On November 9, the NCA set a daily royalty of 12 yuan (US$1.5) per KTV room in an effort to improve copyright protection. The fee is in effect in Beijing, Shanghai and Guangzhou on a trial basis and is to be gradually implemented in other cities.

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However, KTV operators in Guangzhou and Shanghai say the fees are too onerous. One sticking point is that operators must pay the room-based fee regardless of whether any customers actually use the rooms.

Zhu Nan, deputy secretary general of the Shanghai Entertainment Industry Association, said a room-based rate of 1 yuan (US$0.12) per day would be more feasible.

"KTV clubs in Shanghai would end up turning over 7.3 million yuan (US$900,000) every year if they had to pay a rate of 1 yuan (12 US cents) per day. That's already an awesome amount of money," said Zhu.

Huang Shiqiu, president of the Guangzhou Cultural and Recreational Industry Association, said the fees should be levied according to the number of songs played.

In response to such opposition, Wang Huapeng, leader of the China Audio and Video Collective Management Association's organizational committee, was quoted by Beijing Youth Daily as saying KTV operators can resist the fees if they do not use protected material under the association's care.

The China Audio and Video Collective Management Association will oversee collection of the fees once it receives official approval from the government. In the meantime, the China Audio and Video Association has been designated as the temporary agent to collect the royalties.

Meanwhile, Beijing's copyright authorities said they have been collecting the fees according to plan.

"We worked with copyright holders and users to create a scheme for different royalty standards for different types of KTV operations," said Wang Yelin, vice-dean of the Beijing Copyright Association.

Wang said that in Beijing, 12 yuan (US$1.5) would be the maximum of three levels of royalties. Rules governing the three standards will be released at the end of the year.

Some operators calculated that KTV customers would probably have to pay an extra 1.4 yuan (US$0.17) per hour to cover the fees.

The royalties will be paid to song-writers and music companies, according to staff at the China Audio and Video Collective Management Association. Many copyright holders say that 12 yuan (US$1.5) per day is still too low.

(China Daily 11/23/2006 page3)

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