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Recording industry tunes up for compensation
By Xin Dingding (China Daily)
Updated: 2004-10-10 23:54 Following a move to collect copyright royalties
for background music in 2002, the recording industry is taking another big step:
Safeguarding copyright of videos at karaoke venues.
Karaoke venues in China pay royalties to the Music Copyright Society of
China, the copyright management collective for musicians.
However, the recording industry raised another issue this year that music
videos used in karaoke venues should also be subject to copyright dues.
At least 49 recording companies sent legal notices to about 12,000 karaoke
venues across the country in March this year. The notices demanded karaoke
venues stop using copyrighted music videos and pay damages.
Some karaoke venues compromised, but most didn't. A few cases made it into
court.
On the one hand, many karaoke venue believed they have already paid, because
the Music Copyright Society collects money from them annually to pay copyright
holders.
On the other hand, the notices didn't provide an accurate standard of how the
compensation should be calculated.
According to Qian Jian, the legal adviser to a karaoke venue in Beijing, the
notice said compensation would be calculated based on the size of the karaoke
venue and the number of rooms available.
Many karaoke venues worried that they might be overcharged.
According to earlier judgments on a few similar lawsuits, the accused karaoke
venues were asked to pay compensation of 100,000 yuan (US$12,000) for each music
video.
If the compensation is calculated this way, karaoke venues fear they would
suffer huge losses. Karaoke venues usually would have thousands of songs in
stock and many of the music videos played are transformed directly from video
recordings.
More importantly, the recording industry has not indicated what they will do
about the royalties of music videos in the future.
If karaoke venues compromise now, they may have to pay much more.
"Karaoke venues will also pay business taxes, about 23 to 25 per cent of the
revenue. If each recording company asks for 10,000 yuan for each music video,
karaoke venues are left with only one way to go -- shutting down," Huang Shiqiu,
head of Guangzhou's entertainment business association, told the Nanfang Daily.
A few months later, 30 karaoke venues in Shanghai countersued the recording
industry and their lawyers, claiming damages to their reputation.
The lawsuit has been accepted by the Shanghai Second Intermediate People's
Court.
The plaintiff demanded 1.01 million yuan (US$122,000) in compensation, both
for the damage to the reputation of karaoke venues and for the decline in
business after the original notices were delivered in March.
So far, the lawsuit has not been tried.
According to Wang Ju, secretary-general of China Audio & Video
Association, lawsuits relating to the dispute have ended up with recording
companies as the winner in nearly all cities except for Shanghai.
With accurate names of the music videos given, the court tended to regard
these music videos as cinematographic works under the protection of Copyright
Law and thus rule in favour of recording companies, insiders said.
But according to a report by the China Youth Daily, an anonymous official
with the National Copyright Administration pointed out that there is still a
lack of legislative authority to collect copyright royalties for music videos
from the whole karaoke business in China.
The amended Copyright Law, effective in 2001, stipulated that music
broadcasted in public is subject to royalties or permission from copyright
holders. There was no mention of music videos.Insiders point out that China's
copyright protection stepped into a new stage that year.
Before the amendment of the Copyright Law, it was totally free to broadcast
background music in stores, restaurants and entertainment venues, on air planes,
trains, television and radio.
"Many stores didn't know it was a duty to pay for music they broadcast," Fang
Fang, a staff member at the Music Copyright Society, told the Xinhua News
Agency.
Starting from 2001, Beijing businesses have begun to pay for background music
they broadcast.
The capital's 63 hotels alone have paid at least 100,000 yuan (US$12,000) to
the society for the copyrighted music they used as background music in 2001.
At present, the society manages copyright of more than 60,000 songs and has
at least 1,700 members.
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