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Karaoke Bars Not in Tune with New Fees
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The thousands of karaoke bar owners throughout Shanghai have requested that national lawmakers reconsider new copyright charges announced last week which are scheduled to come into effect late September.


Owners say the fees are excessive and the organizations responsible for collecting the money would retain an unacceptably high amount to cover their administrative costs. Yesterday they asked the Legislative Affairs Office of the State Council to meet with business owners, consumers and industry regulators to come up with fairer regulations.  


The new rules were published online last week by the National Copyright Administration. They’re seeking opinions on the new charges before they’re implemented on September 20.


Under the rules, bar owners would pay 12 yuan (US$1.50) per room a day to cover royalty fees for music videos. Bar owners in Shanghai and Beijing said a room-based fee should only be one yuan a day. In fact they’d prefer a system where fees were based on the number of times a video was actually shown.


Currently owners pay a fee based on the total area of their karaoke bars but the formula for deciding this is unclear and it’s claimed open to abuse.  


"Shanghai had 27,000 operating karaoke rooms across town which, without any doubt, is a world record,” said Zhu Nan, an official with the city’s Karaoke Industry Committee. “A rule that's going to affect such a large business should be fair and decided carefully."


The committee met with representatives of more than 30 karaoke bars to discuss the regulation yesterday. They contend it's unfair to charge copyright fees based on the number of rooms in a bar since 20 to 50 percent of them can sit unused on any given day.


The rule would cost bar owners in the city 87 million yuan (US$10.5 million) a year, said the committee. It also questioned reports that the two organizations collecting the fees would hold onto 20 percent of the royalties to cover their administrative costs.


"That means Shanghai karaoke operators would pay nearly 17 million yuan (US$2 million) a year towards administration," Zhu said.


The Ministry of Culture recently started a trial program involving a database of music which would be connected to karaoke operations, so charges could be made based on how often a song or video was played.


"We think with the database it's possible to calculate what royalty fees should be paid and it would be fairer," Zhu said.


(Shanghai Daily August 29, 2006)

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