Two Chinese government bodies have come up with separate plans to charge karaoke bars royalty fees, causing a turf war.

On July 18 the Ministry of Culture said it would create a unified karaoke royalty fee system and charge karaoke bar operators for each song downloaded. Then on July 20 the National Copyright Administration (NCA) announced its own karaoke copyright fee system.

The moves are both said to be aimed at protecting copyright holders' rights.

Insiders say the separate proposals, with their different fee mechanisms, reflect a tussle between the two departments. Collecting copyright fees is a potentially lucrative business.

The NCA insists bar operators should pay on the basis of business volume, while the Ministry wants operators to pay according to the number of times a song is ordered, said Wang Huapeng, spokesman for the the China Audio-Video Management Collective (CACMC), one of the two payees approved by the NCA. The other approved payee is the Music Copyright Society (MCS), a body that acts on behalf of music composers and writers.

According to Wang, the fees collected by the CACMC will go to music distribution companies, copyright holders and the CACMC.

Karaoke bar operators will be able to voluntarily join the Ministry's unified fee system, which will be run on trial by the Zhangwenfa Cultural Investment Management Co., Ltd, affiliated with the ministry, in the cities of Wuhan, Zhengzhou and Qingdao this year. In the NCA scheme, those who refuse to pay will be deemed illegal.

An NCA official who declined to be named said the two departments had not conferred with each other about the fees, while Ministry official Yang Guangli said the two departments were likely to cooperate.

As yet no moves seem to have been made to unify the fee system.

Earlier this month, NCA spokesman Wang Ziqiang told a press conference that the Ministry of Culture was not entitled to charge karaoke operators because copyright supervision and fee collection was the responsibility of the NCA.

"We just want to take measures to protect the rights of each side instead of making money. We'll hear the pricing at a conference attended by the Ministry of Culture, the National Copyright Administration, copyright holders and karaoke bar operators," Liang Gang, an official with the Ministry of Culture and board chairman of the Zhangwenfa, was quoted by the China Newsweek magazine as saying.

The ministry has established a platform for the trade between the copyright holders and bar operators, but it has the authority for collective pricing and supervision of song content, he added.

The 10 billion yuan (1.25 billion U.S. dollars) in revenues racked up by China's 100,000 karaoke bars each year should generate eight million yuan (one million U.S. dollars) in royalties for copyright holders. The two government bodies are competing for the right to collect these sums.

The attorneys of music companies, including EMI Group PLC and Sony BMG, said the Ministry of Culture had not informed them of the royalty scheme and it did not have their authorization, the China Newsweek reported.

"It's a good thing for us," Song Ke, manager of the Taihe Rye Music Co., Ltd, a leading Chinese audio-video copyright holder, was quoted as saying, adding the company had no copyright agents when two government agencies declared they would collect royalties.

As copyright agent for more than 4,000 Chinese composers and writers, the MCS was still considering its position, MCS head attorney Liu Ping said.

However, he welcomed the news that royalties would be collected for the entire music industry.

Karaoke has triggered disputes between copyright holders and bar operators over copyright infringement since it caught on in China in the mid-1980s.

Fifteen domestic and foreign recording companies, including Warner Music, Global Music and Sony BMG, launched a campaign in 2003 to charge the royalties from Chinese karaoke operators, who had lost a succession of lawsuits and been fined thousands of yuan.

Source: Xinhua