MCSC Faces up to the Media Storm

By Kevin Nie, China IP,[Patent]

The Music Copyright Society of China (MCSC), established in 1992, was the first collective copyright management organization in China. In the past 17 years it has never stopped protecting the rights of the copyright owners, but not without questions.

This year, once again, the public attention has been attracted to the MCSC on account of the charges for karaoke music and background music. Among other things, the quarreling between the organization and the media has given the debate a fresh feel. The 17-year old organization has accumulated a large amount of practical experience useful for other collective copyright management organizations. It now teaches them how to face up to the media.

Frequent questions over the “fuzzy charges”

The MCSC has been questioned and criticized for years over its collection of the copyright royalty charges. But, the war between it and the media did not break out until 2007.

With respect to the collection of the karaoke music royalty charges, as early as April and May, 2007, the Beijing Evening News published two articles entitled– Four Messy Accounts of Karaoke Royalty Charges and Relatively Reasonable Fuzzy Charges –  with the authors’ names presented, suggesting that the collector, the MCSC, charged for songs that nobody had sung. The articles also suspected the MCSC was guilty of repetitive charging and did not clearly account for the destination of the money collected.

In addition, on December 3, 2008, the Beijing Evening News published a commentary entitled, “MCSC Disturbs Businesses.” The commentary was about a prior event where more than 200 hotels and restaurants in Kunming, Yunnan Province, decided to stop playing the background music to protest against charges levied by the MCSC Yunnan Office, which they considered to be unreasonable. It questioned the charging system on a per bed or box basis for KTVs. It said that the charges involved tens of thousands of musicians around the world. “Since the fees are collected in such a disorderly state, will they be paid out in a similar disorganized state?” It also ridiculed the organization by stating, “The MCSC is trying to make it bigger and stronger. Its standard charges, if applied, would collect millions or billions of dollars in China and around the world. Any noncompliance would lead to such a disturbance to society that no business or company could operate in peace. It sets up branch offices, collects money and sues anyone who would not pay. Could any company afford the time to fight on the MCSC in court everyday? The MCSC has the time and the money, and the money does not come out of its own pocket. It receives the management fee if it wins the suit and pays the management fee if it loses. However, either way it still earns its salary. If there were ten such organizations, they would cause fifty percent of the Chinese companies to stop operating, not to mention the financial crisis.” The commentary was copied and posted by all of the website portals. It attracted a huge amount of social attention.

The Hotel Song Charge: A Wrong Decision at A Wrong Time was published by the China Internet Information Center. It pointed out that the MCSC’s collection of music royalty charges was timed inappropriately. It stated that the organization had “disregarded the market law,” under the macro environment of the global financial crisis and had brought an economic downturn and the entire hotel industry was suffering losses. It also said that the MCSC lacked the authority to set the standard charges being imposed. “One cannot help but cast doubts on where this power and confidence in the MCSC come from.”

A tug of war with the media

Following a report entitled “The MCSC To Collect Royalties To Funeral Music” (which was later proved untruthful), on December 9, 2008, the Beijing Evening News published another commentary on the same report entitled, “The MCSC Dares Charge the Dead,” and co-launched another attack on to the organization.

It caused an intense response and the MCSC fought back immediately with a concerted counterattack. On the following day (December 10), it responded publicly and published on its response on the official website The Society’s Voice. The response contained four excerpts from the work report it submitted to the National Copyright Administration. “We strongly oppose the accusations made by the commentator for the Beijing Evening News because they totally violate the legal spirit; they twist right and wrong and transmit to the public the idea that infringements are justified and protections are not.” The article helped outsiders learn more about the ins and outs of the MCSC by explaining that, “because of its role as an intermediary between the owner and the user, it is often blamed by the both.” The “organ” aspect of the organization was also explained, as it said “we have a duty to timely report any trouble to the superior.”

On the same day, the MCSC Standing Director, Qu Jingming personally published a response on the websites of the MCSC and the CAVCA (China Audio-Video Copyright Association) entitled “Beijing Evening News: What are You Doing?” It directly responded to the previous two commentaries of the Beijing Evening News. Regrettably, it did not answer the numerous questions posed by outsiders, but instead was viewed from an “eye for eye” perspective. It was perceived as a basic catharsis and a recrimination against the journalist. He said that he would copy the article to 13 departments and offices, including “the Propagation Department of the CPC Central Committee, the Information Office of the State Council, the General Administration of Press and Publication, the National Copyright Administration, Beijing Municipal Bureau of Press and Publication, Beijing Municipal Bureau of Copyright, All China Journalists’ Association, the IP tribunals of courts at various levels, the Legal Work Commission of the NPC Standing Committee, the Legislative Affairs Office of the State Council, Xinhua News Agency and China Daily.”

The response caused a huge disturbance in the industry. Media throughout the nation was aroused and the MCSC was once again pushed into the eye of the storm.

Music Royalty Charge Collection Is a Flax Bundle Never Short of Tangles, which was published in the Xinhua Daily Telegraph, raised a new question by asking, “isn’t it too far-fetched to attempt to solve such a long-term problem with this power and speed?”

If fair play is lacking, disorder is unavoidable, according an analysis presented by the Southern Metropolis News. Since no guild exists, the KTV owners are not organized properly and their interests lack powerful representation. In the name of the CAVCA, the copyright owners and their interests are represented. But the CAVCA is an association brought forth by an administrative permit. With the salient monopoly background, it can stand back from the negotiation table and traditional notions of fair play, so that the interests of both copyright owners and users are damaged.

A commentary on the China Internet Information Center said that the MCSC should look inward and reflect upon itself on whether the intention or content of these reports contained something valuable and could help them gain perspective on why the public did not understand and support the MCSC in its work. As a matter of fact, since the MCSC began to collect the music copyright royalty charges, the public has known little about the nature of the organization and its charges. This has resulted in a misunderstanding. On the other hand, the MCSC has failed to take advantage of the media and timely settle this misunderstanding or the complaints raised by the public about these charges. Instead, it appears arrogant and gives orders. It either threatens to sue the KTV owners that will not pay, or frightens them using the administrative power of the National Copyright Administration or other governmental agencies. It goes further by refusing to bargain with some of the KTV owners.

On December 11, an article entitled Wu Xiangfei Calls for Joining MCSC Protection, was published on the SINA, showing its support for the MCSC.

On December 12, A Probing into “Fuzzy Charges” - Answering the Questions of MCSC Standing Director Qu Jingming was published on the Beijing Evening News. Only one day later, Beijing Evening News: Let Me Tell You Quietly was published, in which Qu Jingming was more rational and explained the charges.

After a relatively “quiet” period, on May 20, 2009, Beijing Evening News launched a piece called The “Mafia Way” of MCSC and CAVAC, which seemed to heat up the conflict again. However, it was met with a low-profile reply from Qu Jing Ming the following day. In Beijing Evening News out of My Wits, he said in the end, “If it were the rogue Niu’er (A figure from the Lords of the Marsh) whom I would never want to meet with, I would have the fear as if I have met with the Mafia.”

Now, seemingly, the debate between the MCSC and the media has come to an end. However, what will come in the following year? A storm again?

 (Translated by Ren Qingtao)


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