LMKN Indonesia Music Royalty Management Becomes a Reference in Malaysia

From left to right - Suyud Margono (Commissioner of LMKN Related Rights Holders), Makki Omar Parikesit (Commissioner of LMKN Creators), Jerry Chen (Managing Director of USEA), Suraya Abdullah (Regional Manager, Special Projects  USEA), Bigi Ramadha (Interm General Manager LMKN) while signing a memorandum of understanding or Memorandum of Understanding (MoU), for the development of the digital background music licensing ecosystem. (Dok. USEA)

JAKARTA - The model of music royalty collection management in Indonesia through the National Collective Management Agency (LMKN) has become a reference to be implemented in Malaysia.

The Malaysian Workers' Union (Karyawan), which is a forum for art activists in the neighboring country, through the organization's Annual Member Meeting, stated that it asked the Malaysian Government to take control of the mechanism for collecting and distributing music royalties, as is done in Indonesia through LMKN.

"This resolution proposes that Malaysia follow the model implemented by Indonesia, where similar issues were faced until the Indonesian government finally resolved them by taking over all royalty collection from existing collection bodies," said President of Employees Freddie Fernandez in a statement quoted in Kuala Lumpur, Tuesday.

Freddie said Indonesia has established an agency called the National Collective Management Agency (LMKN) which manages all public performance royalty collection (performing rights) efficiently and transparently.

According to him, this is the right moment for Malaysia to implement something similar, to update the framework for collecting and distributing music royalties in a fair, transparent, and responsible manner. Moreover, he said, Malaysia has an annual public performance royalty collection of almost RM200 million (Rp878 billion).

He emphasized that for years, the Malaysian music industry has faced repeated complaints regarding royalty transparency, high administrative costs, fragmented collection structures, disputes between collective management organizations, and dissatisfaction among artists, composers, lyricists, performers, producers, and record owners, regarding whether royalties are distributed fairly and efficiently.

Therefore, Malaysian art activists propose that the Malaysian Government take the initiative in creating a centralized digital royalty management platform under government leadership as a trusted national backbone for music rights registration, use tracking, royalty calculation, and distribution.

"This proposed platform will serve as a national music rights library and a government-managed royalty distribution system, where every musical work, sound recording, ownership structure of rights, licensing track record, use report, collection amount, and distribution payment are recorded, verified, and can be audited," he explained.

Through this system, said Freddie, every song played can be matched with the right rights holder, and royalties can be calculated and distributed automatically based on verified ownership data and actual use.

"This will minimize overlaps at various levels of administration, as well as provide a clear audit trail for the government, rights holders, users, and authorized stakeholders. This will also, to some extent, control the use of music generated by AI - something that would likely happen if no action were taken," he said again.

According to him, the royalty collection model under the supervision of the government, will also directly support the spirit and direction of the Copyright Guidelines (Collective Management Organization) 2025 policy by strengthening governance, transparency, record keeping, reporting, accountability, and fair royalty distribution.

This is believed to ensure that composers, lyricists, performers, producers, record owners, and other entitled beneficiaries can receive their respective shares in accordance with the verified rights and actual usage data.