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Battle Lines Drawn in KTV Royalty Fight
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The standoff over royalty fees between karaoke bar operators in Guangzhou and the China Audio and Video Association is heating up, with the royalty-collecting body threatening to delete music at bars that refuse to pay.

The association issued a bulletin in some local newspapers on Monday saying that its Guangzhou liaison office would start strictly collecting royalty fees. It also said karaoke bar owners would have to pay fees dating back to January 1.

The authorities imposed a daily fee of 12 yuan ($1.5) for every karaoke room at a bar at the beginning of the year. Bar owners oppose the fee because they say it would be more reasonable to pay royalties according to the number of songs played.

A staff member at the China Audio and Video Association's Guangzhou liaison office who refused to be identified told China Daily that the office would hold a conference this week or early next month to brief local karaoke bar owners. It will also explain fee procedures and send officials to each bar to check the number of karaoke rooms before it works out the total fees each karaoke bar should pay.

He said his office would offer a rate of 11.5 yuan ($1.47) per room daily to operators who agreed to pay before May 20. The standard 12 yuan fee will resume after May 20.

"We will delete the related pieces of music if any bar owners refuse to pay," he said.

However, the owners of several karaoke bars said they would continue their resistance to the fees.

Huang Shiqiu, president of the Guangzhou Cultural and Entertainment Industry Association, which represents the leading karaoke operators in Guangzhou, said his association would negotiate with the Guangzhou liaison office of the China Audio and Video Association.

"But we will insist on a reasonable system for paying royalty fees and will not accept the standard of 12 yuan per room per day, or a mere discount of 50 fen (6 cents)," Huang said.

According to the standard of 12 yuan per room per day, karaoke operators in Guangzhou will have to hand over a combined 1.2 billion yuan ($147 million) every year.

"We will resort to litigation if disputes really crop up," he added.

Song Qingxiang, an executive at Guangzhou Golden Times KTV, was equally defiant.

"The Guangzhou Cultural and Entertainment Industry Association has made it very clear that the daily fee of 12-yuan ($1.5) for every karaoke room is unreasonable and that the collecting agent is not legally authorized to do so," Song said. "Naturally, they can't expect us to be cooperative on the issue."

The nationwide dispute over royalty fees has been dragged on for about six months already. Guangzhou has become one of the front-line battles because bar owners there have directly challenged what they say are irrationally high fees and the ambiguous legal status of the national collection agents.

The China Audio and Video Association has successfully collected royalty fees in Yunnan and Hunan provinces, Chongqing Municipality and Xinjiang Uygur Autonomous Region.

(China Daily March 28, 2007)

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