Two Chinese government bodies have come up with separate plans
to charge karaoke bars royalty fees, causing a turf war.
On July 18 the Ministry of Culture said it would create a
unified karaoke royalty fee system and charge karaoke bar operators
for each song downloaded. Then on July 20 the National Copyright
Administration (NCA) announced its own karaoke copyright fee
system.
The moves are both said to be aimed at protecting copyright
holders' rights.
Insiders say the separate proposals, with their different fee
mechanisms, reflect a tussle between the two departments.
Collecting copyright fees is a potentially lucrative business.
The NCA insists that bar operators should pay on the basis of
business volume, while the Ministry wants operators to pay
according to the number of times a song is ordered, said Wang
Huapeng, spokesman for the China Audio-Video Management Collective,
one of the two payees approved by the NCA. The other approved payee
is the Music Copyright Society, a body that acts on behalf of music
composers and writers.
Karaoke bar operators will be able to voluntarily join the
Ministry's unified fee system, which will be trialled in the cities
of Wuhan, Zhengzhou and Qingdao this year. In the NCA scheme, those
who refuse to pay will be deemed illegal.
An NCA official who declined to be named said the two
departments had not conferred with each other about the fees, while
Ministry official Yang Guangli said the two departments are likely
to cooperate.
As yet no moves seem to have been made to unify the fee
system.
Earlier this month, NCA spokesman Wang Ziqiang told a press
conference that the Ministry of Culture is not entitled to charging
karaoke operators because copyright supervision and fee collection
is the responsibility of the NCA.
The 10 billion yuan (US$1.25 billion) revenues racked up by
China's 100,000 karaoke bars each year should generate 8 million
yuan (US$1 billion) of royalties for copyright holders. The two
government bodies are competing for the right to collect these
sums.
The attorneys of music companies, including EMI Group PLC and
Sony BMG, said the Ministry of Culture had not informed them of the
royalty scheme and it did not have their authorization, the
China Newsweek reported.
"It's a good thing for us," Song Ke, manager of the Taihe Rye
Music Co Ltd, a leading Chinese audio-video copyright holder, was
quoted as saying, adding the company had no copyright agents when
two government agencies declared they would collect royalties.
As copyright agent for more than 4,000 Chinese composers and
writers, the MCS was still considering its position, MCS head
attorney Liu Ping said.
However, he welcomed the news that royalties would be collected
for the entire music industry.
Karaoke has triggered disputes between copyright holders and bar
operators over copyright infringement since it caught on in China
in the mid-1980s.
Fifteen domestic and foreign recording companies, including
Warner Music, Global Music and Sony BMG, launched a campaign in
2003 to charge the royalties from Chinese karaoke operators, who
had lost a succession of lawsuits and been fined thousands of
yuan.
(Xinhua News Agency August 5, 2006)