Navigating the Streaming Media Landscape: Copyright Licensing and Royalty Distribution in the Digital Age

Gaurav Parashar,

Chanderprabhu Jain College of Higher Studies and School of Law

India’s entertainment sector has grown exponentially in the past few decades. This is the result of the rise of internet era that has completely transformed the entertainment sector along with almost all other sectors such as finance, education, industry, etc. The accessibility to internet has given people a platform to display their skills and make use of their inventiveness. This rise in popularity of online streaming is attributed to the swift advancement of technology and the widespread availability of broadband connectivity. This has led to the introduction of online audio/video streaming platforms such as Netflix, Amazon prime, Disney+ hotstar, Spotify, etc. that provide consumers with access to enormous collection of films, TV series, and original content.

What are streaming services?

Streaming services are online platforms that provide on-demand access to media content such as movies, TV shows, music, and live broadcasts. Users can easily stream content directly from the internet through these platforms without needing to download the content first to access it. These have become popular among the people due to their convenience, vast content libraries, and the ability to watch or listen from multiple devices. Streaming services can be classified into various types depending on their content delivery model and user access. The main types of streaming services based on the business model are:-

1) Free streaming services- The content on these platforms can be accessed by the user without paying any subscription fees. The main model through which these platforms earn money is through advertisements. Some of these platforms are Youtube, Pluto TV, etc.

2) Subscription based streaming services- These services require the user to pay a monthly or annual fee to access the content on their platform. They often offer a vast library of movies, TV shows and original content. Some of these are Netflix, Amazon prime video, etc.

3) Hybrid model based streaming services- These platforms often use a combination of subscription and ad-supported content. Usually, they offer their content that is similar to content on other platforms for free and their exclusive content can be accessed by the user through a subscription. Hulu, Disney+, etc. just to name a few.

The main types of streaming services based on the type of content type are:

1)  Video streaming services- These platforms provide the viewers with a library of variety of content. The content provided on these platforms might be free (revenue generated by the platform through the form of advertisements) or paid. Some examples of these platforms include Netflix, Hulu, etc.

2) Music streaming services- The content on these platforms include albums, single songs, etc. These services too might be free (revenue generated by the platform through the form of advertisements) or paid. Spotify, Apple music can be a few examples.

3)  Live streaming services- Streaming services that offer live broadcasts/streaming of television channels, specific events such as sports or contents, etc. are live streaming services. They can be both free (revenue generated by the platform through the form of advertisements) and paid depending on the platforms the services are offered by. Some can be Twitch, Youtube TV, etc.

What is copyright licensing?

To understand this better, let’s take an example. Nancy is a food content creator. She makes videos on how to cook food. Nancy gets her content registered with the relevant copyright office. Now, one cannot simply use her content off of the internet claiming it to be theirs. And if someone tries to steal her content, she can sue the person for damages. But, one can legally use her content if Nancy allows it. This can be done through a cordial agreement between the two parties. This is known as copyright licensing.

Copyrights are registered by individuals or entities who create a work/hold original rights to the work such as authors, composers, singers, musicians, businesses, etc. The registration for the copyright is done by submitting an application to the relevant copyright office, along with a copy of the work and payment of the required fees. The simple reason why individual entities prefer to get their work copyrighted is because it gives them the exclusive rights to their work which helps them in controlling how their creations are used, reproduced, and distributed. Indian copyright law is governed by Copyright Act, 1957. The process for getting a copyright registered is as follows:-

1) Filing an application- The person applying for the copyright must file an application either physically at the copyright office or through speed/registered post or online through the copyright office’s website. The application must contain all details such as title of the work, name and address of the applicant, etc. And also it must be signed by the applicant and an advocate.

2) Deposition of copies of work- One has to deposit two complete copies of the work along with the application. In case the work is unpublished, only one copy is required.

3) Payment of fees- Once the application and other necessary work is done, the applicant has to pay the fees which can be paid by him either through draft or online. Also, the fees varies depending on the type of work and whether the applicant is an individual or an organization.

4) Diary number issued- Once the application is filed along with the successful payment of fees, a diary number is issued by the copyright office.

5)Handling of objections- If any objections are raised during the examination process, the applicant is notified of the same and is given a chance to respond.

6)Resolving objections- The applicant has to resolve any objections raised by the copyright office within the stipulated time frame.

7)Registration- Once the application is approved, the work is registered, a certificate for the same is issued.

Copyright licensing is the legal agreement between the copyright owner and the other party (the licensee) that allows them to use the copyrighted work under specific conditions mentioned in the agreement. This license allows the licensee to use a copyrighted work, which includes various rights such as reproduction, distribution, and the creation of derivative works. It is just a transfer of interest of copyrighted work, not the transfer of ownership which means that the licensee can use and modify the work according to his requirements without the fear of infringement. According to Indian Copyright Law, copyright licensing is of two types:-

1)  Voluntary license- It is defined in section 30 of the Indian copyright act. This section explains that it is the discretion of the copyright owner (the licensor) to give rights of his work to the licensee or not. This doesn’t liquidate the rights of the copyright owner.

2)  Compulsory license:- It is a statutory license that allows the use of a work without the owner’s prior permission under specific conditions, which is often aimed at ensuring public access to works. This is given in section 31 of the Indian copyright act.

These licenses are further individually divided into two types:-

1) Exclusive license- These licenses grant exclusive rights of the work to the licensee, and no other person and entity can use the work during the licensee period. This restricts even the owner of the work from using the work in the manner specified in the license agreement.

2)  Non-exclusive license- When the copyright owner allows multiple licensees to use the copyrighted work simultaneously, and the owner can also continue to use the work, such licenses are known as non-exclusive licenses.

Different creators copyright license the content they produce to different streaming services to earn money. These streaming services upload this content on their platforms for the users to access and in return earn some money that is distributed among the streaming services and the creators according to the ratio decided by the two in the agreement. Streaming services face several legal challenges during this process. Some of which are:-

1)Complex license agreements- Sometimes, content is owned by several individuals such as producers, directors, etc. which makes the licensing process complicated and thus making it difficult to secure all the necessary rights for the content.

2)Risk of copyright infringement- Some platforms allow users to upload their own content (like Youtube). Users often upload unauthorized copyrighted content which leads to legal disputes.

3)Geographical restrictions- Some licensing agreements impose geographical restrictions on streaming services. This leads to conflict when a user attempts to access contents from regions where the content is not licensed.

4)Disputes related to royalty distribution- Royalty is the payment given by the licensee to the copyright owner in exchange of the license of the copyrighted work. Royalty distribution is the process of allocating and paying royalties to the copyright owners for the use their intellectual works. This is often done on the basis of pre-negotiated agreements. Individuals often argue that they are not fairly compensated for the revenue generated by the streaming services and there is no transparency in the distribution mechanism. These challenges can be countered by the streaming services by improving data accuracy and quality, improving transparency and establishing proper contracts based on the local laws and regulations.

Nowadays, Streaming services are a huge part of the entertainment industry. They face significant legal hurdles in copyright licensing and royalty distribution. Establishing clear regulation and guidelines can help them mitigate disputes and protect the rights of the creators. In the end, I would like to conclude by saying that, streaming services and copyright licensing work hand in hand with each other and if they work together, the difference between the two can be eradicated.