As the government enforces copyright law, businesses face new costs and creators demand justice—who truly benefits?

Indonesia’s enforcement of music royalties in cafés and restaurants has sparked national uproar. Backed by copyright law, the government demands royalties for any publicly played music—even from Spotify or YouTube—forcing small businesses to pay annual fees. While artists call it justice, others call it overreach. Now, all eyes are on Indonesia as it navigates the future of streaming, creativity, and entrepreneurship.

Indonesia’s Streaming Showdown: When Music Becomes a Legal Minefield

Indonesia’s vibrant café culture and entertainment scene is now caught in a legal storm. Small coffee shops and trendy restaurants across the archipelago have been thrust into a national debate as copyright laws clamp down on background music—even if streamed via Spotify or YouTube.

At the heart of the issue is Undang-Undang Nomor 28 Tahun 2014 on Copyright, reinforced by regulations in 2021, which mandates royalty payments for any public performance of music, regardless of the platform it originates from. This includes paid digital streaming services. Musicians, policymakers, and entrepreneurs are locked in a standoff, and the outcome could shape how Southeast Asia balances intellectual property rights with commercial survival. With officials scrambling for a compromise, the eyes of the region are fixed on Indonesia—will it set a progressive blueprint, or become a cautionary tale?

The Law’s Grip: Why Even a Streamed Song Costs You

The controversy erupted in early August 2025, when business owners were jolted by a stark revelation: playing any music—be it a pop anthem, a jazz instrumental, or even ambient rain sounds—over café speakers requires not only a Spotify or YouTube Premium subscription, but also the payment of separate annual royalties to copyright collectives. Under current law, for every seat in a café or restaurant, the business owes Rp60,000 to the songwriter and another Rp60,000 to the related rights holder. That means a small 20-seat café must pay Rp2,400,000 per year (approximately S$199.20), while a larger 100-seat establishment is liable for Rp12,000,000 annually (around S$996.00).

The National Collective Management Organization (LMKN) has dismissed concerns, likening the fees to the cost of “a few cups of premium coffee.” But business owners disagree. Many question whether it’s fair to charge independent cafés the same as nationwide franchises. Even more confusingly, LMKN Chairman Dharma Oratmangun clarified that no sound is exempt—not even commercially produced recordings of birds or rain. “If you play a recording of birds, the producer owns exclusive rights. Royalty must be paid,” he insisted.

Royalty rates have been officially regulated under the Decree of the Minister of Law and Human Rights Number HKI.02/2016. For culinary businesses that feature music, the following rates apply:

Restaurants and cafés
– Royalty for copyright holders: Rp60,000 per seat/year (approx. S$4.98)
– Royalty for related rights holders: Rp60,000 per seat/year (approx. S$4.98)

Pubs, Bars, and Bistros
– Royalty for copyright holders: Rp180,000 per m²/year (approx. S$14.94)
– Royalty for related rights holders: Rp180,000 per m²/year (approx. S$14.94)

Discotheques and Nightclubs
– Royalty for copyright holders: Rp250,000 per m²/year (approx. S$20.75)
– Royalty for related rights holders: Rp180,000 per m²/year (approx. S$14.94)

Payment must be made at least once a year and can be processed online through the official LMKN website. These rates apply to all forms of music or audio recording usage within business premises, whether played through speakers, live performances, or digital media.

Celebrity Clash: Ahmad Dhani’s Bombshell

Public discontent reached a tipping point on 6 August 2025 when Ahmad Dhani, iconic frontman of Dewa 19, detonated a cultural bombshell. Declaring that cafés and restaurants could freely play Dewa 19’s entire catalog without paying royalties, Dhani invited businesses to simply DM him for approval. No fees, no bureaucracy.

The move, widely celebrated by small business owners and fans, instantly undermined the royalty regime and exposed deep rifts within Indonesia’s music industry.

While Dhani was lauded for his populist gesture, other musicians have held the line. Febrian Nindyo of HIVI! called royalties “justice for creators,” stressing that remuneration for public performances is essential to sustaining Indonesia’s creative economy—especially post-pandemic.

