Tariff Negotiation with Collecting Societies for Music Licensing

Since the government introduced mandatory music royalty payments in commercial public spaces, Tariff Negotiation with Collecting Societies has become an increasingly important consideration for businesses such as restaurants, cafés, hotels, retail stores, entertainment venues, and even transportation services that are now required to pay royalties for music usage through the National Collective Management Organization (LMKN). This policy reinforces:

Government Regulation No. 56 of 2021 on the Management of Song and/or Music Copyright Royalties.

Music played to support business activities — including background music — is now classified as commercial use, which means a license is required and royalty payments must be made through Collective Management Organizations (LMKs) working in coordination with LMKN.

The Issue: Royalty Tariffs May Not Reflect Actual Usage

In practice, many businesses simply accept the licensing tariffs offered without confirming whether the rates actually match how music is being used in their premises.

In reality, factors such as:

• how the music is used

• venue capacity

• frequency of playback

• type of usage (background vs live)

can all affect the royalty amount that should be payable. Without a proper review, businesses may end up paying more than what is actually required.

Tariffs set by collecting societies are not always one-size-fits-all. The applicable structure may vary depending on each business’s music usage profile. This is why Tariff Negotiation with LMKs becomes important — to remain compliant while avoiding unnecessary overpayment.

Tariff Negotiation: Not About Avoiding Obligations, But Managing Licensing Costs

Engaging in negotiation of tariffs with collecting societies does not mean avoiding legal obligations. Instead, it ensures you calculate those obligations correctly from the outset.

Through this process, businesses can:

• review licensing obligations based on actual usage

• clarify the classification of music utilization

• adjust tariff structures proportionately

The goal is to make sure your business pays royalties that genuinely reflect how you use music in your day-to-day operations.

How AMR Can Assist

Through its Negotiation of Tariffs with Collecting Societies service, AMR can assist your business by:

• conducting a legal assessment of your royalty obligations

• reviewing tariff structures proposed by LMKs

• coordinating and negotiating with collecting societies

to help ensure that your licensing structure aligns with your actual commercial use.

For more information on Tariff Negotiation services related to commercial music licensing, please visit amr.co.id.