The soundscape of Indonesia’s public spaces is changing—not because of taste, but regulation. From hotels to buses, business owners are reevaluating their use of music amid mounting pressure to pay royalties. As copyright enforcement intensifies, the debate over fair use and commercial licensing is reshaping how enterprises engage with creative content.
- Royalty Enforcement Intensifies:
The National Collective Management Organization (Lembaga Manajemen Kolektif Nasional, or LMKN) has ramped up efforts to collect music royalties from businesses that use recorded sound—including songs, ambient nature sounds, and sound effects—in commercial settings. - Legal Basis:
LMKN’s authority is grounded in Law No. 28/2014 on Copyright and Government Regulation No. 56/2021 on Royalty Management. These laws mandate that any use of copyrighted recordings in public or commercial spaces requires a license and royalty payment. - Affected Businesses:
Royalty obligations apply to a wide range of venues, including:- Hotels, restaurants, cafés, bars, malls
- Salons, gyms, spas, karaoke lounges
- Cinemas, exhibitions, event organizers
- Public transport (buses, trains, planes, ships)
- Banks, offices, stadiums, parks, and zoos
- Radio and TV broadcasts, concerts (free or paid)
- Streaming Services Not Exempt:
Playing music from platforms like YouTube or Spotify in a business setting still requires a separate license from LMKN. Personal subscriptions do not cover public or commercial use. - Business Response:
Some businesses have stopped playing music altogether, canceled live performances, or attempted to substitute copyrighted music with ambient sounds—only to find that professionally recorded nature sounds are also protected. - Support for SMEs:
LMKN offers reduced royalty rates and potential exemptions for small and medium enterprises (UMKM), aiming to balance copyright protection with business sustainability.
Strategic Insights
Indonesia’s evolving royalty landscape reflects a broader global trend: the formalization of intellectual property rights in everyday commerce. By enforcing royalty payments across diverse business sectors, LMKN is asserting the value of creative works and aligning domestic practices with international copyright norms. This shift has strategic implications for business operations, cultural policy, and the creative economy.
For businesses, the new enforcement regime introduces both compliance challenges and reputational risks. Enterprises that rely on music to enhance customer experience—such as cafés, hotels, and transport operators—must now factor licensing costs into their operational budgets. The decision to eliminate music or live performances may reduce ambiance and customer engagement, potentially impacting competitiveness in service-driven industries.
From a policy perspective, the move strengthens Indonesia’s commitment to protecting intellectual property, a key pillar in attracting foreign investment and fostering innovation. By clarifying the boundaries of commercial use, the government is signaling that creative content is not a free commodity but a licensed asset—one that deserves fair compensation.
However, the rollout also exposes tensions between regulation and practicality. The inclusion of ambient nature sounds and sound effects within royalty obligations has sparked debate over the scope of copyright protection. For small businesses, especially in tourism and hospitality, the cost of compliance may feel disproportionate to the perceived benefit—raising questions about enforcement equity and cultural accessibility.
In the long term, Indonesia’s royalty framework could catalyze growth in local licensing services, royalty-free music production, and creative partnerships. It may also encourage businesses to explore alternative soundscapes, invest in original content, or collaborate directly with artists. As the system matures, transparency, education, and tiered pricing will be essential to ensure that copyright protection supports—not stifles—economic and cultural vitality.