In the digital era and fast-growing creative economy, intellectual creations have evolved from mere artistic expressions into valuable assets with measurable economic potential. Music, writing, graphic design, photography, videos, software, and even social media content are now evaluated not only for their aesthetic or functional value but also for their commercial viability.
Digital platforms, creative marketplaces, and social media have enabled creators to reach global audiences and transform their creativity into tangible income streams. However, many creators still lack a clear understanding of how their works can be managed as economic assets. Copyright is often perceived solely as a means of legal protection against piracy or plagiarism, whereas it also serves as the legal foundation for monetisation. Without proper management, creative works risk being exploited without consent or losing their commercial value.
Understanding Economic Rights: The Financial Core of Copyright
Copyright consists of two main components: moral rights and economic rights. Moral rights relate to authorship and the integrity of the work, while economic rights grant creators the legal authority to derive financial benefits from their creations.
Article 8 of Law No. 28/2014 on Copyright (the “Copyright Law”) provides that:
“Economic rights are the exclusive rights of the Creator or Copyright Holder to obtain economic benefits from their creation.”
This establishes a creator’s exclusive entitlement to profit from the use or reproduction of their work. Any third party wishing to use, reproduce, or distribute a work must first obtain permission from the rights holder and provide compensation, typically in the form of royalties or licensing fees.
Article 9 of the same law elaborates on the scope of these rights, which include the right to::
- Publish;
- Reproduce;
- Translate;
- Adapt, arrange, or transform;
- Distribute;
- Perform;
- Communicate or broadcast; and
- Rent out the work.
These provisions mean that creators can earn revenue from various commercial uses. such as licensing translations, performance rights, or digital streaming, throughout the copyright protection period.
Licensing and Royalties: The Legal Instruments of Monetisation
Once creators understand their economic rights, the next step is to commercialise their works through licensing and royalties. These mechanisms allow creators to earn income lawfully without permanently transferring ownership of their works.
- Licensing: Granting Permission Without Losing Ownership
A licence is a written agreement in which a copyright holder grants another party permission to use the work for specific purposes, within a defined scope and duration. For example, a musician may license a song to a film production company, or an author may license a book to a publisher.
Article 80 paragraph 1 of the Copyright Law provides that:
“The Copyright Holder may grant a licence to another party under a written agreement to perform any act referred to in Article 9 paragraph 1.”
Licensing agreements must comply with general contract law as stipulated in Article 1320 of the Indonesian Civil Code, requiring mutual consent, legal capacity, a defined object, and a lawful cause.
Moreover, Article 82 of the Copyright Law prohibits licence agreements from:
- harming Indonesia’s economic interests;
- violating statutory provisions; or
- transferring all rights of the creator to another party.
Through this system, the creator retains ownership while allowing lawful commercial use of the work under agreed terms.
- Royalties: The Financial Reward for Creative Work
Royalties are financial payments made to creators or rights holders for the use of their works. These can be calculated as a percentage of revenue (e.g., from sales, streaming, or advertising) or as a fixed amount agreed upon in advance.
In Indonesia, royalty collection and distribution are managed by Collective Management Organisations (Lembaga Manajemen Kolektif or LMK). These institutions ensure that creators receive fair compensation from commercial users such as broadcasters, event organisers, and digital platforms.
Under Article 87 paragraph 2 of the Copyright Law, LMKs are mandated to operate transparently and fairly, collecting royalties, distributing them according to usage data, and issuing periodic reports to their members.
A major milestone in Indonesia’s royalty governance was the issuance of Government Regulation No. 56 of 2021 on the Management of Royalties for Songs and/or Music. This regulation introduced a One Gate Policy and a digital royalty system known as INSPIRATION, ensuring transparency and equitable distribution to rights holders nationwide.
Also read: Understanding Music and Song Royalty Obligations in Public Spaces in Indonesia
Copyright as a Sustainable Economic Asset
Licensing and royalties are more than just legal safeguards—they are strategic business tools that allow creators to build long-term income streams while retaining control of their intellectual property.
With proper legal agreements and collective management, creative works can generate passive income for years after publication. In Indonesia’s evolving creative economy, understanding copyright not only protects creators but also empowers them to participate meaningfully in the global creative marketplace.***
Also read: Legal Framework for Resolving Copyright Disputes in Indonesia
Don’t Let Your Creative Work Lose Its Value, Maximise Its Economic Potential
Consult SIP-R Consultant today to explore how you can legally commercialise and monetise your copyrighted works through strategic licensing and royalty arrangements!
Daftar Hukum:
- Undang-Undang Nomor 28 Tahun 2014 tentang Hak Cipta (“UU HC”).
- Kitab Undang-Undang Hukum Perdata (“KUHPerdata”).
- Peraturan Pemerintah Nomor 56 Tahun 2021 tentang Pengelolaan Royalti Hak Cipta Lagu dan/atau Musik (“PP 56/2021”).
Referensi:
- Haryawan, A., & Akasih, P. Y. D. (2016). Perjanjian Lisensi Hak Cipta di Indonesia. Business Law Review, 1(November), 32–37. (Diakses pada 14 Oktober 2025 pukul 09.14 WIB).
- Adela, P., & Isradjuningtias, A. C. (2022). Perlindungan Hukum Terhadap Pemegang Hak Cipta Musik Berdasarkan Peraturan Pemerintah Nomor 56 Tahun 2021 Tentang Pengelolaan Royalti Hak Cipta Lagu dan Musik. Jurnal Kewarganegaraan, 6(3), 1–10. (Diakses pada 14 Oktober 2025 pukul 09.29 WIB).
- Asihatka, P. T. M. R. (2024). Lisensi Royalti Penggunaan Hak Cipta Lagu untuk Kepentingan yang Bersifat Komersial. BORNEO Law Review, 8 (2)(1100), 113–126. (Diakses pada 14 Oktober 2025 pukul 09.43 WIB).
- LMKN Luncurkan Sistem Pembayaran Royalti Digital “Inspiration”. Lembaga Manajemen Kolektif Nasional. (Diakses pada 14 Oktober 2025 pukul 10.24 WIB).