Many business owners in Indonesia assume that playing music in their establishment is free if they avoid playing local tracks or stick to instrumental covers. However, royalty obligations apply universally, regardless of genre or language. Even minimal or ambient use, like background music in cafés, falls under public performance rights and requires licensing through the National Collective Management Institute (LMKN).
Another common misunderstanding is that royalties are a form of tax collected by the government. In truth, royalty payments go directly to creators such as songwriters, performers, and composers, not to the state. These payments represent a form of intellectual property recognition and compensation, rather than public revenue.
Some businesses believe that royalty rules only apply to large-scale operations, such as concerts, malls, or ticketed venues. Yet, a legal precedent involving a café chain in Bali highlights that even smaller establishments can face significant penalties for non-compliance. Fears around royalty enforcement have already compelled some businesses to stop playing Indonesian songs altogether.
Clearing up these myths protects businesses from reputational harm and legal risk while supporting creative professionals. Understanding that royalties are creator-focused, that ambient use still counts, and that enforcement reaches beyond major players helps business owners make informed decisions. Ultimately, accurate awareness encourages both compliance and respect for Indonesia’s creative community.
Source: Indonesia’s Businesses Request Exemptions on Royalty Charges for Small Firms and Ambience Music. (2025, August). Noble Properties Asia. | Music royalties for creators, not the state: Law Ministry. (2025, August 7). Antara News. | Indonesia’s music copyright royalty confusion continues. (2025, August 17). Lexology.