The copyright watchdog has brushed aside threats by some KTV bar owners to boycott a national royalty plan, saying it would not give in.
"To back off will be a step back for the KTV industry," Wang Ziqiang, spokesman for the National Copyright Association (NCA), told Beijing Evening Post.
According to a plan unveiled by the NCA earlier this month to solicit public opinion, KTV bars will have to pay 12 yuan (US$1.5) in royalties per room each day starting from the end of the year.
The watchdog said copyright owners had designated the China Audio and Video Collective Administration (AVCA) to levy the fees on their behalf.
Meanwhile, the AVCA whose formation is yet to be officially approved has transferred the fee-collection job to the China Audio and Video Association (CAVA).
KTV club operators question the legitimacy of the AVCA as a fee collector but Wang said collective management through a designated association is the best way to solve any royalty disputes.
Wang Huapeng, head of the organization committee for the AVCA, said the majority of popular music, audio and video firms had entrusted the task of levying fees to his association.
"A full list of their names will be published soon," said Wang Huapeng.
Some KTV operators in Shanghai and Guangzhou argue that it is unfair to charge fees based on the number of rooms because not all are used every day. They believe that fees based on music usage is far more reasonable.
Wang Huapeng explained the quantum of fee was decided after looking into profits of KTV bars and negotiations with some operators.
"We estimate that 12 yuan amounts to 1-2 per cent of a KTV room's profit each day. The ratio is lower compared to Japan and the Republic of Korea, where the fee is 3-5 percent of their profit," he said.
Adding to the discordant notes are some legal experts, who say the fee structure neglects many copyright situations.
For instance, the copyright protection period might have expired for some music; and some folk songs don't have a specific copyright holder, said Zhang Zihui, associate professor at the School of Journalism of Renmin University.
Also, copyright fees are already included in the price of some audio-video products and it is unfair to levy the fee once again.
KTV fans seem uneasy.
"I agree that royalties are necessary. But what I fear is that KTV operators might pass on the costs to consumers," said Liu Zhen.
Most KTV operators say they haven't decided whether to raise prices after the fees are collected. KTV bars generally have rooms ranging from several to more than 100.
The fee would first be collected in Beijing, Shanghai and Guangzhou on a trial basis, and gradually expanded to other cities, with the rate varying according to local conditions.
(China Daily November 24, 2006)