Friday, October 06, 2006

Karaoke Royalties in China: Unequal Songs Compensated Equally

In December 2005 IP Dragon blogged about a trial by the governement of Guangzhou to charge Karaoke parlors. According to the Pacific Epoch the Guangzhou governement was leaning towards a one Yuan fee for each time a song is played. Read more here.

Managing IP gives an update on Karaoke royalties in China. Howard Tsang and Cyril Yeung of Wilkinson & Grist wrote that the National Copyright Administration of China (NCAC) has proposed a tariff of 12 Yuan per room per day.

It seems that the original Guangzhou governement's fee proposal deviates from that of the NCAC. Everybody who ever went crooning in a Karaoke room, knows that 12 songs per room per day is a very low number of songs played. But more important, the relation between the frequency of songs played and the royalties is broken, if Karaoke parlors have to pay a fixed fee per room per day. This way unequal songs are compensated equally. Musicians of popular songs should receive more royalties, to compensate for their quality, which will be an incentive for other musicians to make good Karaokeable music.
Technically it is possible to determine which songs are played how many times in which Karaoke parlor, in Guangzhou a Chinese proprietary system for this was used.

Who is going to collect and distribute the royalties?
"The NCAC has generally approved the centralized collection of royalties by the Music Copyright Society of China and the China Audio & Video Collective Administration Association (in preparation)."

The NCAC has lauched a public consultation, which ended September 20, 2006. Whether it will change the fee structure or hight remains unclear.
Read the Managing IP update here.

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