Indonesia clarifies music royalty obligations in commercial public spaces

Introduction

Before the end of the year 2025, the Directorate General of Intellectual Property, Ministry of Law, issued a Circular Letter No.HKI-92.KI.01.04 Year 2025 (Letter).  The Letter aims to clarity:

1. the obligation to pay royalties for the use of songs and music in commercial public spaces; and
2. the protection of economic rights of authors and related rights holders.

This Letter strengthens the implementation of Government Regulation No.56 of 2021 (GR 56/2021), which already regulates the management of music and song royalties in Indonesia.  The guidelines align with the Minister of Law Regulation No.27 of 2025 (MoL 27/2025), which outlines the role of the National Collective Management Organisation (Lembaga Manajemen Kolektif Nasional, LMKN) as the central mechanism for royalty collection and distribution

Under the framework, LMKN works with Collective Management Organisations (Lembaga Manajemen Kolektif, LMK), to distribute royalty payments to authors and/or rights holders.

Commercial use of music

In addition to strengthening the distribution of music and song royalties, the Letter also reaffirms that music and songs used to support business activities, whether in analogue or digital form, are classified as commercial use under Indonesian copyright regime as regulated under GR 56/2021 jo. MoL 27/2025.  This includes music played in:

The Letter emphasises that the obligation to pay royalties for the use of songs and/or music in commercial public services rests with the event organiser or the owner of the business premises. Accordingly, such royalties must be paid exclusively to the LMKN, which they will subsequently distribute the collected royalties to the relevant LMK for authors and related rights, for further distribution to the respective authorised rights holders.

Any royalty payment made to parties other than the LMKN or not made through the mechanism stipulated by the LMKN, shall not extinguish the payer’s obligations.

Royalty tariff

The Letter reaffirms that the applicable royalty tariff for the commercial use of songs and/or music are still determined by the following Minister of Law (previously Minister of Law and Human Rights) decree:

1. Minister of Law and Human Rights Decree No.HKI.2.OT.03.01-02 of 2016 regarding the Approval of Royalty Tariffs for Users Conducting Commercial Utilisation of Musical and Song Works and/or Related Rights Products.

This decree serves as the primary basis for determining royalty tariffs applicable to various forms of commercial use of music and songs.

2. Minister of Law and Human Rights Decree No.HKI.2.OT.03.01-03 of 2016 regarding the Approval of the Refinement and Extension of the Validity Period of Royalty Tariffs for Singing Houses (Karaoke).

This decree specifically governs royalty tariffs applicable to karaoke businesses.

Supervision and enforcement of legal sanctions

The Directorate General of Intellectual Property (DGIP), together with a supervisory team established by the Minister of Law, will actively monitor and evaluate compliance with royalty payment obligations, including assessing whether the commercial use of songs and/or music constitutes copyright infringement.

As long as users have properly fulfilled their royalty payment obligations through the LMKN, such use will not be considered an infringement. However, users who commercially utilise songs and/or music in commercial public services without complying with the applicable royalty payment requirements, may be subject to legal enforcement actions in accordance with the prevailing laws and regulations.

Conclusion

While the Letter provides further clarification on royalty payment obligations and the applicable payment mechanism through LMKN, the supervision and enforcement framework still requires further analysis.

In particular, the position that the commercial use of songs and/or music will not be considered an infringement once royalty payments have been made raises interpretative questions when viewed against the broader concepts of moral rights and economic rights of authors and related rights holders.

Under the Indonesian copyright regime, the assessment of whether a use is fair or lawful is not solely determined by the fulfilment of payment obligations, but also by considerations relating to the scope, manner, and reasonableness of the use from the perspective of the rights holders.

Accordingly, further regulatory guidance or enforcement practice will be required to ensure that the supervision mechanism remains aligned with the fundamental protection of authors’ and related rights holders’ interests.