrighted music infringement?

•           Is it transformative use or unauthorized reproduction?

•           Who owns music created without human authorship?


In both India and the United States, copyright law still rests on human authorship. Works generated autonomously by AI may fall outside protection altogether, creating an “ownership vacuum.” At the same time, rights holders argue that training on copyrighted music without permission undermines licensing markets, while developers maintain that AI learns only abstract patterns.


The law has yet to provide a definitive answer. For now, AI music exists in a legal grey zone, one likely to shape the next generation of copyright battles.


Conclusion: Copyright as the Architecture of the Music Economy

Music copyright today is no longer just a rulebook; it is the economic architecture of the industry. It decides who may use music, who must pay for it, and who ultimately benefits from creativity. From sampling disputes and courtroom battles to restaurant enforcement and the rise of AI, copyright quietly governs how music is owned, shared, and monetized.


As technology reshapes how music is created and consumed, the fundamental challenge remains unchanged: protecting artistic freedom without eroding the rights that sustain it. The future of music copyright will not be forged by legislation alone, but by the continuing negotiation between creators, businesses, courts, and audiences, where innovation meets ownership.

 

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