Music Royalties in Indonesia 2025: What Business Owners Need to Know

In 2025, Indonesian businesses are adapting to stricter rules on music royalties. Whether it is a café playing relaxing background tracks, a retail store creating an energetic atmosphere for shoppers, or a hotel using live bands to entertain guests, music has become an essential part of customer experience. However, with the government and licensing bodies now actively enforcing royalty payments, entrepreneurs face the challenge of complying with the law while keeping their expenses under control.

The good news is that compliance does not have to be expensive. With the right strategy, businesses can respect intellectual property, avoid legal risks, and even turn music into a tool for branding and customer engagement—without overspending.

Understanding the 2025 Music Royalty Policy in Indonesia

The Indonesian music royalty framework requires that any business using music for public or commercial purposes must obtain the appropriate license. This includes background music in shops and restaurants, music in advertisements, or performances in hotels and event venues. The fees collected are distributed to musicians, composers, and copyright holders, ensuring that the creative industry is fairly compensated.

This system mirrors global practices, where intellectual property is treated as an economic asset. For Indonesia, it represents both a legal and cultural commitment to protecting creativity. Businesses that fail to comply risk facing financial penalties, lawsuits, or even reputational damage, which can hurt long-term growth.

Why Compliance Still Matters

At first glance, paying royalties may seem like an unnecessary burden—especially for small and medium businesses already struggling with operating costs. However, compliance brings several advantages that go beyond avoiding punishment:

• Legal security: Businesses can operate without fear of raids, lawsuits, or sudden fines.
• Positive public image: By supporting the rights of musicians, companies show that they value creativity and fairness.
• Customer trust: Modern consumers, especially younger generations, are increasingly loyal to brands that act ethically and responsibly.

In other words, compliance is not just about avoiding controversy. It is also about aligning with customer values and strengthening brand credibility.

Budget-Friendly Strategies for Business Owners

While the requirement to pay royalties is unavoidable, there are many cost-efficient solutions available to entrepreneurs in 2025. By carefully planning their approach, businesses can minimize expenses while staying fully compliant with the law.

1. Explore Royalty-Free and Open-License Music Options

Not all music requires expensive licensing fees. Businesses can use tracks that are released under royalty-free or open licenses, which allow them to play music legally in public spaces without ongoing payments. These tracks are designed to be cost-efficient alternatives, often requiring only a one-time payment or no fee at all. For small cafés, gyms, or boutique shops, this is a practical way to create ambiance without incurring high costs every month.

2. Utilize Subscription-Based Licensing Services

For businesses that prefer access to mainstream or professional-quality tracks, subscription-based licensing is a smart solution. These services provide unlimited access to music libraries for a predictable monthly or yearly fee, which is significantly cheaper than negotiating individual licenses. They also offer peace of mind, since the tracks are already cleared for commercial use.

3. Negotiate Fair and Scalable Agreements

Business owners should not assume that royalty fees are fixed and non-negotiable. Licensing bodies often provide tiered structures based on business size, location, or customer capacity. Small or medium-sized businesses can request adjusted rates, while larger establishments with multiple outlets can negotiate comprehensive packages that reduce overall costs. Taking the initiative to negotiate can lead to substantial savings.

4. Collaborate with Local Musicians

Another cost-effective approach is to work directly with local musicians. Businesses can commission artists to create custom music or invite them for live performances. This strategy often costs less than traditional licensing while providing unique, fresh music that enhances the customer experience. It also helps build stronger ties with the community and positions the business as a supporter of local talent.

5. Form Collective Licensing Arrangements

Joining forces with other businesses is one of the most effective ways to reduce costs. Industry associations, cooperatives, or local business groups can collectively negotiate with licensing agencies, allowing members to pay lower fees than they would individually. This model ensures compliance while distributing the cost fairly across many participants.

6. Use Music Strategically and Efficiently

Music has the strongest impact when used intentionally. Businesses can cut costs by limiting music playback to peak hours or high-traffic periods, rather than running it constantly throughout the day. They can also complement music with other elements—such as interior design, lighting, or scent branding—to create atmosphere without over-relying on audio. This reduces both licensing needs and operational costs.