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KTV Owners Boycott Royalty Payments
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Karaoke (KTV) bar owners in China have seemingly boycotted a new national royalty payment scheme, branding it "illegal and unreasonable."

China's National Copyright Administration (NCA) 9 unveiled a scheme on November by which karaoke bars have to pay 12 yuan (US$1.5) a day in royalties to music artists for each room on their premises.

The NCA said copyright owners had designated an association for the collective management of audio and video copyrights to collect royalties on their behalf.

However, as this plan awaits official approval by the government, the China Audio and Video Association (CAVA) has been designated as an interim agent to collect royalties.

In China's southern city of Guangzhou, the Guangzhou Cultural and Entertainment Industry Association said the agent has no government approval and that paying royalties according to the number of KTV rooms is unreasonable. 

"As the association has no approval, it has no right to collect royalties, and a non-existent 'right' can not be transferred to the CAVA," said Huang Shiqiu, chairman of the Guangzhou-based association. KTV owners could be paying for songs that haven't been used under this standard.

A copyright fee based on individual song popularity is believed to be more reasonable. Huang said the boycott was organized after lengthy discussion among bar owners. He added that 12 yuan per room is too high for KTV owners.

Wang Huapeng, a leading official in charge of instituting the copyright management association, said he knew of protests from Guangzhou.

Wang said 12 yuan per room was the ceiling, and the association was working on a detailed variance scheme according to local economic conditions.

He declined to comment on his association's qualifications to collect the fees, saying, "The bars can stop using our copyrighted songs if they refuse to accept the scheme."

A staff member with the NCA said KTV owners and the national association should collaborate on a detailed scheme.

"Different opinions, reflecting the growing number of people concerned about royalty collection, are good for copyright protection," he said.

Zhu Nan, vice-chairman with the Shanghai Cultural and Entertainment Industry Association also questioned the copyright management's qualifications to collect the money.

"We won't pay any fees until the legal problems are solved," Zhu said.

However, he said Shanghai's KTV owners would accept the charging method, if the price was reasonable, for example, "one yuan per room per day."

Huang and Zhu both said the entertainment associations would, on behalf of the KTV owners, take legal action against the copyright management association or CAVA if they insisted on collecting the royalties.

In Beijing, another pilot city, bar owners did not share their brethren's anxieties.

Wang Yefei, vice-director of Beijing Municipal Copyright Administration said on Wednesday that a detailed scheme in Beijing was still on the drawing board.

However, Wang said, the prices were definitely lower than the upper limit of 12 yuan, and were sub-divided into three different levels according to operating conditions.

"We will listen to the KTV owners when working on the detailed scheme," Wang said, adding proposals would be issued early next year.

"It's strange for the KTV owners in Guangzhou and Shanghai to act in that way as they can still negotiate with the copyright management association about the detailed scheme," he added.

The royalties will first be collected in Beijing, Shanghai and Guangzhou on a trial basis. The practice will gradually extend to other cities, with the payment rate varying according to economic conditions.

A special team will be established before the end of the year to ensure fee collection.

(Xinhua News Agency November 23, 2006)

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