The issue of music and song royalties in Indonesia has recently sparked heated debate. Questions of transparency, fairness, and collection mechanisms have raised concerns among businesses, musicians, and the public. Many business owners are unsure whether playing songs in restaurants, cafés, or even private events constitutes a legal violation. At the same time, songwriters demand fair compensation for the widespread commercial use of their works.
This debate intensified after several viral cases involving substantial royalty claims, leaving businesses wondering: which venues are legally required to pay royalties?
Venues and Activities Required to Pay Music Royalties
In practice, music is no longer just background entertainment. It has become an integral part of business strategy, shaping atmosphere, attracting customers, and strengthening brand identity. However, when music is used commercially, Indonesian law imposes royalty obligations.
Article 3 paragraph 1 and paragraph 2 of Government Regulation No. 56 of 2021 on the Management of Royalties for Songs and/or Music (PP 56/2021) stipulates that any commercial use of songs or music in public services requires royalty payments through the National Collective Management Organization (LMKN).
The regulation specifies a list of venues and activities subject to royalties, including:
- Commercial seminars and conferences
- Restaurants, cafés, pubs, bars, bistros, nightclubs, and discotheques
- Concerts
- Airplanes, buses, trains, and ships
- Exhibitions and bazaars
- Cinemas
- Telephone ringtones and on-hold music
- Banks and offices
- Shopping centers
- Recreational centers
- Television and radio broadcasters
- Hotels, hotel rooms, and hotel facilities
- Karaoke
Even seemingly minor uses, such as on-hold music for corporate telephone systems or background tracks in retail stores, fall under royalty obligations if tied to commercial purposes.
The Fine Line Between Commercial and Private Use
The law distinguishes between private and commercial music use. If music is used to create ambiance in a restaurant, enhance customer comfort in shopping centers, or support presentations at paid seminars, it becomes a commercial act requiring royalties.
By contrast, personal use—such as playing music at home, family celebrations, or private gatherings—does not trigger royalty obligations. Recognizing this distinction is essential for business owners to avoid unexpected disputes or financial liabilities.
Also read: Legal Framework for Resolving Copyright Disputes in Indonesia
Exceptions Under Indonesian Copyright Law
While the royalty rules are strict, Law No. 28/2014 on Copyright (UU Hak Cipta) provides exceptions classified as fair use. Article 44 paragraph 1 of the law exempts uses for:
- Education, research, and scientific writing
- Security, governance, legislative, and judicial purposes
- Educational lectures and scientific knowledge sharing
- Non-commercial performances, provided they do not harm the creator’s legitimate interests.
Examples include family events, birthday parties, or non-commercial social gatherings. Professor Ahmad M. Ramli, one of the drafters of the Copyright Law, emphasized that singing at home or family functions actually promotes a songwriter’s work rather than infringing upon it..
In addition, works in the public domain, such as expired copyrights or official versions of national anthems, may be freely used without royalty obligations.
Also read: Patent Licensing in Indonesia: How to Monetize Your Innovation Legally and Effectively
Building a Fair and Sustainable Music Ecosystem
The ongoing debates over music royalties highlight a need for clarity and compliance. For businesses, understanding these obligations is not just about avoiding legal risks but also about supporting fair compensation for creators. Licensed use of music in commercial spaces reflects respect for intellectual property rights and contributes to a sustainable creative industry.
For the public, there is no need to worry, personal enjoyment of music remains protected. But for businesses, using music responsibly demonstrates commitment to both ethical business practices and cultural appreciation.***
Also read: Why Patent Protection Is Crucial for Business Growth in Indonesia
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Regulation:
- Peraturan Pemerintah Nomor 56 Tahun 2021 tentang Pengelolaan Royalti Hak Cipta Lagu dan/atau Musik (“PP 56/2021”).
- Undang-Undang Nomor 28 Tahun 2014 tentang Hak Cipta (“UU HC”).
References:
- Jenis Lagu yang Bebas Royalti Menurut UU Hak Cipta, Ini Daftarnya. Kompas.com. (Diakses pada 1 September 2025 pukul 15.02 WIB).