Music label scam: Music firms make 2500 Cr. profit but cheat on paying royalties

ED (Enforcement Directorate) officials are investigating top music companies for their role in the ‘music label scam’ for laundering profits. Allegedly, top music companies made thousands of crores in profits but did not share royalties with composers, lyricists.

As per Enforcement Directorate (ED) officials, two top music companies alone earned a profit of Rs 2,500 crore between 2012 and 2017 but did not pay music composers and lyricists half of the amount as legitimate royalty (reports Mirror), which is a violation of the Copyright Act amended in 2012.

“Out of the profit of Rs 2,500 crore, the companies chose not to share the percentage of royalty against songs, in the mandatory 50-50 ratio, with the music composers and lyricists enshrined in amended Copyright Act of 2012,” said an ED official familiar with the investigations.

The government agency have questioned top officials from India’s finest and top music labels – Saregama, T-Series and Sony Music Entertainment India Ltd in connection with the scam that deprived scores of music composers and lyricists of their rightful royalty dues.

The scam involves the Indian Performing Right Society Ltd (IPRS), the copyright society of which music honchos, composers and lyricists are members and part of, and Phonographic Performance Ltd.

The ED decided to look into the Delhi Police case, lodged a few months ago, by singer Shubha Mudgal on the matter.

For a long time, few prominent Industry celebrities have been fighting for the rights of music composers and lyricists, to help them get an equitable share of revenue for their compositions and songs. With the unearthing of this scam, things could probably change for them going ahead.