China is moving to lower the business threshold of running audio
and video chain stores, a measure is designed to counter pirated
products and illegal downloading.
People who set up audio and video chain businesses in China can
expect an easier introduction as the minimum registration fee will
be reduced from five million yuan (US$625,000) to one million yuan
(US$125,000), according to the new rules.
For a large-scale company that has branches across the country
the minimum registration fee will be five million yuan, down from
30 million yuan ((US$3.75).
A spokesman of the Ministry of Culture said the market for
audio-video chain stores is "shrinking" because their high
operational costs make it hard for them to compete with street
venders hawking pirated discs and a plethora of websites offering
free downloads.
The number of DVD and CD stores plummeted from 2,000 to 700 in
the southern city of Guangzhou, which is believed to be one of
worst hit cities in China by piracy.
Chain stores of audio-video products first developed in major
cities such as Beijing, Shanghai, Chengdu, and Shenzhen. But in
most of the Chinese cities, buying discs from chain stores is just
not popular, the spokesman said.
Legitimate audio-video shops are increasingly hard to find in
downtown Shanghai, he added.
The regulations, released by the Ministry of Culture, will take
effect on Dec. 1, 2006.
Procedures for the application of setting up audio and video
business are also expected to be simplified.
It will replace a previous regulation on wholesale, retail and
lease of audio and video products, enacted in March, 2002.
In another move to slash operational costs, the new regulation
also scrapped the rules on the size of chain stores, which means
that licenses will now be issued to chain stores that are barely
larger than a counter.
Cultural officials said the new regulations were designed "to
convenience the sale of legal audio-video products and set up
barriers for the pirated ones."
China has launched a string of campaigns to ban pirated CDs and
DVDs that are sold on the streets for as low as 4 yuan ((US$0.5)
each.
In September, police said they had destroyed nearly 13 million
pirated CDs, DVDs and computer software during a 100-day intensive
crackdown on piracy.
About 8,907 shops and street vendors were closed down in two
months, according to police records.
According to the new regulations, shops that are found selling
more than 100 counterfeit discs will face severe punishment and
possibly have their license suspended.
Pirated discs and profits generated from their sale will be
confiscated, the regulations dictate, and shop owners may be given
more lenient punishments if they reveal the source of the pirated
discs.
Intellectual property rights protection has been an issue for
China in its trade relations with the United States.
On Tuesday, visiting US Secretary of Commerce Carlos Gutierrez
described IPR protection as a "huge problem" for China, but the
country is "showing an increasing ability" to deal with the
issue.
(Xinhua News Agency November 16, 2006)