Digital streaming services also bound by the copyright.

Giving assurance to the online streaming services, the Department of Industrial Policy and Promotion (DIPP) has clarified in a decision that all forms of broadcasting -including digital music streaming -fall under section 31(D) of the Copyright Act of 2013.

Section 31(D) of the Act offers statutory licensing (SL) to broadcasting services, allowing them the right to offer music to their listeners or customers at rates determined by the Copyright Board. This provision was brought into the Act to protect broadcasters from abusive practices of some music companies, who demanded unreasonable and unjustifiable royalties before granting permissions. Though the wording of the clause was quite clear in the Act, music companies had tried to create an impression that the section didn't apply to digital music services. With this clarification, DIPP has clarified that section applies to all broadcasters including digital music services.

Government's clarification on the issue of intellectual property right will bring major relief to services such as Gaana and Saavn, and will encourage them to renew commitment to their struggling businesses. Dhingana, another service, which was acquired by global giant Pandora, was shut down after being unable to fund music royalties.

In digital streaming, most music services are losing money. Their royalty payments have grown by over 500% in the last 4 years, with built-in minimum guarantees to the labels. Digital broadcasters' revenues, however, have grown modestly as the business is taking the time to develop. Labels also made restrictions on how their music was used, initially offering the web but not mobile rights, limiting how consumers could consume content, and restricting what partnerships digital music services could use.