China Television Station Shall Pay Royalty for Music Works Playing Now

According to the news from the website of Music Copyright Society of China (MCSC) (note: the news is in Chinese), the society began to charge the royalty from the radios and televisions nationwide. That means the royalty collection has been carried out in the country after CCTV agreed to pay MCSC the fee in 2010. (the image today is the logo of the MCSC)

Today, Bridge IP Law Commentary will introduce you the background legal knowledge and the inadequacy of the charge of this time.

I. The narrow definition of the copyright owner in the agreement

Currently, it’s been reported by medias that the fee payable by televisions is to the music copyright owner, while that was questioned by netizens on Weibo, the twitter like website in China, shortly after its publication that the fee is only paid to music and lyrics writers with the record company excluded.

As stated by “与狼共舞6272” on Weibo, the copyright of music works normally belongs to the record company, who invest most in the process of the sale, propaganda and spread of the music works, though the music and lyrics writer may enjoy the copyright over their rhythms and words which are necessary parts to the music works. Therefore to exclude the record company among the fee collecting object seems to be unfair.

Meanwhile, not only the record company, but also the performers are not counted in for the benefit party is the lyrics and music writer only.

To our opinion, that mainly due to the MCSC itself, who is in charge of the collective administration of the music and lyrics copyright, and for this reason the fee collectable under the signed agreement could only be the royalty of the music and lyrics. And the other organization representing the interests of the audio, video and MTV recorders—China Audio-Video Copyright Association (CAVCA) did not participate in the fee charging of this time. MCSC was founded in 1992, and CAVCA was established in 2008, who are respectively the only association representing the interests of relevant groups. We think the charge of this time is just the piloting and there’s the possibility of the fee collection jointly by the two associations, for who have already cooperated in the royalty fee collection from KTVs.

II. The low royalty standard

At present, there are mainly two calculation methods of the royalty payable by the television in the music works broadcasting, which are regulated in the Interim Measures concerning the Remuneration Paid for the Recording Broadcasting by Radios and Televisions (the Interim Measures)

1. To calculate by the balance of the ads income reduced 15% cost of the channels and frequencies multiplying the legal standard which varies from 0.01% to 0.9 basing on the playing time.

2. To calculate by the annual play time of the recording multiplying the legal standard, which is 1.5 yuan per minute within the first 4 years and 2 yuan per minute from the 5^th year.

Objectively, the above mentioned fee standard is not high, and even be a little bit low, but as a regulation promulgated by the State Council, the document shall necessarily balance the interests among the departments. The Television Copyright Board of CRTA is the industry association approved by the State Administration of Radio, Film and Television with its members are the local state-run television stations, and on the other hand both MCSC and CAVCA are the non-profit organizations established under the proposal of the National Copyright Administration of China, which is also known as the General Administration of Press and Publication. And for this reason, the low fee standard is not difficult to foresee for the interests balance among the departments.

Despite the room for improvement, just like Mr. Zhang Yadong’s comment, who is the representative of the music industry and musician himself, that the royalty payment by the television stations are essential to the writer of music works, and it means a great improvement on the public sense towards the copyright protection. And the spring of the music writer could only come when the respect toward writers and their copyright has been an accepted social value.

Author: Mr. Albert Chen
Attorney-at-law of DeBund Law Offices
Co-author: Mr. You Yunting
Founder & Editor-in-Chief of Bridge IP Law Commentary
Partner & Attorney-at-law of Shanghai DeBund Law Offices
Email: Bridge@chinaiplawyer.com, Tel: 8621-5213-4900,
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