Government in the Crossfire: Can They Broker a Deal?

With the controversy spiraling, senior government officials have stepped into the fray. Secretary of State Prasetyo Hadi and Creative Economy Minister Teuku Riefky Harsya have pledged to “find a balanced, fair solution,” recognizing the urgency of protecting creative rights without crushing small businesses.

Roundtable negotiations have been promised, aiming to bring together copyright collectives, musicians, business owners, and regulators. Yet confusion and anxiety persist. Critics argue that poor communication from the government has led to patchy enforcement and rising panic among entrepreneurs.

In Jakarta, Bandung, and Yogyakarta, many eateries now avoid music altogether or stick to ambiguous “safe” genres like Western lounge jazz or obscure instrumentals. Some experiment with “nature sounds” only to discover these too are protected if commercially produced. The result is a musical minefield where even the most innocent ambient track can carry legal risk.

Justice or Overreach? The Global Implications

Indonesia’s debate holds weight far beyond its borders. Royalty collection systems exist worldwide—in Australia, the United States, and across Europe—but few enforce them as stringently or as publicly as Indonesia has done in recent weeks.

For Southeast Asian neighbours, Indonesia is now a test case: can a developing economy protect its creative class without stifling entrepreneurship? Proponents argue the fees are modest and vital to preserving national culture. Detractors counter that rigid enforcement without adequate education is alienating businesses and could drive music into legal grey zones—or silence altogether.

Streaming platforms have quietly inserted themselves into the debate. Both Spotify and YouTube explicitly prohibit commercial or public playback under standard licenses. The burden, by design, falls on the business—not the platform. In fine print, the platforms shift liability, leaving businesses exposed in an increasingly regulated environment.

A Cultural Turning Point: Regulation or Renaissance?

While tension brews, some industry watchers believe the crisis offers a chance for reform. By developing clear, scalable licensing schemes and exempting micro-businesses from burdensome fees, the system could foster a new era of collaboration between artists and venues.

Businesses, meanwhile, must reckon with a new reality: music is not free. It is a product of labor and talent, and when it enhances ambience, draws foot traffic, and encourages longer stays—it deserves compensation.

The public dialogue ignited by Ahmad Dhani’s move, combined with rising pressure on policymakers, marks the beginning of what some are calling Indonesia’s “royalty reckoning.” And in that reckoning lies a pivotal choice: build a cultural economy based on trust and innovation—or one ruled by fear, silence, and confusion.

A New Soundtrack for Southeast Asia?

For international visitors and regional entrepreneurs alike, the implications are clear. Whether you’re sipping espresso in Bali or dining in Medan, the music you hear—or don’t hear—now carries legal weight.
Indonesia is fast becoming the test case for how copyright law, creative industries, and business interests collide in a digital world. If the country manages to strike the right balance, it could usher in a cultural ecosystem where creators are respected and cafés become partners in a sustainable music economy.

If it fails, the hospitality sector risks a quieter, more anxious future—haunted by legal ambiguity and artistic silence. In a region rich with creativity, Southeast Asia is listening closely.

Sources:
[1] Cara Menghitung Royalti Musik dan Lagu di Kafe
[2] Biaya Royalti Musik untuk Kafe dan Restoran, Ini Rincian Simulasi Perhitungannya
[3] Polemik Royalti Musik, Ini Aturan Resmi Tarif Royalti Musik untuk Restoran Kafe Bar
[4] Ahmad Dhani Gratiskan Lagu Dewa 19 untuk Kafe dan Restoran, Tanpa Biaya Royalti
[5] Polemik Royalti, Ahmad Dhani Gratiskan Lagunya Diputar di Kafe
[6] Dukung Pelaku Usaha, Ahmad Dhani Tak Tarik Royalti Lagu Dewa 19
[7] Pro Kontra Royalti Pencipta Lagu, Pemerintah Akan Turun Tangan
[8] Menteri Ekraf Bicara Polemik Royalti, Singgung Revisi UU Hak Cipta di DPR
[9] Pemerintah Cari Solusi Adil Terkait Polemik Royalti Musik di Kafe dan Restoran

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